Summary of Huayang International's Conference Call Company Overview - **Company**: Huayang International - **Main Business**: Design and cost consulting services Key Points Financial Performance - **Revenue and Profit**: Overall revenue and profit showed a slight decline year-on-year, maintaining stability. The design and cost consulting main business revenue decreased by 10%, while overall profit dropped by 36% due to losses from new businesses. Excluding the impact of new business losses, profit declined by approximately 10-15% [2][3] - **Quarterly Impact**: The fourth quarter has a high business proportion, significantly affecting annual performance [2] Business Strategy and Transformation - **Cultural Business**: The cultural business incurred losses of 20-30 million yuan in 2025, leading to its transfer to the original management team. The company is actively seeking transformation opportunities in new productivity sectors, including participation in a semiconductor investment fund [4][5] - **Focus on Stability**: The company aims to maintain stable main business operations with slight growth, primarily relying on new business opportunities [4] Real Estate Industry Insights - **Market Conditions**: The real estate industry has been contracting since its peak in 2021 but is now stabilizing. Further downward space is limited, and a rebound is unpredictable. The focus has shifted from scale and growth to enhancing service capabilities to meet new market demands [6] - **Design Industry Challenges**: The design industry faces challenges due to mismatched client demands for high-quality, creative designs and traditional development models. The company plans to adjust its organizational structure and methods to improve service capabilities and design quality [7] Client Structure Changes - **Client Dynamics**: There has been a noticeable change in client structure, with a decrease in government project orders and an increase in projects from local developers and technology companies, which demand higher design quality and creativity [8][9] Project Types and Performance - **Residential and Commercial Projects**: In 2025, there was slight growth in residential projects, particularly in talent housing projects, despite no significant increase in government orders. Public building projects, however, saw a decline [9][10] - **Stability in Affordable Housing**: The development of affordable housing remains stable, with a consistent number of projects, while urban renewal contracts have seen a steady increase [10] Future Outlook - **2026 Projections**: The company aims to keep its main business stable, with potential for slight growth depending on industry changes. Future growth will rely on new business opportunities while maintaining existing scale [11] Technology and Innovation - **AI in Design**: The application of AI technology in architectural design is still in its early stages, with ongoing internal efforts to enhance efficiency. The company is not currently relying on third-party companies for profitability through AI [12] - **Exploration of New Business Areas**: The company is exploring new business directions, including semiconductor equipment and optical communications, and has participated in a significant semiconductor investment fund [13] Robotics and Low-altitude Aviation - **Robotics Integration**: There is limited focus on integrating robotics with construction, with more emphasis on AI development. Some applications in renovation and painting are noted but are not core to the business [14] - **Low-altitude Aviation**: No new projects in low-altitude aviation have been initiated in 2025, with previous projects showing no significant progress [15]