Macro Strategy - The core viewpoint indicates that in 2026, China's economy is expected to grow steadily, with inflation gradually improving and corporate profits likely to continue rising after a turning point in 2025. Global liquidity is anticipated to remain loose, and the relationship between China and the US may stabilize in the short term but could experience increased volatility in the long term. The AI industry trend is expected to drive changes in both upstream supply and downstream demand within the technology-related industrial chain [1][7]. - The overall preference ranking for major asset classes is stocks > commodities (industrial products) > gold > exchange rates > bonds [1][7]. - The macroeconomic outlook for 2026 predicts a 4.9% growth in China's economy, with investment recovery and a slight increase in CPI by 0.5% while PPI is expected to decline by 0.9% [1][7]. Fixed Income Strategy - The credit bond market is characterized by both opportunities and risks in supply and demand, with three main strategies focusing on liquidity, the pace of economic recovery, and regulatory policy changes [2][9]. - The strategy suggests a defensive approach with a focus on short to medium-term credit bonds while selectively engaging in long-term bonds for potential trading opportunities [2][9]. - The city investment bond sector is expected to maintain a "zero tolerance" regulatory stance, with ongoing adjustments to meet new development models, leading to a tight balance in financing [2][9]. Industry Insights Starry Technology (星宸科技) - Starry Technology is a leading global smart security chip company, focusing on the development and sales of smart security chips across three main areas: smart security, smart IoT, and smart automotive [11]. - The company is expected to achieve revenue of 2.354 billion yuan and a net profit of 256 million yuan in 2024, with a research and development expense ratio of 25.59% and a gross margin of 35.79% [11]. - Starry Technology holds a leading market share in IPC SoC and NVR SoC, with respective market shares of 36.5% and 38.7% in 2021 [11]. Zhongli Co., Ltd. (中力股份) - Zhongli Co., Ltd. is a global leader in electric forklifts, focusing on the green and intelligent development of material handling [12]. - The company is projected to achieve net profits of 910 million yuan, 1 billion yuan, and 1.13 billion yuan from 2025 to 2027, with corresponding PE ratios of 16, 15, and 13 times [12][13]. - The company benefits from the industry's electrification trend and is well-positioned for growth in the context of automation and intelligent logistics solutions [12][13]. Suzhou Keda (苏州科达) - Suzhou Keda is actively expanding its overseas market presence, particularly in line with the Belt and Road Initiative, and is involved in various international safety and information projects [14]. - The company is leveraging AI technology to enhance its product offerings, including smart video surveillance and communication systems [14]. - Despite short-term pressures on performance, the company is expected to recover as it capitalizes on AI integration and overseas expansion [14]. Sutech (速腾聚创) - Sutech has shown significant improvement in gross margins, particularly in its robotics segment, which is expected to enter a high-growth phase [15][16]. - The company reported a revenue of 4.07 billion yuan in Q3 2025, with a notable increase in sales from its robotics products [15][16]. - The focus on product iteration and market expansion positions Sutech for long-term growth potential in the robotics industry [15][16].

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Insights - The company is a leading global player in the smart security chip market, focusing on AIoT and automotive sectors, with a robust growth trajectory expected in the coming years [8]. - The company is projected to achieve revenues of 29.34 billion yuan, 36.33 billion yuan, and 44.87 billion yuan from 2025 to 2027, with corresponding net profits of 2.7 billion yuan, 4.1 billion yuan, and 5.9 billion yuan [8]. Summary by Sections Company Overview - The company specializes in the research and sales of smart security chips, with applications in smart security, AIoT, and automotive sectors [13]. - It has a stable shareholding structure with significant investment from MediaTek, ensuring no controlling shareholder [14]. Financial Analysis - The company reported a revenue of 2.354 billion yuan in 2024, a year-on-year increase of 16.49%, and a net profit of 256.26 million yuan, up 25.18% year-on-year [20]. - The smart security segment remains the primary revenue source, consistently contributing over 50% to total revenue [23]. Smart Security Market - The global market for smart security is experiencing rapid growth, with a projected compound annual growth rate (CAGR) of 6.3% from 2021 to 2026, reaching 29.9 billion USD by 2026 [41]. - The company holds a leading market share in both IPC SoC and NVR SoC segments, with 36.5% and 38.7% market shares respectively in 2021 [49]. Smart IoT and Automotive Sectors - The company is expanding into the smart IoT market, particularly in robotic and AI glasses sectors, leveraging its visual AI and 3D sensing technologies [60]. - In the automotive sector, the company is the second-largest supplier of driving recorder chips in China, with plans to penetrate the front-mounted market [8]. Research and Development - The company maintains a high R&D expenditure, with a rate of 25.59% in 2024, reflecting its commitment to innovation and product development [27]. - The R&D team constitutes 77.5% of the total workforce, indicating a strong focus on technological advancement [27].

Investment Rating - The investment rating for Xingchen Technology (301536) is maintained at "Accumulate" [4][7]. Core Views - The company reported stable revenue growth, achieving operating income of 2.166 billion yuan in the first three quarters of 2025, a year-on-year increase of 19.50%. The net profit attributable to the parent company was 202 million yuan, up 3.03% year-on-year [2][3]. - All three major business segments experienced double-digit year-on-year growth, with the fastest growth in smart IoT, followed by smart automotive and smart security. The fastest growth within the segments was seen in smart robotics, with 5.5 million units shipped in the first half of the year and maintaining double-digit growth in Q3 [3]. - The gross profit margin improved to 33.42%, driven by an increase in the proportion of mid-to-high-end chips and strong overseas sales. The competitive landscape in the main business is stabilizing, with appropriate price adjustments [3]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company achieved operating income of 2.166 billion yuan, a 19.50% increase year-on-year, and a net profit of 202 million yuan, reflecting a 3.03% growth [2][3]. - The projected operating income for 2025, 2026, and 2027 is 2.932 billion yuan, 3.531 billion yuan, and 4.196 billion yuan, respectively, with net profits of 302 million yuan, 433 million yuan, and 547 million yuan [4][6]. Business Strategy - The company is developing an integrated "perception + computation + connectivity" solution for automotive applications, which includes interior and exterior visual perception, 3D perception, and advanced driver assistance systems [3]. - The acquisition of Furuikuan has contributed to revenue from automotive Bluetooth chips, with potential sales of multiple chips per vehicle significantly increasing revenue opportunities in the automotive sector [3]. Valuation Metrics - The projected earnings per share (EPS) for 2025, 2026, and 2027 are 0.72 yuan, 1.03 yuan, and 1.30 yuan, respectively. The price-to-earnings (P/E) ratios are projected to be 82.58, 57.69, and 45.66 for the same years [6][11].

Group 1: Company Performance - In the first three quarters of 2025, the company achieved approximately CNY 2.17 billion in revenue, representing a year-on-year growth of about 19.5% [3] - The third quarter revenue reached a historical high, with a year-on-year increase of approximately 21.1% and a quarter-on-quarter growth of about 7.6% [3] - The company's net profit for the first three quarters was approximately CNY 200 million, reflecting a year-on-year growth of about 3% [6] Group 2: Business Segments - All three major business lines experienced double-digit year-on-year growth, with the fastest growth in smart IoT, followed by smart automotive, and stable growth in smart security [3] - In the smart robotics sector, the company shipped 5.5 million units in the first half of the year, maintaining double-digit growth in the third quarter [3] Group 3: Profitability and Margins - The gross margin for the reporting period was 33.4%, showing a positive trend across the quarters [3] - Factors contributing to the expected improvement in gross margin include an increase in the proportion of mid-to-high-end chips, growth in overseas sales, and a stable competitive landscape in the core business [4][5] Group 4: R&D and Marketing Investments - R&D investment for the first three quarters was approximately CNY 500 million, a year-on-year increase of about 15.8%, with an R&D investment rate of approximately 23.1% [7] - Marketing investment reached approximately CNY 22.6 million, reflecting a significant year-on-year increase of about 58.9% [7] Group 5: Future Outlook - The company is confident in maintaining growth momentum due to favorable factors such as chip price adjustments and the introduction of mid-to-high-end chips [7] - The company plans to adjust prices for certain products in response to rising storage chip prices, ensuring reasonable profit levels [5][15]