Summary of Zhenyu Technology Conference Call Company Overview - **Company**: Zhenyu Technology - **Industry**: Precision manufacturing, robotics, lithium battery components Key Financial Performance - **Revenue**: 2025 H1 revenue reached 40 billion CNY, a 30% year-on-year increase [2] - **Net Profit**: Net profit attributable to shareholders was 2.11 billion CNY, up 60% year-on-year [2] - **Precision Components Revenue**: 32 billion CNY, with lithium battery components contributing 25 billion CNY, growing over 40% [1][2] - **Motor Core Revenue**: 7 billion CNY, with a gross margin exceeding 20% [1][2] - **Mold Business**: Revenue of 2.3 billion CNY, a 15% increase, with a stable gross margin above 50% [1][3] - **Operating Cash Flow**: Positive cash flow of 1.7 billion CNY in H1, with 2.2 billion CNY in Q2 [1][3] Business Segments Precision Components - **Lithium Battery Components**: Gross margin improved from 12% to nearly 13%, reaching 16% in Q2 [1][5] - **Motor Cores**: Steady performance with expected profitability improvement from increased production of Jiangjiang process cores [6] Mold Business - **Growth**: Continued growth with a focus on external sales despite some internal consumption [8] Robotics Sector - **New Business Focus**: Emphasis on precision manufacturing systems, providing competitive hardware solutions in robotics [4] - **Product Development**: Third-generation linear actuators developed, achieving a weight reduction of 22.5% [4][12] - **Client Engagement**: Direct engagement with major domestic and international robotics clients, including Xiaopeng and Xiaomi [4][9] Future Outlook - **Growth Drivers**: Anticipated growth in precision components driven by increasing downstream demand [6] - **Solid-State Battery Impact**: Short-term impact on lithium battery components is expected to be minimal [7] - **Capital Expenditure Plans**: Plans for new land and factory construction, focusing on automated production lines for planetary roller screws [14] - **International Expansion**: Consideration of establishing production capabilities in Serbia for robotics components [15][18] Market Dynamics - **Competition**: Increasing competition in the industry, but few can consistently provide high-quality products [17] - **Pricing Trends**: Prices are expected to decline with increased production scale, but profitability remains intact [17] Strategic Initiatives - **Marketing and Sales**: Enhanced efforts in marketing and sales for the planetary roller screw market, with potential revenue growth in the second half of the year [16] - **Technological Development**: Ongoing development of integrated solutions, including the creation of a highly integrated bionic arm [21][22] Investment Considerations - **Market Position**: Zhenyu Technology's strong performance and strategic initiatives provide a solid foundation for potential investment opportunities [23]