Financial Performance - The company achieved operating revenue of 579,895.11 million yuan in the first half of 2025, with a decline in revenue and profit from photovoltaic equipment and materials due to cyclical adjustments in the industry [2] - The semiconductor business continued to grow, with unfulfilled contracts for integrated circuits and compound semiconductor equipment exceeding 3.7 billion yuan as of June 30, 2025 [2] Semiconductor Equipment Development - The company successfully delivered 12-inch atmospheric silicon epitaxy equipment to leading domestic customers, achieving international advanced levels in key performance indicators [3] - New products such as the 12-inch dry-in-dry-out edge grinding machine and 12-inch double-sided thinning machine are undergoing customer validation [3] Silicon Carbide Substrate Progress - The company made significant breakthroughs in the growth of 12-inch conductive silicon carbide crystals, addressing core challenges in temperature uniformity and crystal cracking [4] - The company is expanding its global customer verification for 8-inch silicon carbide substrates and has received bulk orders from international clients [4] Semiconductor Components and Materials - The subsidiary, Jinghong Precision, is enhancing its manufacturing capabilities for core components, focusing on precision processing and special welding [5] - The company has achieved domestic substitution for semiconductor quartz crucibles, leading the market share and overcoming technical bottlenecks for large-sized crucibles [5] Sapphire Business Growth - The sapphire material business experienced year-on-year growth driven by new applications in LED and consumer electronics sectors [5] Customer Base and Risk Management - The company has established a strong reputation among high-end clients in the semiconductor and photovoltaic industries, with long-term strategic partnerships [6] - To mitigate order fulfillment risks, the company focuses on large, financially stable clients and implements strict credit management and contract practices [6]

Summary of the Conference Call for 欧晶科技 Industry and Company Overview - The company operates in the quartz crucible industry, specifically focusing on photovoltaic and semiconductor applications [2][3][4]. Key Points and Arguments - **Market Price Decline**: The price of photovoltaic quartz crucibles has significantly dropped from over 40,000 yuan in 2023 to approximately 7,600 yuan by early 2025, leading to negative gross margins for this segment, which constitutes 70% of the company's revenue [2][3]. - **Sales Performance**: Despite the price drop, the company reported a 20% year-over-year increase in photovoltaic quartz crucible sales in Q2 compared to Q1 [2][15]. - **Product Structure Adjustment**: The company is actively adjusting its product mix by expanding into the semiconductor quartz crucible market, with a planned annual production capacity of 26,000 units [2][6]. - **Customer Base Expansion**: The company has begun small-batch deliveries to clients such as 中环领先 and 上海新盛, while also seeking to expand its customer base [2][6]. - **Cost Structure**: Current quartz crucible prices can cover cash costs, but high fixed costs due to decreased demand result in negative gross margins. Sales to 中环 are unprofitable, while other clients may offer potential profitability depending on order specifics [2][8][9]. - **Material Costs**: The market price for the inner layer of photovoltaic quartz crucibles, made from 西比克 sand, is around 90,000 yuan per ton, while domestic quartz sand prices range from 20,000 to 30,000 yuan [2][10]. - **Semiconductor Crucible Pricing**: Semiconductor-grade quartz crucibles are priced approximately twice that of photovoltaic crucibles, with the main sizes being 24 to 28 inches [4][13]. Additional Important Insights - **Future Demand Outlook**: The demand for photovoltaic crucibles is expected to remain stable in the second half of the year, with the company aiming to mitigate demand declines through external customer expansion [4][14]. - **Small Manufacturer Challenges**: Smaller crucible manufacturers face survival pressures due to unstable sand sources and quality issues, leading to a potential exit from the market [4][16]. - **Market Dynamics**: The company is monitoring market demand closely to determine if prices for quartz crucibles will increase similarly to silicon materials [7][8]. - **Synthetic Quartz Sand Development**: The company is exploring synthetic quartz sand production, which is currently dominated by foreign suppliers, to address domestic demand and quality issues [11][12]. This summary encapsulates the critical insights from the conference call, highlighting the challenges and strategic adjustments made by the company in response to market conditions.

Group 1 - The company expects a net loss for the reporting period, with projected losses ranging from 86 million to 70 million yuan, compared to a loss of 125.75 million yuan in the same period last year [1] - The loss attributable to shareholders after deducting non-recurring gains and losses is estimated to be between 89 million and 73 million yuan, compared to a loss of 128.40 million yuan in the previous year [1] - The basic earnings per share are projected to be a loss of 0.45 to 0.38 yuan per share, compared to a loss of 0.65 yuan per share in the prior year [1] Group 2 - The company plans to integrate existing technological advantages and accelerate new technology research and development, aiming to improve product adaptability and meet customized customer needs [2] - The company will enhance automation and intelligence of equipment to optimize product quality and expedite the construction of the semiconductor quartz crucible project [2] - The strategy includes implementing cost reduction and efficiency enhancement measures to improve product competitiveness and actively explore new customers while maintaining existing ones [2]

Fundraising Overview - The company has received approval from the China Securities Regulatory Commission to issue 4,700,000 convertible bonds at a face value of RMB 100 each, raising a total of RMB 470 million, with a net amount of RMB 462,740,311.33 [1] - The funds will be managed in a dedicated account, and a four-party supervision agreement has been signed with the underwriter and the bank [1] Fund Allocation Changes - The company has decided to reallocate RMB 100.409 million from the "Ningxia Quartz Crucible Phase II Project" to a new project, the "Semiconductor Quartz Crucible Construction Project," to enhance efficiency and competitiveness [1][2] - A total of RMB 329.01 million will be injected into its wholly-owned subsidiary, Ningxia Oujing, for the implementation of the fundraising projects [2] Fund Management and Supervision - A new dedicated account has been established for the storage and use of the funds related to the revised investment projects, with a three-party supervision agreement signed among the company, the bank, and the underwriter [3][5] - The agreement stipulates that the funds can only be used for the designated project and outlines the responsibilities of each party in monitoring and reporting fund usage [6][7]

Industry Overview - The photovoltaic (PV) industry is currently undergoing a phase of adjustment, with supply-demand imbalances and intensified competition leading to a decline in prices and increased losses in the manufacturing sector [1][2] - The industry is expected to achieve a rebalancing after over a year of adjustments, influenced by various factors including policy changes and market dynamics [1] Future Development Prospects - The PV industry is projected to see significant growth, with China's production of polysilicon, silicon wafers, cells, and modules reaching 1.82 million tons, 753 GW, 654 GW, and 588 GW respectively in 2024, all showing over 10% year-on-year growth [3] - The domestic installed capacity is expected to increase by 215-255 GW in 2025, with a global growth rate of approximately 15% [3] - Government policies are being implemented to promote healthy development and prevent vicious competition within the industry [3] Company Strategy and Projects - The company is investing 117 million CNY in a semiconductor quartz crucible project, aiming for an annual production of 26,000 units, which is expected to optimize its product structure [4] - The company plans to enhance its focus on R&D, product quality, and market expansion to improve operational efficiency and competitiveness [5][6] Financial Health - As of the end of 2024, the company reported a healthy cash flow situation, with sufficient cash assets to support normal operations [6] - The company has made a provision for asset impairment totaling over 600 million CNY, based on market conditions and accounting standards [6] Sales and Market Presence - The company has established strong relationships with major single crystal silicon manufacturers, with sales covering 17 provinces in China and expanding into international markets such as South Korea [7] - The company will not distribute profits in 2024 due to industry adjustments and to reinvest in equipment upgrades and R&D, ensuring long-term stability and competitiveness [8] Accounts Receivable Management - As of the end of 2024, the company reported accounts receivable of 324.99 million CNY and a bad debt provision of 17.31 million CNY, with a robust management system in place to mitigate risks [9]