Summary of Dongwei Technology Conference Call Company Overview - **Company**: Dongwei Technology - **Industry**: PCB (Printed Circuit Board) Equipment Manufacturing Key Financial Highlights - **Q2 Revenue**: 232 million RMB, up 19.14% YoY [2] - **Net Profit**: 25.5 million RMB, up 3.23% YoY, and up 49.93% QoQ [2] - **H1 2025 Revenue**: 443 million RMB, up 13.07% YoY [3] - **H1 2025 Net Profit**: 42.5 million RMB, down 23.66% YoY due to lack of high-margin new energy product revenue and rising raw material costs [3] Product Development and Market Demand - **Vertical Continuous Plating Equipment**: Orders increased over 100% YoY, significantly contributing to revenue growth [2][3] - **Three-in-One HDI Advanced Products**: Approximately 10 units deployed, with expected order increases in H2 and significant growth in 2026 [2][6] - **Horizontal Three-in-One Plating Equipment**: Addresses issues of chemical binding in sales, offers broader applicability, and superior plating uniformity compared to German products [2][8] - **Global Demand for Horizontal Three-in-One Equipment**: Estimated annual demand between 500 million to 1 billion RMB, with a gross margin of 40%-45% [9] Technological Advancements - **Pulse VCP Technology**: Enhances copper thickening in deep holes, accounting for 60% of sales with a gross margin of about 40% [10] - **Comparison of Plating Technologies**: Pulse VCP is suitable for high-aspect-ratio boards, while horizontal three-in-one is for HDI boards [10][11] Market Trends and Competitive Landscape - **Increased Overseas Orders**: Now 20%-30% of total orders, primarily from South Korea, Japan, Europe, and Southeast Asia [5][15] - **Challenges for New Entrants**: Significant technical and time challenges exist for companies attempting to enter the plating equipment market [16] Profitability and Pricing Strategy - **Profit Margin Trends**: Expected to increase due to selective order acceptance and higher export orders with better margins [14][26] - **PCB Order Situation**: Orders are full, with some capacity constraints, but no immediate price increases anticipated [25] Future Outlook - **Market Expansion**: Plans for a technology service center in Thailand to enhance international market presence [5][15] - **R&D Expectations**: Anticipated improvements in market performance and R&D outcomes over the next one to two years [28] Additional Insights - **Customer Validation**: Ongoing collaborations with solid-state battery manufacturers and positive feedback on new products [19][21] - **Production Capacity**: Current orders sufficient for 3-4 months of production, with no immediate need for overtime [25][27] This summary encapsulates the key points from the conference call, highlighting the company's financial performance, product developments, market trends, and future outlook.

Core Viewpoint - The company reported a revenue of 443 million yuan in the first half of 2025, a year-on-year increase of 13.07%, while the net profit attributable to shareholders decreased by 23.66% to 42.5 million yuan, indicating a mixed performance driven by various market factors [1] Group 1: Financial Performance - In Q2 2025, the company achieved a revenue of 232 million yuan, reflecting a year-on-year increase of 19.14% and a quarter-on-quarter increase of 9.69% [1] - The net profit attributable to shareholders in Q2 was 25.5 million yuan, showing a year-on-year increase of 3.23% and a quarter-on-quarter increase of 49.93% [1] - The decline in half-year net profit was primarily influenced by the new energy equipment sector and rising costs related to depreciation and raw materials [2] Group 2: Market Trends and Opportunities - The PCB industry is experiencing a high demand due to the rapid development of AI-related big data storage, leading to a positive outlook for future orders and a recovery in production capacity [2] - The company’s contract liabilities reached a record high of 537 million yuan, a 45.92% increase compared to the end of 2024, indicating strong order intake, particularly in vertical continuous plating equipment for PCBs [2] - The company has successfully developed a horizontal three-in-one plating device, breaking the monopoly of foreign competitors and gaining recognition in the high-end PCB market [4] Group 3: Product Development and Innovation - The company is focusing on upgrading its equipment to meet the increasing demands for high-frequency and high-density interconnect PCBs, driven by the growth in AI server industries [3] - The introduction of glass substrate-related equipment is aimed at the semiconductor packaging market, with successful deliveries of PVD, TGV, and RDL equipment to customers [5] - The company’s strategic entry into the glass substrate market is expected to provide significant profit elasticity as the industry matures [5] Group 4: Future Outlook - The company anticipates a rebound in performance supported by the expansion of domestic PCB enterprises in Southeast Asia and the industrialization of high-end HDI and glass substrate markets [5] - Projected net profits for 2025, 2026, and 2027 are estimated at 181 million, 272 million, and 337 million yuan respectively, with corresponding PE ratios indicating strong growth potential [5]

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company achieved a revenue of 750 million yuan in 2024, a year-on-year decline of 17.51%, with a net profit attributable to the parent company of 69.27 million yuan, down 54.25% year-on-year [1] - In Q1 2025, the company reported a revenue of 211 million yuan, a year-on-year increase of 7.08%, while the net profit attributable to the parent company was 17.01 million yuan, down 45.11% year-on-year [1] - The company is approaching a revenue inflection point, with a significant increase in contract liabilities, reaching a historical high of 435 million yuan by Q1 2025, indicating a solid foundation for future performance rebound [2] - The expansion of production capacity in Southeast Asia and the booming demand for HDI (High-Density Interconnect) are expected to benefit the company's PCB equipment business significantly [3] - High R&D investment is aimed at achieving innovation and excellence in high-end circuit boards and emerging market equipment, which is expected to open up long-term growth opportunities for the company [4] Summary by Sections Financial Performance - In 2024, the company reported a revenue of 750 million yuan, with a year-on-year decrease of 17.51% and a net profit of 69.27 million yuan, down 54.25% [1] - Forecasted revenues for 2025, 2026, and 2027 are 1.40 billion yuan, 1.69 billion yuan, and 2.01 billion yuan, respectively, with expected growth rates of 86.25%, 21.19%, and 18.60% [8] - The net profit for 2025, 2026, and 2027 is projected to be 183.15 million yuan, 275.12 million yuan, and 341.33 million yuan, reflecting growth rates of 164.39%, 50.21%, and 24.07% [8] Market Position and Opportunities - The company is positioned to benefit from the expansion of domestic PCB enterprises in Southeast Asia, with a significant increase in new orders expected in 2025 [3] - The demand for HDI is anticipated to grow due to trends in AI servers and automotive intelligence, providing further opportunities for the company [3] - The company's VCP equipment has achieved domestic leadership in several key metrics, with ongoing R&D efforts aimed at enhancing market share and technological capabilities [4]