Summary of Han Gao Group Conference Call Company Overview - Han Gao Group operates in the home hardware industry, focusing on three main categories: basic hardware, storage hardware, and kitchen & bathroom hardware [4][5]. Market Potential - The basic hardware market share is less than 5%, with a market potential of approximately 50-60 billion RMB. Revenue is expected to grow from 1.2 billion to 12 billion RMB [2][6]. - In the storage hardware sector, Han Gao's market share is close to 10%, with potential to increase to 20%, contributing an additional 2 billion RMB in revenue [2][6]. - The total transaction value of home building materials in China for 2023 is 120 billion RMB, with storage hardware expenditures around 8 billion RMB [2][7]. Competitive Landscape - Han Gao faces competition from numerous unlisted companies such as Baolong and Dongtai, particularly in the basic hardware sector [10]. - The company has established a strong competitive position in the storage hardware market, while its presence in the kitchen & bathroom hardware market remains limited [12]. Revenue Growth and Projections - Future revenue projections indicate that Han Gao could achieve a total revenue of 140 billion RMB from basic and storage hardware combined [6][24]. - The company has experienced a compound annual growth rate (CAGR) of 27% in revenue and 57% in profit over the past few years [15]. Production and Cost Efficiency - Han Gao plans to increase production capacity by 250,000 square meters, resulting in a total capacity increase of approximately 60%. This will lead to reduced manufacturing and transportation costs, enhancing operational efficiency [3][18]. - The company’s current OEM ratio is below 30%, and as revenue grows, this ratio is expected to decrease, improving gross margins [9]. Sales Channels - The sales distribution includes 66% from direct sales, 13% from e-commerce platforms, and 12% from cloud business models, with approximately 10% from large B2B clients [17]. Brand and Marketing Strategy - Significant investment in brand store development has positively influenced consumer purchasing behavior and contributed to revenue growth [11]. - Han Gao has built a comprehensive channel system that includes offline direct sales, e-commerce, and cloud business, creating a differentiated competitive advantage [16]. Industry Characteristics - Home building materials exhibit semi-customization features, leading to complex supply chain management and strong brand attributes. This complexity impacts competition significantly [8][9]. Future Outlook - The company is expected to reach a revenue target of 150 billion RMB, with net profit margins between 15% to 20%, potentially achieving a market valuation of 500 to 600 billion RMB [24].

Group 1: Investor Relations Activity Overview - The investor relations activity was a site visit held on July 16, 2025, at the company meeting room [3] - Attendees included representatives from various investment firms such as Guoyuan Securities, Linrui Investment, and others [3] - Company representatives included Chairman and General Manager Mr. Hu Xiang, Vice President Ms. Chen Yin, and Financial Officer Mr. Wang Xiaozhi [3] Group 2: Core Competitiveness - The company possesses modular supply capabilities with a diverse product range, including mold design, metal structural parts, and precision machining [5] - Established stable partnerships with major appliance manufacturers like Haier, Midea, and BOE, providing a reliable income source [5] - A highly skilled customer service team enhances customer satisfaction and loyalty through tailored services [5] - Geographical advantage as part of the largest white goods base in China, benefiting from regional industrial collaboration [5] Group 3: Fundraising Project Status - Fundraising projects have entered the trial production phase, with full production expected by the end of the year, focusing on high-precision metal structural components [6] Group 4: Future Development Plans - The company has established a sliding rail division targeting the home appliance, automotive, and server sectors [7] - Plans to manufacture various refrigerator models, including commercial and ecological planting refrigerators, with production expected to commence by year-end [7] Group 5: Equity Incentive Plan - Details regarding the equity incentive plan will be provided in the company's official announcements [8]

Investment Rating - The report maintains a "Positive" investment rating for the industry [11] Core Insights - The home hardware industry is a high-quality sector with significant growth opportunities, characterized by high supply chain barriers and diverse application scenarios [3][8] - The market space for home hardware exceeds 1 trillion yuan, with estimated market sizes of approximately 540 billion yuan for basic hardware, 130 billion yuan for storage hardware, and 480 billion yuan for kitchen and bathroom hardware [8][26] - The leading brands in the home hardware market are relatively scarce, with Han Gao Group gradually establishing brand advantages through design and channel strategies [10][19] Summary by Sections Home Hardware: A High-Quality Sector - Home hardware serves as an intermediate product in home consumption, directly influencing the quality and class of downstream products, thus possessing both functional and consumer attributes [19][20] - The industry is characterized by a high degree of customization and a significant scale economy threshold, necessitating companies to build channel and cost advantages alongside brand recognition [19][20] Market Structure: Scarcity of Leading Brands - The global home hardware market exceeds 300 billion yuan, with leading brands being relatively scarce. Key players include Blum, HAFELE, and Han Gao Group [9][10] - Han Gao Group focuses on the domestic consumer market, while other companies like TUT and Xinghui primarily engage in export business [9] Han Gao Group: Accelerating Growth as a Leading Brand - Han Gao Group is enhancing its retail brand barriers through design capabilities, celebrity endorsements, and after-sales support [10] - The company is projected to achieve revenues of approximately 2.9 billion yuan in 2024, with a net profit of about 530 million yuan, reflecting a net profit margin of around 19% [10] - The company has experienced a compound annual growth rate (CAGR) of approximately 27% in revenue and 57% in net profit over the past five years [10] Competitive Factors in Home Hardware - Different categories of home hardware face varying competitive factors: 1. Storage hardware primarily competes on brand and channel [19][44] 2. Basic hardware focuses on channel, cost, and brand competition [19][44] 3. Kitchen and bathroom hardware competes on channel, brand, and cost, with competition from leading sanitary and appliance brands [19][44]

Core Insights - The company, Guangdong Tuocheng Technology Development Co., Ltd., is experiencing a surge in orders, with over 50 million yuan in pending orders due to increased demand from U.S. clients following the U.S.-China trade talks [1][2] - The company is focusing on maintaining its U.S. market share, which previously accounted for 20% of its overseas sales, while also expanding into countries along the Belt and Road Initiative [3] - The company has adapted its product designs to meet the differing preferences of international clients, such as the preference for detachable hinges in overseas markets [4] Group 1 - The company has a strong production capacity, with automated production lines actively fulfilling orders for hardware products that are shipped to various countries including the U.S., Poland, and Indonesia [1] - The company has established a significant overseas customer base, with international sales exceeding 200 million yuan, and the U.S. market currently representing about 7% of total sales [3] - The company emphasizes the importance of understanding market trends and customer needs, which has led to successful product adaptations and a robust international presence [4] Group 2 - The company has implemented innovative solutions to enhance customer service, such as creating instructional videos for product installation, which can be accessed via QR codes on product packaging [5] - The company aims to maintain a high export ratio, with foreign trade accounting for approximately 80% of its business, and plans to continue exploring new markets [5] - The company has built strong trust with its clients, which has proven beneficial during challenging times, allowing for continued production and operational resilience [5]