Summary of Conference Call for He Sheng New Material and Yi Zhi Electronics Company and Industry Overview - **Company**: He Sheng New Material - **Industry**: AI Chip and Electronics Key Points and Arguments 1. He Sheng New Material achieved steady growth through high capacity utilization and optimization of downstream customers, including Panasonic, Hitachi, LG, Samsung, and Midea, focusing on cost reduction and efficiency rather than large-scale expansion to support the long-term development of the chip industry [2][3] 2. The company strategically invested in Yi Zhi Electronics to deepen its involvement in the AI chip sector, planning to empower Yi Zhi Electronics and establish a foothold in the chip industry [2][3] 3. Yi Zhi Electronics specializes in server and CPU development, having mass-produced two generations of chips, with the third generation design nearing completion and entering the tape-out and mass production phase [2][4] 4. The CPU from Yi Zhi Electronics integrates NPU functionality, targeting three main customer categories: major telecom operators and financial institutions (Category A), leading internet companies (Category B), and inspection robots and factory AI applications (Category C), with approximately 8,000 computing nodes delivered this year for cloud gaming, cloud mobile, and video transcoding [2][4] 5. Yi Zhi Electronics has open-sourced a complete computing framework compatible with the CUDA ecosystem and major domestic GPU manufacturers, achieving compatibility with around 40 hardware and software vendors without requiring special versions [2][5][6] 6. The chips from Yi Zhi Electronics offer unique advantages in the AI inference era, integrating neural network computing with general computing to enhance data flow processing efficiency and reduce power consumption, suitable for electric vehicle factories and large-scale automation industries [2][7] 7. The third-generation product is expected to be mass-produced in 2026, with a projected performance improvement of 30% [2][7] 8. Yi Zhi Electronics' future strategy focuses on generalization and AI integration, aiming to create a broadly compatible ecosystem and develop multi-functional processors to adapt to large models and changing computing frameworks [2][8][9] 9. HiSilicon Technology plans to shift from the x86 ecosystem to the ARM ecosystem, emphasizing collaboration with Yi Zhi Electronics to support vertical applications and overall business development [2][10] 10. Yi Zhi Electronics has received three repeat orders from last year to this year, indicating strong market competitiveness and customer recognition, with further growth potential anticipated for the next year [2][11] 11. The company maintains its competitive edge through technological innovation, including self-developed NPU units and an open-source computing framework, ensuring user-friendly product compatibility [2][12][13] 12. The next-generation chip is expected to launch in mid-2026, utilizing advanced technology and targeting the high-end market [2][14] 13. Among the three customer categories (A, B, C), the internet customer segment is currently experiencing the fastest growth, prompting significant resource investment for product optimization [2][14] 14. Yi Zhi Electronics plans to continue promoting AI integrated machines while not ruling out the possibility of standalone chip sales [2][15] 15. Following the change in control, the company will increase investments in the chip industry, particularly in Yi Zhi Electronics, and will comprehensively arrange capital, talent, and strategic direction towards AI chips as a key development focus [2][16] Additional Important Information - The strategic investment in Yi Zhi Electronics reflects He Sheng New Material's commitment to transforming its business model and adapting to the evolving technology landscape [2][3][10] - The collaboration with major internet companies and telecom operators indicates a strong market presence and potential for future growth in the AI chip sector [2][4][15]

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Insights - The company is positioned as a leading player in the marketing and sales SaaS sector in China, with significant growth potential driven by AI and platform transformation [8][24]. - The marketing and sales SaaS market in China is expected to grow rapidly, with a projected market size of RMB 745 billion by 2027, reflecting a compound annual growth rate (CAGR) of approximately 29.3% from 2022 to 2027 [8][45]. - The company aims to leverage its unique position in the industry, combining vertical depth with platform capabilities, to capitalize on the growth opportunities in the SaaS market [8][24]. Summary by Sections Company Overview - The company, established in 2009, focuses on AI-driven digital marketing and sales transformation, offering a comprehensive suite of services across various industries [14]. - It has developed a robust product matrix, including key SaaS products like T Cloud and Zhenke, which cater to marketing and sales processes [17][18]. Market Potential - The Chinese marketing and sales SaaS market is characterized by low penetration rates, with only 1.3% in 2022, indicating substantial room for growth [8][47]. - The overall SaaS market in China is projected to reach RMB 1,556 billion by 2027, with a CAGR of 28.6% from 2022 to 2027 [38][45]. Financial Performance - The company is expected to achieve significant revenue growth, with projected total revenues of RMB 2.328 billion, RMB 3.053 billion, and RMB 3.926 billion for 2025, 2026, and 2027 respectively [1]. - The company is forecasted to turn profitable by 2025, with a net profit of RMB 646 million, marking a significant turnaround from previous losses [24]. AI and Platform Transformation - The integration of AI into the company's platform strategy is expected to enhance its service offerings and operational efficiency, driving customer retention and revenue growth [8][54]. - The company is transitioning from a product-centric approach to a platform and ecosystem model, which is anticipated to redefine its growth trajectory [54][58].

Summary of the Conference Call Company and Industry Overview - **Company**: 和胜新材 (He Sheng New Materials) - **Industry**: Artificial Intelligence and High-Performance Composite Materials - **Subsidiaries**: 海希技术 (Hai Xi Technology) and 易之电子 (Yi Zhi Electronics) Key Points and Arguments 1. **Investment in AI**: 和胜新材 has invested in 海希技术 to enter the AI sector, focusing on domestic AI chips and providing servers and AI integrated machines for intelligent computing centers. Clients include major internet companies like ByteDance and Tencent [2][3] 2. **Market Demand**: The market shows significant demand for domestic AI integrated machines, with the price for the DeepThink 六七 1 full version hardware deployment ranging from 2.5 million to 5 million yuan [2][5] 3. **Strategic Partnerships**: 海希技术 has a two-year agreement with 图耀 (Tu Yao) to deliver 800 AI integrated machines, having already procured 80 units [2][5] 4. **Investment in 易之电子**: 和胜新材's investment in 易之电子 aims to reduce costs and enhance market competitiveness, focusing on ARM and RISC-V architecture chips [2][6] 5. **Product Performance**: 易之电子's TF7,000 chip, based on ARM A8 architecture and 7nm process, is favored for its cost-effectiveness and low energy consumption, already supplying to Tencent Games and undergoing tests with ByteDance [2][7][9] 6. **Domestic Replacement Progress**: The pace of domestic replacement has accelerated, with 海希技术 adapting to most suppliers, including R1 and V3 versions, showing faster-than-expected progress [2][11] 7. **AI Model Development**: The DeepSeek model has driven the development of domestic large models, with applications rapidly expanding in downstream industries [2][5] 8. **Cost Sensitivity**: The adoption of integrated machines by internet giants is influenced by cost sensitivity, with 和胜新材's DeepSeek model offering a competitive price advantage [2][10] 9. **Energy Efficiency**: The Manycore 64 deep neural network accelerator box developed by 易之电子 shows energy efficiency advantages, particularly in lightweight models, achieving over 83% efficiency compared to mainstream GPUs like NVIDIA's A100 and H100 [2][12] 10. **Adaptation to Domestic Ecosystem**: The GPU from 易之电子 demonstrates high adaptation efficiency with the Deepseek21 large model, supporting the domestic ecosystem migration [2][13][14] Additional Important Information - **Company Background**: 和胜新材, established in 2002 and listed in 2009, is a leading supplier of high-performance composite materials, focusing on innovative material research and market expansion [3] - **Future Outlook**: The company is optimistic about the overall market scale and growth potential in both traditional and AI-related sectors, supported by favorable industry policies [3][10]

Investment Rating - The report maintains a "Buy" rating for Lenovo Group (00992.HK) [1] Core Views - Lenovo Group is expected to benefit from the development of AI, with all three major business segments showing comprehensive growth [1][7] - The company achieved a revenue of 69.08 billion USD for FY2025, representing a year-on-year increase of 21.4%, and a net profit of 1.38 billion USD, up 37.0% year-on-year [7] - The report anticipates continued growth in net profit, with projections for FY2026 and FY2027 being adjusted upwards to 1.60 billion USD and 1.76 billion USD respectively [1][7] Financial Performance Summary - **Revenue Forecasts**: - FY2024A: 56.90 billion USD - FY2025A: 69.08 billion USD - FY2026E: 74.18 billion USD - FY2027E: 79.56 billion USD - FY2028E: 84.26 billion USD - Year-on-year growth rates for FY2025A and FY2026E are 21.41% and 7.38% respectively [1][8] - **Net Profit Forecasts**: - FY2024A: 1.01 billion USD - FY2025A: 1.38 billion USD - FY2026E: 1.60 billion USD - FY2027E: 1.76 billion USD - FY2028E: 1.97 billion USD - Year-on-year growth rates for FY2025A and FY2026E are 37.01% and 15.23% respectively [1][8] - **Earnings Per Share (EPS)**: - FY2025A: 0.11 USD - FY2026E: 0.13 USD - FY2027E: 0.14 USD - FY2028E: 0.16 USD [1][8] - **Price-to-Earnings (P/E) Ratios**: - FY2025A: 10.70 - FY2026E: 9.28 - FY2027E: 8.42 - FY2028E: 7.53 [1][8] Business Segment Insights - **Intelligent Devices Group (IDG)**: - Revenue for the fourth fiscal quarter reached 11.81 billion USD, a year-on-year increase of 12.9% [7] - PC market share increased to 23.8%, with AIPC penetration expected to reach around 25% by 2025 [7] - **Infrastructure Solutions Group (ISG)**: - Revenue for the fourth fiscal quarter was 4.12 billion USD, up 62.6% year-on-year [7] - Continuous profitability over two quarters, driven by increased server orders [7] - **Solutions and Services Group (SSG)**: - Revenue for the fourth fiscal quarter was 2.15 billion USD, a year-on-year increase of 18.1% [7] - Significant growth in hybrid cloud service orders, with an 82% year-on-year increase [7]

Key Insights - The report highlights the significant growth in the renewable energy sector, particularly in wind and solar power, with cumulative installed capacity surpassing thermal power for the first time [5][6] - The performance of various companies in the renewable energy and materials sectors shows strong revenue growth and improved profitability, indicating a positive trend in these industries [7][11][14][20][23] Industry Commentary - The new materials sector has seen a weekly increase, with the new materials index rising by 3.51%, while specific segments like industrial gases and battery chemicals have also shown strong performance [5] - Wind and solar power installations reached a total of 1.482 billion kilowatts, with wind power at 536 million kilowatts and solar power at 946 million kilowatts, marking a significant milestone in the energy transition [5] - The report predicts that annual new installations of wind power will exceed 100 million kilowatts starting in 2025, entering a new era of renewable energy growth in China [5] Company Analysis - **Sungrow Power Supply Co., Ltd. (300274.SZ)**: The company reported a revenue of 77.86 billion yuan for 2024, a year-on-year increase of 7.8%, and a net profit of 11.04 billion yuan, up 16.9%. In Q1 2025, revenue reached 19.04 billion yuan, a 50.9% increase year-on-year [7][9] - **Sailun Tire (601058.SH)**: The company achieved a total revenue of 31.802 billion yuan in 2024, a 22.42% increase, with a net profit of 4.063 billion yuan, up 31.42%. In Q1 2025, revenue was 8.411 billion yuan, reflecting a 15.29% increase [11][12] - **Hengli Hydraulic (601100.SH)**: The company reported a revenue of 9.39 billion yuan in 2024, a 4.51% increase, with a net profit of 2.509 billion yuan, up 0.4%. The Q1 2025 revenue was 2.422 billion yuan, a 2.56% increase year-on-year [14][16] - **Zhaowei Electromechanical (003021.SZ)**: The company reported a revenue of 1.525 billion yuan in 2024, a 26.42% increase, with a net profit of 225 million yuan, up 25.11%. In Q1 2025, revenue was 368 million yuan, a 17.66% increase [20] - **Tianwei Technology (688116.SH)**: The company achieved a revenue of 1.45 billion yuan in 2024, a 3.1% increase, with a net profit of 250 million yuan, down 15.8%. In Q1 2025, revenue was 330 million yuan, a 9% increase [23][24] Investment Recommendations - The report suggests a focus on companies within the wind and solar energy sectors, as they are expected to benefit from the ongoing transition to renewable energy and the increasing demand for sustainable solutions [5][7] - Companies like Sungrow and Sailun Tire are highlighted for their strong growth trajectories and market positions, making them attractive investment opportunities [7][11]

Core Viewpoint - Dingjie Smart achieved a revenue of 2.331 billion yuan in 2024, a year-on-year increase of 4.6%, and a net profit attributable to shareholders of 156 million yuan, up 3.6% year-on-year [1] Group 1: Financial Performance - In Q1 2025, the company reported a revenue of 423 million yuan, a year-on-year increase of 4.3%, but a net loss attributable to shareholders of 8.33 million yuan, an increase of 14% year-on-year [1] - The revenue from mainland China and non-mainland regions in 2024 was 1.177 billion yuan and 1.154 billion yuan, respectively, with growth rates of 1.9% and 7.5% [1] - In Q1 2025, revenue from mainland China was 175 million yuan, a year-on-year increase of 6.5%, while non-mainland revenue was 249 million yuan, a year-on-year increase of 2.9% [1] Group 2: Business Growth - The R&D design and AIoT sectors continued to grow rapidly in 2024, with revenues of 1.189 billion yuan, 334 million yuan, 152 million yuan, and 631 million yuan, reflecting growth rates of -1.4%, 0.2%, 23.3%, and 22% respectively [2] - The PLM sector saw a 30% increase in average transaction value due to deep integration of AI with business scenarios [4] - The company is leveraging its Athena platform and integrating various AI capabilities to enhance its product offerings and operational efficiency [4] Group 3: Future Outlook - Revenue projections for Dingjie Smart from 2025 to 2027 are 2.569 billion yuan, 2.817 billion yuan, and 3.057 billion yuan, with net profits of 202 million yuan, 251 million yuan, and 293 million yuan respectively [4] - The company is expected to benefit from the resilience of its operations and the opportunities presented by AI advancements [4]

Summary of the Conference Call for Zhengyuan Wisdom Company Overview - **Company**: Zhengyuan Wisdom - **Industry**: AI Large Model Applications in Education Key Points and Arguments AI Large Model Development - Zhengyuan Wisdom initiated AI large model applications after the release of ChatGPT 3.5 in June 2023, with a focus on higher education institutions [3] - The company provided AI large model applications for Lanzhou University, which will officially launch on March 15, 2024, marking it as the first application in a domestic 985 university [3] - The actual user count for Lanzhou University and Northwest Normal University exceeds 40,000 and 30,000 respectively [3] Data Security and Privacy Concerns - High education institutions have stringent data security and privacy requirements, preferring localized deployments over public cloud solutions [4][5] - Over 98% of the educational institutions contacted are unwilling to adopt public cloud models, emphasizing the need for localized deployment of AI large models [5] Computational Resources in Higher Education - Universities face a shortage of computational resources, with existing resources primarily allocated to specialized teams, leaving little for digital campus initiatives [6] - Zhengyuan Wisdom optimized its technology to run AI large models on mid-range computational power, keeping costs under 1 million RMB, which is lower than HRS integrated machine costs [4][6] Collaboration with Huawei - Zhengyuan Wisdom has established a deep collaboration with Huawei, launching a smart campus solution that received awards and technical certification [4][8] - The partnership includes joint seminars and the release of the Zhengyuan Wisdom Campus Service Large Model, which is recommended by Huawei's enterprise solutions club [8] AI Integrated Machine Development - The company plans to enhance existing products with AI large models and collaborate with Huawei to develop AI integrated machines for localized deployment [10] - AI integrated machines are categorized into basic computational types and those including industry applications, with costs ranging from 1.3 million to 1.5 million RMB for NVIDIA H20 series nodes [12] Market Demand and Budgeting - The education sector has a rigid demand for AI applications, with a total budget of approximately 350 million RMB for applications across multiple universities [4][21] - The average budget for AI applications in universities is around 10 million RMB, indicating a vast market potential with over 3,000 universities in China [22][23] Application Scenarios and Efficiency - AI large models are expected to enhance various educational functions, including teaching assistance, administrative management, and logistics services [14][25] - The implementation of AI can lead to significant cost reductions and efficiency improvements, as evidenced by successful case studies in universities [25] Challenges in Information Technology Construction - The current phase of information technology construction in universities faces siloed applications, making it difficult for users to find specific functionalities [26] - Recommendations include integrating applications into a single platform to improve efficiency and user experience [26] Future Directions and Strategic Goals - Zhengyuan Wisdom aims to transition from a single application model to a platform-based, integrated, and digital transformation approach [30] - The company aspires to become a leading brand in digital logistics and campus digital services within the education sector [30] Additional Important Insights - The company is focusing on practical delivery capabilities and maintaining transparent communication with clients to ensure project success [20] - The impact of tightened bank investments in educational information technology in 2024 has led to a shift towards self-funded projects by universities [28][29]