Core Viewpoint - The company, Haichuang Optoelectronics, has experienced a significant decline in performance for 2024, with revenue and net profit expected to drop by 20.75% and 46.56% respectively compared to the previous year [1][2]. Group 1: Financial Performance - Haichuang Optoelectronics reported revenues of 606 million, 833 million, and 661 million yuan for the years 2022, 2023, and 2024 respectively, with net profits of 74 million, 122 million, and 65 million yuan for the same years [1]. - The expected decline in 2024 is attributed to underperformance in the laser radar business and a decrease in industrial laser business revenue due to industry demand weakness and intense competition [2]. Group 2: Business Operations - The company's laser radar revenue is heavily reliant on two major clients, Tudatong and Luminar, which together contributed 78.40% of the revenue from this segment [2]. - Uncertainties in the cooperation with these key clients have emerged, including Tudatong's introduction of a second supplier and Luminar's unstable operations due to underperformance in vehicle deliveries [2][3]. Group 3: Market Position and Governance - The company faces inquiries regarding its market position, share, and ranking in its niche, as well as its role in the supply chain of downstream clients [3]. - The ownership structure of Haichuang Optoelectronics is relatively dispersed, with the controlling shareholder holding only 30.21% of the voting rights, raising concerns about governance stability post-IPO [3].

Financial Data and Key Metrics Changes - First-quarter revenue reached $978 million, a 22% increase year-over-year and an 8% increase from Q4 [4][7] - Non-GAAP earnings per share (EPS) were $2.92, reflecting strong revenue growth directly impacting the bottom line [4][9] - Gross margin for the first quarter was 12.3%, down 30 basis points from Q4, but in line with expectations [9] Business Line Data and Key Metrics Changes - Optical communications revenue was $747 million, up 19% year-over-year and 8% from Q4 [7][8] - Telecom revenue hit a record $412 million, surging 59% year-over-year and 15% from Q4, primarily driven by data center interconnect (DCI) products [7][8] - DCI revenue was $138 million, representing a 92% increase year-over-year and a 29% increase from Q4 [8] - DataCom revenue totaled $273 million, down 17% year-over-year but only 1% from Q4, indicating stronger-than-expected demand [8] - Non-optical communications revenue was $231 million, up 3% year-over-year and 5% from Q4, driven by high-performance computing (HPC) revenue of $15 million [8] Market Data and Key Metrics Changes - Automotive revenue was $122 million, up 19% year-over-year but down 5% from Q4 [8] - Industrial laser revenue was $40 million, up 12% year-over-year and flat sequentially [8] Company Strategy and Development Direction - The company is optimistic about extending strong momentum into the second quarter, with multiple growth drivers across its business [6][11] - Construction of Building 10, totaling 2 million square feet, is on track for completion by the end of calendar 2026, with portions expected to be completed by mid-2026 to support growth [6][10] - The introduction of a new revenue category for HPC products is expected to scale significantly over the coming quarters [5][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth driven by strong demand trends across various segments, particularly in telecom and HPC [4][11] - The company anticipates second-quarter revenue to be in the range of $1.05-$1.1 billion, representing a 29% increase year-over-year at the midpoint [11][12] - Management acknowledged ongoing component constraints but remains optimistic about overall demand trends [5][49] Other Important Information - The company ended the first quarter with cash and short-term investments of $969 million, up $35 million from Q4 [10] - Capital expenditures of $45 million were above maintenance levels due to ongoing construction of Building 10 [10] Q&A Session Summary Question: What is embedded in your December quarter outlook for DataCom? - Management refrained from commenting on individual components but emphasized their position to capitalize on the ongoing transition to photonics [15] Question: Does the HPC program take into account other customer engagements? - The HPC program was broken out as a separate category due to its complexity and potential for growth, with initial engagements going well [17][19] Question: How do the ramps of the HPC customer compare to the new telecom customer? - The HPC product is complex and has a slower ramp, while the new telecom product is a new offering that will grow as it gains market traction [23][25] Question: How many customers drove the sequential growth in telecom? - The growth was driven by a mix of customers across traditional telecom and DCI, indicating broad-based demand [30] Question: Can you discuss the share repurchase activity? - The share repurchase was limited due to a focus on capital allocation for growth, particularly in Building 10 expansion [36][37] Question: Is the component supply situation improving? - Management indicated that while some components remain in tight supply, they expect improvements as suppliers ramp up capacity [49][50]