Summary of Luvi Optoelectronics Conference Call Company Overview - **Company**: Luvi Optoelectronics - **Industry**: Semiconductor and Display Technology Key Financial Performance - **2024 Revenue Growth**: Achieved a significant revenue increase of 30% year-on-year, with a notable 43.2% growth in Q4 [2][3] - **Net Profit Growth**: Net profit attributable to shareholders increased by 28%, with a remarkable 72.55% growth in Q4 [2][3] - **Q1 2025 Performance**: Revenue rose by 47% year-on-year, driven by strong downstream demand and capacity enhancements, while net profit growth was 20% due to foreign exchange losses [2][5] Expansion Plans - **Semiconductor Equipment**: New semiconductor-specific equipment was added by the end of 2024, with plans to expand four production lines through a convertible bond project [2][6] - **Production Trials**: Plans to initiate trial production of 90nm and 40nm products in Suzhou and Chengdu, respectively, in 2025 [4][10] - **Major Projects**: Ongoing projects include the revival of semiconductor production and the Xiamen display template base project, with a total investment of 2 billion yuan [14][15] Market Dynamics - **Masking Board Demand**: The demand for masking boards is non-linearly related to the performance of downstream industries, with a 30% average compound growth rate over the past five years [2][8] - **Domestic Market Growth**: Increased domestic demand and the acceleration of wafer plant construction are expected to drive domestic substitution and growth in the masking board market [2][8] Industry Trends - **Semiconductor and Display Growth**: Both industries are experiencing growth, with increasing demand for mature process chips and advancements in panel technology [9] - **OLED and LCD Revenue Structure**: In 2024, OLED accounted for 40% and LCD for 60% of the display business, with OLED surpassing 50% in Q1 2025 [4][13] Competitive Landscape - **Market Position**: The company maintains a competitive edge through stable development, robust revenue growth, and leading profitability, despite intense competition in the semiconductor and display sectors [4][23] - **Future Market Share Goals**: The company aims to achieve a 30% market share in the domestic display masking board market within five years [16][17] Financial Management - **Impact of Tariffs**: U.S. tariffs have had no negative impact on the company, while Chinese counter-tariffs may protect domestic masking board manufacturers [4][12] - **Exchange Rate Management**: The company plans to enhance foreign exchange management to mitigate profit volatility caused by currency fluctuations [31] R&D and Product Development - **Technological Advancements**: The company has made significant progress in covering 130nm and below processes, with ongoing efforts to advance to 90nm and lower [21][22] - **Focus on High-Precision Templates**: Emphasis on developing high-precision templates for both display and semiconductor applications [26] Order Visibility and Market Demand - **Order Visibility**: The company has a one-month order visibility, with strong demand expected to continue into Q2 2025 [27] - **Market Demand Trends**: Anticipated strong demand for large-size displays, particularly in the TV segment, with the company being a key supplier for the domestic market [27] Future Outlook - **Investment Plans**: The company is set to continue investing in both the panel and semiconductor sectors, with a focus on expanding production capabilities and market share [28][29]