Core Viewpoint - The report highlights the significant growth in revenue and profit for Actions Technology Co., Ltd. in the first half of 2025, driven by the successful commercialization of AI audio chips and the increasing demand for low-latency wireless audio products [1][5]. Financial Performance - The company achieved operating revenue of approximately 449.12 million yuan, representing a year-on-year increase of 60.12% [4]. - The total profit reached approximately 91.72 million yuan, a 123.38% increase compared to the same period last year [4]. - The net profit attributable to shareholders was approximately 91.38 million yuan, reflecting a 123.19% year-on-year growth [4]. - Basic earnings per share were 0.53 yuan, up 120.83% from the previous year [5]. Business Overview - Actions Technology specializes in the design and sale of mid-to-high-end AIoT chips, focusing on wireless audio, smart wearables, and intelligent interaction [8][11]. - The company has successfully launched the ATS323X series of low-latency high-quality wireless audio chips, marking a significant step in the commercialization of in-memory computing technology [8][18]. - The product portfolio includes smart wireless audio SoC chips, edge AI processor chips, and portable audio-video SoC chips [8][9]. Market Position and Strategy - The company is positioned as a leading low-power AIoT chip designer in China, with a focus on integrating AI technology into audio applications [8][11]. - Actions Technology employs a Fabless business model, outsourcing manufacturing and testing while focusing on chip design and development [9][10]. - The company has established partnerships with major audio brands, enhancing its market presence and product penetration [18][19]. Industry Context - The semiconductor industry is experiencing rapid growth, with global sales projected to reach 627.6 billion USD in 2024, marking a 19.1% increase [12]. - The demand for AI capabilities in edge devices is rising, particularly in battery-powered applications, creating opportunities for high-efficiency AI chips [13][14]. - The development of private communication protocols is addressing the limitations of standard protocols in low-latency scenarios, further driving innovation in the audio technology sector [15][16].

Investment Rating - The report gives a "Strong Buy" rating for the company, Yuchip Technology (688049), with a target price of 76.84 CNY based on a 65x PE for 2025 [2][11]. Core Viewpoints - Yuchip Technology is a leading domestic low-power AIoT chip design manufacturer, focusing on the mid-to-high-end smart audio SoC sector. The company has established itself as a mainstream supplier in the Bluetooth speaker SoC market and is expanding into wireless microphones, home theaters, and wearable products [8][9][11]. - The company is expected to achieve significant revenue and profit growth in 2024 and 2025, driven by an increase in market share and the launch of new products. The projected revenue for 2024 is 652 million CNY, with a year-on-year growth of 25.3%, and a net profit of 107 million CNY, reflecting a year-on-year increase of 63.8% [2][30]. Company Overview - Yuchip Technology specializes in the research, design, and sales of mid-to-high-end smart audio SoC chips, with applications in various products such as Bluetooth speakers, smart wearables, and AIoT devices. The company has a diverse product matrix that includes smart wireless audio SoC chips, low-latency high-quality audio SoC chips, smart wearable SoC chips, and edge AI processor chips [19][20]. - The company has a stable and concentrated shareholding structure, with the controlling shareholder being the Taiwan Yeh family, ensuring consistent decision-making and strategic direction [24][26]. Financial Performance - The company is projected to achieve a net profit of 173 million CNY in 2025, 235 million CNY in 2026, and 317 million CNY in 2027, indicating strong growth potential [2][11]. - The revenue from the wireless audio SoC chip segment is the largest contributor to the company's income, accounting for over 74% of total revenue in recent years. The gross margin for this segment has been increasing, reaching 48.94% in 2024 [34][35]. Industry Analysis - The Bluetooth technology upgrade is driving the expansion of application scenarios, with the market for smart audio SoC chips expected to grow significantly. The structural recovery of the Bluetooth speaker market and innovations in wearable products are anticipated to further boost demand [10][11]. - The company is well-positioned to benefit from the ongoing energy efficiency revolution, with its innovative CIM architecture addressing the challenges of traditional computing structures. This positions Yuchip Technology as a leader in the low-power edge AI market [9][10].

Audit Opinion - The audit report states that the financial statements of Juchip Technology Co., Ltd. fairly reflect its financial position as of December 31, 2024, and its operating results and cash flows for the year 2024 [2][3]. Revenue Recognition - Juchip Technology's revenue for 2024 was RMB 651,875,446.08, with the smart wireless audio SoC chip series contributing RMB 486,274,023.59, accounting for 74.60% of total revenue. The portable audio-video SoC chip series and edge AI processor chip series contributed 12.70% and 12.58% respectively [3][4]. - Revenue recognition is identified as a key audit matter due to the inherent risk of management potentially using inappropriate revenue recognition practices to meet specific targets [3][4]. Inventory Valuation - As of December 31, 2024, Juchip Technology's inventory balance was significant, and the net realizable value of inventory is determined based on estimated selling prices minus estimated costs to complete and sell [5][24]. - The determination of the net realizable value of inventory is also classified as a key audit matter due to the significant management judgment involved [5][24]. Company Overview - Juchip Technology Co., Ltd. was established on June 5, 2014, and is headquartered in Zhuhai, Guangdong Province. The company specializes in the research, production, and sales of mid-to-high-end smart audio SoC chips [9][11]. - The company has a registered capital of RMB 146,136,404 and is publicly traded on the Shanghai Stock Exchange since November 29, 2021 [9][11]. Financial Reporting Basis - The financial statements are prepared based on the assumption of going concern, indicating that the company does not have significant doubts about its ability to continue operations for the next 12 months [11][12]. Key Accounting Policies - The company adheres to the relevant accounting standards and has established specific accounting policies for financial instruments, inventory, fixed assets, and revenue recognition [11][12][13].