Summary of Yuan Zheng Technology Conference Call Company Overview - **Company**: Yuan Zheng Technology - **Industry**: Automotive diagnostics and software solutions Key Points and Arguments Financial Performance - **2023 Revenue**: Expected to exceed 2 billion RMB, with a year-on-year growth of 8%-9% [2][3] - **Q3 Performance**: Orders in North America decreased by 9% year-on-year due to tariffs and pre-stocking by major clients, while overall revenue for the first three quarters grew by 8% [2][3] - **Future Revenue Goals**: Targeting 10% annual revenue growth and 15%-20% net profit growth over the next three years [2][4] Regional Performance - **European Market**: Strong performance with a 27% year-on-year growth; UK and France subsidiaries expanding sales teams for better results [2][7] - **North American Market**: Expected to remain flat or see slight growth due to tariff impacts and cautious behavior from major clients [2][7][8] Product Development and Innovation - **AI Product Launch**: New AI series products, including Langchain AI for multilingual support, to be showcased at CMA Show [2][6] - **Software Business Growth**: Projected software sales of 240 million RMB, with revenue around 210 million RMB, driven by increased device sales and optimized subscription models [2][5][11] Strategic Initiatives - **Cost Optimization**: Plans to save 30 million RMB through bulk purchasing and domestic chip replacements [2][6] - **Remote Diagnosis Business**: Expected revenue of 30 million RMB in 2025, with a target of 40 million RMB in 2026, driven by increased average transaction value and usage [2][13] Market Trends and Competition - **Data Business Growth**: Anticipated 40% growth in data revenue, primarily from providing diagnostic data to insurance companies and used car dealers [2][24] - **Competitive Positioning**: Company products are competitively priced compared to peers, enhancing market share [2][18][30] Future Outlook - **2025 Revenue Forecast**: Overall revenue growth of 8%-9% expected, with European market growth potentially exceeding 20% [2][8] - **Long-term Growth Drivers**: Focus on integrated diagnostics and software as core growth areas, with significant contributions from remote diagnostics and data services [2][10][12] Dividend Policy - **Dividend Strategy**: Continuation of semi-annual dividends based on stable operational performance, with recent examples of consistent payout ratios [2][21] Market Entry and Expansion - **Full Circulation Application**: Submitted application for full circulation, aiming for approval to enter Hong Kong Stock Connect [2][22] New Energy Vehicle Market - **Sales Progress**: Initial sales of new energy vehicle diagnostic equipment are underway, with expectations for growth as warranty periods expire [2][27][28] Conclusion Yuan Zheng Technology is positioned for steady growth in the automotive diagnostics sector, with a strong focus on software and AI innovations, while navigating challenges in the North American market and capitalizing on opportunities in Europe and the data services space.