Summary of Conference Call Notes Industry Overview - **Industry**: China Auto Supply Chain - **Emerging Fields**: The auto supply chain is diversifying into areas such as humanoid robotics, AI server liquid cooling, and AR/AI glasses, indicating a significant shift in focus and investment opportunities [2][5] Key Companies and Developments 1. **Kedali** - **New Application**: Expanded the application of battery structural parts from electric vehicles (EV) to AI glasses - **Pricing**: Custom-shaped battery structural parts for AI glasses command a higher price, valued at over Rmb10 per pair - **Revenue Potential**: Expected significant increase in shipments in 2026, potentially generating a few hundred million Rmb in revenue [3][5] 2. **Shuanghuan** - **Product Expansion**: Extending the application of its intelligent actuator into AR/AI glasses - **Functionality**: The actuator will be used for focusing adjustment modules, meeting requirements for both linear and rotational adjustments - **Engagement**: Currently engaging with leading AR/AI glasses manufacturers [4][5] Sector Implications - **Diversification**: The auto supply chain's diversification into emerging fields is expected to gradually yield returns as these sectors commercialize [5] Risks to the Sector - **Demand Fluctuations**: Potential dampening of demand for auto parts due to lower auto production - **Price Pressure**: Automakers may pass price pressures onto parts suppliers due to squeezed earnings from slowing car sales - **Competition**: Intensified competition could lead to price pressures - **Cost Inflation**: Rising raw material costs may increase auto part costs - **Consolidation Risks**: Worse-than-expected sector consolidation and product recalls due to quality issues are also concerns [8]