Core Viewpoint - The company, Lens Technology, has established a deep ten-year partnership with a major North American client, positioning itself as a primary core supplier in various sectors, including smart cockpit modules and humanoid robots [2]. Group 1: Business Segments Growth Outlook - **Smartphones and Computers**: The company is expected to benefit significantly from a new innovation cycle initiated by major clients, focusing on exterior and structural components, which will enhance assembly operations and profit margins [2]. - **Smart Automotive and Cockpit**: Continuous introduction of new products such as wireless charging modules and communication modules, along with breakthroughs in multi-functional ultra-thin laminated automotive glass, will increase the per-vehicle value significantly [2]. - **Smart Glasses and Wearables**: The company has successfully applied its developed exterior, structural components, and optical lenses in several high-end AI glasses and headsets, with growth in smart watch components maintaining momentum [2]. - **Other Smart Devices**: Beyond the embodied intelligence market, the company has made new business breakthroughs in smart home, medical devices, high-end gimbals, and premium pet electronics, leveraging its lean manufacturing capabilities [3].

Core Viewpoint - The company is experiencing growth in net profit due to effective cost control and increased production of new models, with a focus on high-margin assembly business and strategic partnerships in various sectors [2][3][4]. Group 1: Financial Performance - The company's net profit growth outpaced revenue growth in the first half of the year, primarily due to effective cost management and efficiency measures implemented at the Changsha facility [2]. - Revenue from the Changsha facility increased by 30.92% year-on-year, with significant improvements in gross margin [5]. - Blue Si Precision and Xiangtan Blue Si reported slight declines in revenue and net profit, attributed to product transfers and increased R&D expenses, but are expected to recover with new product launches [4]. Group 2: Business Segments and Growth - The assembly business's revenue share increased, contributing to stable overall gross margins, with plans to transition to high-end hardware assembly to enhance profitability [3]. - The wearable business saw an increase in gross margin due to a higher share of metal frames in smartwatches, with growth expected across four main segments: smartphones, smart automotive, smart headsets, and other smart devices [6]. - The automotive business is expanding through collaborations with over 30 leading domestic and international automotive companies, focusing on new product development and value enhancement [7]. Group 3: R&D and Innovation - R&D expenses increased by 29.15% to nearly 400 million, focusing on consumer electronics, AI glasses, humanoid robots, and automotive glass [8]. - The company has made significant breakthroughs in AI glasses technology, establishing itself as a core supplier for major North American clients [9]. - The company is actively pursuing opportunities in the AI server market, particularly in liquid cooling technology, with plans for product launches and capacity expansion [10].

Core Insights - The company reported a higher net profit growth rate than revenue growth in the first half of the year, attributed to cost control and efficiency improvements at its Changsha facility, although increased R&D expenses impacted short-term profits [1] - The company plans to manage R&D expenses moderately in the second half of the year, following a nearly 30% net profit growth in Q2 [1] Business Segment Performance - Assembly Business: The company aims to position itself as a smart hardware manufacturer in the AI era, focusing on high-margin hardware assembly such as AI servers to enhance profitability [2] - Blue Si Precision: Revenue slightly decreased by 300 million, and net profit fell by 10 million due to a focus on mature products, but new product stocking in the second half is expected to drive growth [2] - Xiangtan Blue Si: Revenue grew by 30%, but profit declined by 50 million due to increased R&D expenses and order settlement methods; profitability is expected to improve with the mass production of AI glasses and new smartphone launches [2] - Changsha Blue Si: Revenue increased by 30.92% with significant improvements in gross margin, aiming for profitability this year [2] Financial Overview - Financial expenses were -130 million, with a foreign exchange gain of approximately 170 million in Q2; cash reserves decreased from 11 billion to 6.2 billion due to H-share issuance and debt repayment [3] R&D and Technology Collaboration - The company incurred significant R&D and prototyping costs due to multiple new projects, while also enhancing project management to control expenses [4] - In the AI glasses sector, the company is a core supplier for a North American client, collaborating with Rokid for assembly and applying self-developed technology [4] Embodied Intelligence Business Layout - The company established a robotics division in 2016 and plans to mass-produce humanoid robots in 2024, focusing on custom machine and core module capabilities [5] Asset and Capital Expenditure - Asset impairment was 359 million, a decrease of 71 million year-on-year; capital expenditure remained balanced at approximately 4 billion in the first half of the year [6] Tariffs and Supply Chain - The company mitigates tariff risks through global capacity and business diversification, maintaining a controllable supply chain with no impact from tariff policies [7] Overseas Capacity Layout - The Vietnam factory serves consumer electronics and automotive electronics clients, while the Thailand factory focuses on smart automotive cockpits and embodied intelligence, set to commence operations this year [8] New Products and Server Business - New products began mass production in June, with expectations for increased single-unit value and market share in the coming years; liquid cooling technology is anticipated to have significant market potential [9]