Summary of Conference Call for Hongxin Electronics Company Overview - **Company**: Hongxin Electronics - **Period**: First half of 2025 Key Financial Metrics - **Net Profit**: 53.99 million yuan, up 9.85% year-on-year [2][3] - **Net Profit (excluding stock incentive impact)**: 64.80 million yuan, up 31.83% year-on-year [2][3] - **Operating Revenue**: 3.494 billion yuan, up 15.01% year-on-year [3] Business Segments Performance FBC Business - **Revenue**: 1.694 billion yuan, up 11.57% year-on-year [2][4] - **Gross Margin**: Increased to 7.82%, up 6.31 percentage points year-on-year [4] - **Market Drivers**: Recovery in AI mobile phone market and recognition from leading brands [4] AI Computing Business - **Revenue**: 1.482 billion yuan, up 33.885% year-on-year [2][5] - **AI Resource Service Revenue**: 235 million yuan, up 3,300% year-on-year, with a gross margin of 34.26% [5] - **Total Signed Resource Service Contracts**: 5.6 billion yuan, with 830 million yuan recognized as revenue [5] Technological Developments - **Collaboration**: Joint development of liquid-cooled super-node computing cabinets with Tax Source Technology, achieving 30% energy savings [2][6] - **New Product Matrix**: Development of liquid cooling technology products, enhancing deployment efficiency [6] Future Outlook - **Order Fulfillment**: All signed orders totaling 5.562 billion yuan are being fulfilled, with a five-year lease structure [9] - **Resource Service Revenue**: Expected to increase, currently accounting for about 16% of total revenue [9] - **Expansion Plans**: Construction of a 12.8 billion yuan resource center in Qingyang to support future growth [7][21] Market Dynamics - **Government Policy Impact**: Current policies do not affect the delivery of previously signed contracts, as all equipment has been delivered and accepted [8][10] - **High-Performance Chip Demand**: Continued demand for high-performance chips, with a focus on domestic chip development [10][11] Competitive Positioning - **Business Model**: Differentiation from competitors like Coreweave by providing comprehensive hardware and solution services [12][13] - **Manufacturing Advantage**: Strong manufacturing background allows for a complete supply chain from chip sourcing to after-sales service [18] Strategic Initiatives - **Investment in Computing Centers**: Plans to invest in large-scale computing centers to meet growing demand [25][21] - **Partnerships with Domestic Chip Manufacturers**: Strengthening collaborations with local chip manufacturers to enhance competitiveness [23][24] Inventory Management - **Inventory Increase**: Driven by revenue growth and increased equipment purchases, reflecting a healthy business expansion [30]

Core Viewpoint - In the first half of 2025, Hongxin Electronics (300657) demonstrated accelerated transformation and structural improvement, achieving a revenue of 3.494 billion yuan, a year-on-year increase of 15.01%, and a net profit attributable to shareholders of 53.9931 million yuan, up 9.85% year-on-year, with a non-recurring net profit of 47.5062 million yuan, a significant increase of 705.74% [1] Group 1: Business Performance - The company's FPC (Flexible Printed Circuit) business turned profitable in a single quarter, while the AI computing power sector is gradually forming a complete ecological loop, laying the foundation for future development [1] - FPC business revenue reached 1.694 billion yuan, a year-on-year increase of 11.57%, further solidifying the company's position in the industry [1] Group 2: AI Market Opportunities - New product categories such as AI PCs and AI glasses are rapidly emerging, creating new growth opportunities, with global AI glasses shipments expected to reach 12.8 million units in 2025, and the Chinese market experiencing over 100% year-on-year growth [2] - The company has achieved mass production of FPC solutions for these cutting-edge terminals and made breakthroughs in several cooperative projects, becoming a potential driver for the company's new growth [2] Group 3: AI Computing Power Strategy - Under the "ALL IN AI" strategy, the company is focusing on "computing power hardware + overall solutions," continuously strengthening its AI computing power business layout [2] - The computing power business achieved revenue of 1.482 billion yuan, a year-on-year increase of 33.85% [2] Group 4: Infrastructure Development - As an important participant in the "East Data West Calculation" strategy, the company is advancing green computing power infrastructure construction in regions like Gansu and the East, with a planned total investment of 12.8 billion yuan for a green intelligent digital infrastructure project [3] - The company is promoting the integration of "energy + computing power" development, leveraging local abundant green electricity resources to build an efficient and low-carbon computing power foundation for the future [3] Group 5: Technological Innovations - The company has completed testing of a liquid-cooled super-node computing cabinet developed in collaboration with Suiruan Technology, capable of supporting the training of large models with over 300 billion parameters [3] - The company has also launched a "computing power container" product suitable for new energy scenarios, which can be deployed in wind and solar power bases, achieving local consumption of green electricity and shortening deployment cycles [3]