Summary of Huada Jiutian Conference Call Company and Industry Overview - **Company**: Huada Jiutian - **Industry**: Electronic Design Automation (EDA) Key Points and Arguments - **Acquisition of Newhe Semiconductor**: Huada Jiutian acquired 100% of Newhe Semiconductor through a combination of cash and stock issuance, which is expected to enhance its competitive edge in the EDA market, particularly in system-level simulation for chips [3][4] - **Market Positioning**: The acquisition marks the beginning of a large-scale merger and acquisition cycle for Huada Jiutian, aimed at addressing its development gaps as the only EDA platform in China [3][4] - **Technological Trends**: The integrated circuit design is entering a post-Moore's Law era, where advanced packaging is crucial for increasing chip integration. Multi-physical field simulation technology is becoming essential in EDA tools to address challenges posed by chip integration [5][6] - **Challenges in SOC Design**: Huada Jiutian faces significant challenges in SOC design and chip manufacturing, including complex function decomposition, inter-chip connectivity, and advanced packaging issues [9] - **Market Growth Potential**: The domestic EDA market is projected to reach 16 billion RMB by 2030, with Huada Jiutian's localization rate expected to increase to 50%-70%, indicating a potential market capitalization of over 100 billion RMB [3][15] - **IP Business Development**: Huada Jiutian has the potential to develop its IP business, especially after establishing a leading position in the digital EDA market, which could become a new growth driver [3][16] - **Valuation Logic**: The high valuation of Huada Jiutian is supported by its strong market position and growth potential, with a projected PS ratio of 15-20 times based on future market conditions [11][14] - **Future M&A Plans**: The acquisition of Newhe Semiconductor signals the start of a broader M&A strategy, aimed at enhancing key capabilities and achieving a market valuation of 100 billion RMB [17] Additional Important Insights - **Collaboration with International Giants**: Huada Jiutian has partnered with international companies like Xindasi to launch a comprehensive 3D advanced packaging design analysis EDA platform, reinforcing its industry leadership [7][8] - **Technological Achievements**: The company has received national awards for its technological advancements, further solidifying its position in the domestic EDA industry [8] - **Impact of US-China Relations**: The current geopolitical climate is influencing market liquidity and sentiment, which in turn affects Huada Jiutian's revenue growth [12] This summary encapsulates the critical insights from the conference call, highlighting Huada Jiutian's strategic moves, market positioning, and future growth potential within the EDA industry.