Summary of Aoshikan's Conference Call Company Overview - **Company**: Aoshikan - **Industry**: PCB (Printed Circuit Board) manufacturing Key Financial Metrics - **Q2 Revenue**: 1.4 billion CNY, up 19.65% YoY [2][3] - **Net Profit**: 83 million CNY, down 25.45% YoY [2][3] - **Gross Margin**: 20.91%, down 2.32% YoY [2][3] - **H1 Revenue**: 2.565 billion CNY, up 19.73% YoY [3] - **H1 Net Profit**: 196 million CNY, down 11.96% YoY [3] Core Insights and Arguments - **Profit Decline Reasons**: - Initial operational costs of the Thailand factory and high-end HDI board yield ramp-up [2][4] - Increased labor costs due to hiring high-end R&D and technical talent [4] - **Strategic Focus**: - Targeting overseas major clients like AMD and Intel, and domestic clients like Huawei and ZTE [2][5] - Enhancing production capabilities for HDI products and mSAP technology [2][5] - **Future Revenue Goals**: - Aim to achieve 10 billion CNY in revenue within three years [2][8] - Expansion of production capacity in Zhaoqing and Yiyang [5][8] Production and Capacity Expansion - **Production Capacity**: - Yiyang base: 350,000 square meters/month - Zhaoqing base: 500,000 square meters/month - Thailand factory: 120,000 square meters/month (design capacity) [5] - **Investment Plans**: - 1.8 billion CNY investment in Zhaoqing expansion, targeting high-layer and HDI products [5][16] - Anticipated investment in Yiyang not less than 1 billion CNY [19] Market Demand and Challenges - **AI Market Demand**: - Increased requirements for high-end PCBs driven by AI applications [6][7] - Ongoing expansion of high-end production capabilities to meet demand [6][7] - **Thailand Factory Challenges**: - Losses of approximately 60 million CNY in H1 2025, but losses are narrowing [12][14] - Expected to reach breakeven by November or December 2025 [12][14] Automotive Electronics Sector - **Growth Potential**: - Automotive electronics account for over one-third of revenue, with significant growth expected [13] - Expansion into electric and intelligent vehicles, with increasing PCB usage per vehicle [13] ESG Initiatives - **Sustainability Focus**: - Commitment to green manufacturing and increasing renewable energy usage [29] - Employee rights and fair working conditions emphasized, with local employment exceeding legal requirements [29] Conclusion - **Strategic Positioning**: - Aoshikan is well-positioned to capitalize on the growing demand for high-end PCBs, particularly in AI and automotive sectors, while navigating challenges in new market expansions and production ramp-ups [2][5][13][29]