Core Viewpoint - The development of China's SiC (Silicon Carbide) power semiconductor industry reflects a common path for Chinese semiconductor companies, focusing on IDM (Integrated Device Manufacturer) models to break through barriers, leveraging cost advantages to capture market share, and using capital endurance to gain technological time windows. Despite short-term pains such as losses and price wars, the long-term value is evident as the penetration of SiC in the renewable energy sector continues to rise, positioning leading Chinese SiC companies to dominate the global industry chain restructuring [1][24]. Group 1: Industry Milestones - The strategic adaptation of the Hong Kong Stock Exchange's Chapter 18C rules facilitates the listing of specialized technology companies, easing profitability requirements and emphasizing technological barriers and commercialization potential. Chinese SiC companies have achieved full-scale production across the entire SiC IDM value chain [6]. - Revenue for Chinese SiC power semiconductor companies is projected to grow significantly, with a CAGR of 59.9% from 2022 to 2024, while R&D investment exceeds 30% of revenue, indicating a focus on capacity expansion despite initial losses [8]. - The gross margin for Chinese SiC companies is improving, with the loss rate narrowing from -48.6% in 2022 to -9.7% in 2024, reflecting initial scale effects and cost optimization in automotive-grade modules [8]. Group 2: Capacity and Market Penetration - The capacity utilization rates for Chinese SiC packaging plants are low, with only 52.6% in Wuxi and 45.2% in Shenzhen, yet companies plan to invest 620 million yuan to expand facilities, highlighting a competitive logic of "capacity first" to seize automotive orders [9]. - Chinese SiC companies hold 163 patents and 122 applications, with core products certified for automotive standards, achieving reliability benchmarks comparable to international standards [17]. - The IDM model adopted by Chinese SiC companies integrates design, manufacturing, and testing, reducing supply chain risks and accelerating product iteration, with significant design wins across multiple automotive models [18]. Group 3: Downstream Drivers and Domestic Substitution - The global demand for SiC is heavily driven by the electric vehicle sector, which accounts for 70% of the market, with Chinese companies leveraging cost advantages to capture market share from foreign competitors [19]. - The share of Chinese SiC power modules is expected to increase significantly, especially in the context of market restructuring following the bankruptcy of Wolfspeed, allowing local manufacturers to fill mid-range market gaps [19]. Group 4: Future Trends - The capital-driven technological iteration is evident in the ongoing R&D and expansion of 8-inch wafer production, reflecting market expectations for a technological turning point [21]. - Leading Chinese SiC companies are evolving from single-device offerings to integrated solutions that include modules, driver ICs, and simulation services, thereby lowering design barriers for customers [22]. - To address tariff barriers, Chinese companies are establishing localized supply chains through acquisitions in Europe and setting up manufacturing centers in Southeast Asia, creating a "localized + globalized" supply chain strategy [23].

Group 1: Company Value Management - The company emphasizes value management through improving operational performance and effective communication with investors [2][3] - Measures include share buybacks, equity incentive plans, and maintaining good communication with the market to balance company value and market capitalization [3] Group 2: Accounts Receivable Management - The company has implemented a three-pronged approach to manage accounts receivable: pre-collection, during collection, and post-collection [3][12] - As of 2024, the company has achieved four consecutive years of positive operating cash flow [3] Group 3: Financial Performance - The company reported improved financial conditions in Q1 2025, with ongoing positive trends [4] - R&D expenses in 2024 amounted to 242 million CNY, representing 17.05% of revenue, indicating a commitment to maintaining technological leadership [12][13] Group 4: Product Applications and Collaborations - The company provides automotive communication products for various Geely models, including T-BOX and OBD, and has successfully integrated 5G products into Geely's high-end electric vehicles [5][9] - The company has shipped over 15 million electric vehicle digital number plates, indicating a strong presence in the digital management of electric bicycles [8] Group 5: Market Expansion and Challenges - The company has seen a 15.28% year-on-year increase in overseas revenue, reaching 219 million CNY in 2024 [9] - The company is actively exploring solutions to mitigate the impact of increased tariffs due to the US-China trade tensions, as its export business to the US is relatively small [10] Group 6: Governance and Shareholder Engagement - Independent directors are committed to protecting minority shareholders' interests through active communication and compliance with regulations [11] - The company has taken measures to improve performance after three consecutive years of losses, focusing on high-margin overseas markets and efficient cash flow management [11][12]