Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [5][8]. Core Views - The company is positioned as a leader in the smart projection industry, with a focus on home use and expanding into automotive and commercial sectors. The report highlights a recovery in profitability and market share, driven by cost advantages and a stable domestic market [7][11]. - The company is expected to see significant growth in net profit from 2025 to 2027, with projections of 300 million, 600 million, and 800 million RMB respectively, reflecting year-on-year growth rates of 151.3%, 99.8%, and 33.4% [6][8]. Summary by Sections Market Performance - The closing price of the company's stock is 127.00 RMB, with a total market capitalization of 8,890 million RMB and a debt-to-asset ratio of 46.95% [3]. Financial Forecast and Valuation - Revenue projections for the company are as follows: 3,557 million RMB in 2023, 3,405 million RMB in 2024, and expected growth to 3,872 million RMB in 2025, with a year-on-year growth rate of 13.74% [6]. - The expected earnings per share (EPS) are projected to rise from 1.72 RMB in 2023 to 4.31 RMB in 2025, with a corresponding price-to-earnings (P/E) ratio of 29.45 for 2025 [6]. Business Overview - The company has established itself as a leader in the domestic smart projection market, maintaining the highest shipment volume for seven consecutive years. It is now expanding into automotive and commercial sectors, aiming to become a global leader in projection devices [16][21]. - The company’s revenue from projection equipment and accessories reached 1,490 million RMB in the first half of 2025, accounting for 96.2% of total revenue, while internet value-added services contributed 60 million RMB [27]. Growth Drivers - The domestic market is stabilizing, with the company expected to regain pricing power and improve profit margins. The report notes that the industry is entering a consolidation phase, which may benefit the company as it enhances its market share [7][30]. - The company is also focusing on expanding its overseas market presence, with significant growth potential in regions like North America and Western Europe, where the acceptance of smart projection products is gradually increasing [55][67]. New Business Development - The automotive business is rapidly developing, with the company already securing eight contracts for vehicle-mounted projection products. This segment is expected to contribute significantly to revenue in the coming years [72][80]. - The commercial business is anticipated to start generating revenue in the second half of 2025, leveraging the company’s established technology and brand strength [10][27].

Investment Rating - Industry rating: Recommended [5] Core Insights - The global commercial projection market is currently subdued due to macroeconomic factors and competition from alternatives like conference flat panels and TVs. However, the introduction of a new pure laser hybrid solution by the company XGIMI is expected to leverage its technological advantages from the consumer market to commercial applications [9][10] - In Q1 2025, the global commercial projection market saw a penetration rate of laser light sources reach 31.5%, an increase of 2.2 percentage points year-on-year, indicating a growing preference for laser technology over traditional LED and bulb sources [10] Summary by Sections 1. Weekly Topic: XGIMI Enters Commercial Projection Market - XGIMI announced its entry into the commercial projection market with a new pure laser hybrid solution at a technology conference in Chengdu [9] - The global commercial projection market faced a decline, with Q1 2025 shipments totaling 57.7 million units, down 13.9% year-on-year, while the overall projection market saw a slight increase of 2.2% [9][10] 2. Key Company Announcements - Huabao New Energy reported a significant increase in outdoor power sales in the Americas, with a 173% year-on-year growth in volume and a 106% increase in sales revenue [11] - Juxing Technology plans to acquire an 18.47% stake in Hangzhou Micro-Nano Technology for 45.4 million RMB, which will make Micro-Nano a subsidiary with projected revenues of 146 million RMB in 2024 [11] 3. Data Tracking 3.1 Raw Material Data - As of July 18, 2025, LME copper prices increased by 0.3% week-on-week, while aluminum prices remained stable [16] 3.2 Shipping Rates and Exchange Rates - The CCFI composite index decreased by 0.77% week-on-week, with specific routes showing varied changes [24] 3.3 Real Estate Data - From January to June 2025, the sales area of commercial housing decreased by 3.5% year-on-year, with significant declines in construction and new starts [27]

Summary of the Conference Call for XGIMI Technology Company Overview - **Company**: XGIMI Technology - **Date of Call**: June 27, 2025 Key Points Industry and Market Performance - **Gross Margin**: Domestic market gross margin is approximately 30%, while overseas market gross margin has recently approached 45% [2][4] - **Market Demand**: Domestic market demand is under pressure, but profit margins are improving, and scale remains stable. Overseas markets continue to grow, with Europe generating revenue of 600 million RMB last year, growing over 40%, and the US market nearing 200 million RMB with similar growth rates [2][6] - **Japan Market**: The Japanese market has been a drag on overall overseas growth due to channel adjustments [2][6] Product Lines and Financials - **Home Products**: - Entry-level Play and Z series products have a gross margin close to 30% in the domestic market. Mid-to-high-end products like RS20 Ultra can achieve gross margins of 35% to 40% [3] - The gross margin for the K6 series has improved from about 10% to around 30% due to a 40% drop in TI DLP chip prices and design iterations [5] - **Vehicle Business**: - Focused on smart cockpits and smart headlights, with expected revenue contribution of 300 to 400 million RMB this year. The business is in the investment phase, aiming for stable profitability at around 1 billion RMB in revenue [7][16] - **Commercial Projection Business**: - Production began at the end of June, with shipments starting in July. The goal is to capture 10%-20% of the 10 billion RMB domestic commercial market [8][9] - Expected revenue of tens of millions RMB this year with a gross margin of 40%-50% [8] Strategic Developments - **LCOS Solution**: Collaboration with HiSilicon on LCOS solutions is ongoing, with potential mass production in Q4. This could disrupt TI's chip monopoly [3][10][11] - **North American Market**: Facing a 37.5% tariff on exports, the company plans to establish a factory in Vietnam to support future exports to North America and Europe [18][19] Future Outlook - **Revenue and Profit Goals**: - The company aims for stable revenue in the domestic market while maintaining growth in overseas markets. The home business is expected to generate over 400 million RMB in profit [27] - The vehicle business is projected to reach breakeven next year and achieve stable profitability by the following year [16] - **Market Strategy**: - The company does not plan to engage in large-scale marketing or price competition but will focus on integrating the midstream supply chain to mitigate risks from declining terminal demand [24] Additional Insights - **Sales Performance**: The suspension of national home appliance subsidies has had a limited impact on sales, primarily affecting product structure rather than overall sales volume [10] - **Product Mix**: The Play and Z series account for over 60% of total sales, with the Play series alone contributing over 30% [29] - **Dividend Plans**: The company plans to issue dividends this year, maintaining a historical payout ratio of around 50% [30]