Investment Rating - The investment rating for the company is "Buy" and is maintained [8] Core Views - In the first half of 2025, the company achieved revenue of 1.938 billion yuan, a year-on-year increase of 26.58%, and a net profit attributable to shareholders of 305 million yuan, a year-on-year increase of 106.45% [2][6] - In the second quarter of 2025, the company reported revenue of 944 million yuan, a year-on-year increase of 7.48% but a quarter-on-quarter decrease of 5.09%, with a net profit of 114 million yuan, a year-on-year decrease of 4.79% and a quarter-on-quarter decrease of 40.02% [2][6] - The company has successfully expanded its market share through its leading technology and quality customer service, with rapid growth in the 2800 series chips widely used in TWS headphones, smartwatches, and glasses [12] Summary by Sections Financial Performance - For the first half of 2025, the company reported a gross margin of 39.3%, an increase of 6.1 percentage points year-on-year [12] - The second quarter's gross margin was 40.12%, up 6.73 percentage points year-on-year and 1.65 percentage points quarter-on-quarter, driven by the continued ramp-up of the 2800 series products [12] Product Development and Market Expansion - The company has introduced new clients such as Xiaotianzai and Songtu, achieving mass production in the smartwatch chip segment, with significant growth in shipments [12] - The company is focusing on expanding into markets for smart glasses and wireless microphones, with successful mass production of the 2700 and 2800 series chips [12] Research and Development - In the first half of 2025, the company's R&D expenses were 395 million yuan, a year-on-year increase of 22.77%, with an R&D expense ratio of 20.37% [12] - The BES2800 series offers multiple advantages such as low latency and low power consumption, applicable across various devices including headphones, smartwatches, and glasses [12] Future Outlook - The company is expected to see continued growth in net profit, with projections of 796 million yuan, 1.187 billion yuan, and 1.711 billion yuan for 2025, 2026, and 2027 respectively, corresponding to EPS of 4.73, 7.05, and 10.16 yuan [12]

Core Viewpoint - The company reported record-high revenues and profits for 2024 and Q1 2025, driven by strong performance in smart wearable chips and a diversified revenue structure [1][2]. Financial Performance - In 2024, the company achieved revenue of 3.263 billion yuan, a year-on-year increase of 49.94%, and a net profit attributable to shareholders of 460 million yuan, up 272.47% [1]. - For Q1 2025, revenue reached 995 million yuan, reflecting a year-on-year growth of 52.25% and a quarter-on-quarter increase of 25.88%, with a net profit of 191 million yuan, up 590.22% year-on-year [1]. Product and Market Development - The company’s revenue from smart watch/wristband chips grew by 116% in 2024, contributing significantly to overall revenue growth, with total shipments exceeding 40 million units [2]. - The revenue structure became more diversified, with Bluetooth audio chips accounting for approximately 62% and smart wearable chips for about 32% of total revenue [2]. - Continuous upgrades in wearable terminal applications have led to increased customer demands for main control chips, prompting the company to launch new products like BES2800 and BES2700 series chips [2]. Research and Development - The company maintained high R&D investment, with expenses reaching 617 million yuan in 2024, a 12.27% increase year-on-year [3]. - The company is enhancing its technology layout in Wi-Fi, NPU, and ISP, with low-power, high-performance NPU and ISP systems already in mass production [3]. Strategic Positioning - The company is positioned to capitalize on the growing trend of edge AI, with a focus on developing ultra-low-power computing SoC chips and maintaining close collaboration with premium clients [4]. - The launch of new products like MYVU AR smart glasses and Ola Friend AI smart earphones indicates the company's commitment to innovation and market leadership [4]. Investment Outlook - The company is projected to achieve revenues of 4.920 billion yuan, 6.315 billion yuan, and 7.557 billion yuan for 2025, 2026, and 2027 respectively, with net profits of 923 million yuan, 1.304 billion yuan, and 1.660 billion yuan [4]. - A target price of 500 yuan is set based on a 65x PE valuation for 2025, reflecting the company's leading position in the domestic smart audio SoC market [4].