Performance Review - The company reported a revenue of 31.817 billion yuan for 2025, representing a year-on-year increase of 16% [1] - Gross margin remained stable at 22.1%, while net profit attributable to shareholders reached 2.512 billion yuan, up 40% year-on-year, aligning with market expectations [1] - Key drivers for profit growth include a significant increase in thermal management revenue, which reached 1.67 billion yuan, growing over 400% year-on-year, and a 21% increase in revenue from electromagnetic drive and precision structural components [1] - The optical business also showed improvement, with gross margin rising by 5.0 percentage points to 11.5% due to an increase in high-end product sales [2] Development Trends - Despite demand fluctuations, the trend towards AI at the endpoint remains strong, with thermal management expected to continue its high growth [1] - In the second half of 2025, revenue from high-end models using VC uniform heat plates for North American clients is expected to grow several times, with the company positioned as a core supplier [1] - The company is likely to maintain a high market share due to its technological advantages and is exploring further applications of thermal management in various end products [1] Optical Product Performance - The optical business has seen continuous improvement in profitability, with gross margins increasing for five consecutive half-year periods [2] - In 2025, the company shipped nearly 15 million units of 7-piece lenses, and OIS module shipments nearly doubled, with the first large-scale shipment of periscope modules [2] - The company is optimistic about the ongoing optimization of its optical product structure and the growth potential opened by WLG [2] Strategic Acquisitions - The company has acquired a leading domestic liquid cooling manufacturer to capitalize on growth opportunities in AI computing, as well as making strides in automotive, XR, and robotics sectors [2] - Through acquisitions like PSS, the company is advancing towards a full-stack solution in automotive acoustics and has secured multiple projects for optical engines and waveguides from top clients [2] Profit Forecast and Valuation - The company anticipates a challenging global smartphone demand in 2026, leading to a 6% downward adjustment in net profit forecast to 2.684 billion yuan [2] - Revenue for 2027 is projected at 36.9 billion yuan, with net profit expected to reach 3.218 billion yuan [2] - The current stock price corresponds to a P/E ratio of 13.6x for 2026 and 11.2x for 2027, with a target price adjustment down by 23% to 47 HKD, indicating a potential upside of 37% [2]

Core Viewpoint - The company has demonstrated significant growth in revenue and profitability for the year 2024, driven by improvements in product structure and operational efficiency [2][3]. Group 1: Financial Performance - The total revenue for 2024 reached 27.328 billion RMB, representing a year-on-year increase of 33.8% [2]. - The gross margin for 2024 improved to 22.1%, up by 5.2 percentage points, attributed to product structure enhancement and ongoing cost optimization [2]. - The net profit for 2024 was 1.797 billion RMB, which is close to the upper limit of the forecast range of 1.7 to 1.815 billion RMB, marking a year-on-year increase of 142.7% [2]. Group 2: Acoustic Product Optimization - The revenue from the acoustic business for 2024 was 8.21 billion RMB, an increase of 9.5% year-on-year, with a gross margin of 30.2%, up by 1.8 percentage points [3]. - The growth in revenue was primarily due to the recovery in downstream customer demand and an increase in market share among key clients [3]. - The shipment volume of mid-to-high-end acoustic products saw a significant increase, with the SLS master-level speaker shipments growing over 120% year-on-year [3]. Group 3: Strategic Acquisitions and Collaborations - The revenue from the automotive acoustic business for 2024 was 3.52 billion RMB, with a gross margin of 24.8% [4]. - Following the acquisition of PSS, the company has integrated resources to provide a comprehensive vertical solution, leading to a strong market position among top-tier automotive brands [4]. - The optical business revenue for 2024 was 5 billion RMB, reflecting a year-on-year increase of 37.9%, with a gross margin of 6.5%, up by 19.5 percentage points [4]. Group 4: Growth in Electromagnetic and Precision Components - The total revenue for the electromagnetic transmission and precision components business in 2024 was 9.71 billion RMB, a year-on-year increase of 17.8%, with a gross margin of 23.3%, up by 3.2 percentage points [5]. - The shipment volume of X-axis linear motors increased by 15.5% year-on-year, and revenue from Android motor module products grew by 36.6% [5]. - The company has also seen significant growth in the revenue from metal frames and laptop shells, with increases of nearly 24% and 53.3% year-on-year, respectively [5]. Group 5: Robotics Sector Focus - The company is strategically focusing on the robotics sector, particularly on dexterous hand system-level solutions [6][8]. - It is actively developing components such as dexterous hands, linear actuators, and hollow cup motors, aiming to create an integrated capability that includes parts, system-level modules, and software algorithms [8].