Summary of Xingsen Technology Conference Call Company Overview - **Company**: Xingsen Technology - **Industry**: PCB (Printed Circuit Board) and Substrate Manufacturing Key Points and Arguments Business Expansion and Production Capacity - Xingsen Technology enhanced its production capacity for HDI (High-Density Interconnect) and SLP (Semi-Laminated Process) boards through the acquisition of the Xingfei factory, laying the foundation for higher-end mSAP (Modified Semi-Additive Process) and SRP (Semi-Rigid PCB) production, thus improving overall competitiveness [2][3] - The company is actively expanding its product offerings to overseas core computing power customers, capitalizing on the tight supply-demand situation in the high-end PCB market [3] Technological Advantages - Xingsen Technology has accumulated significant experience in producing IC substrates, allowing it to leverage this capability to produce advanced HDI products [4] - The company possesses the technical potential to enter the COWOP (Chip-on-Wafer-on-Panel) packaging field, which requires stringent production standards [4] Market Trends and Financial Performance - In Q2 2025, the BT substrate market is expected to see price increases of 10%-20% due to rising demand in the storage market, potentially boosting gross margins by 14-15 percentage points and contributing over 100 million yuan in profit [2][13] - The AI market's growth is driving increased demand for high-end PCBs, with expectations of reduced losses at the Yixing factory and significant profit elasticity from overseas collaborations [2][13] Revenue Growth Projections - For 2025, Xingsen anticipates continued growth in its small-batch business, with Yixing expected to significantly reduce losses. The Bilibili business is projected to grow over 20%, and semiconductor test boards are expected to maintain a 30% compound annual growth rate [15] - The company expects to turn losses into profits in the Zhuhai BT substrate segment, with last year's losses of approximately 70 million yuan expected to be reversed this year [15] Strategic Collaborations - Collaborations with overseas major clients are crucial for Xingsen's development, providing significant profit elasticity and the potential to attract more clients, thus transforming the company's customer and product structure [14] Future Outlook - The company is optimistic about its profitability in 2026, with the effects of BT substrate price increases expected to manifest throughout the year, alongside collaborations with Yixing and potential overseas clients [16] Additional Important Insights - The substrate market is currently dominated by Japanese, Korean, and Taiwanese manufacturers, with Xingsen and Shenzhen Deep South Circuit holding a combined market share of only about 5% [11][12] - The global market for substrates is approximately 20 billion USD, with significant barriers to entry due to high investment requirements and stringent supplier certification processes [11]

Investment Rating - The report maintains an "Overweight" rating for the basic chemical industry [1] Core Viewpoints - DuPont is under antitrust investigation in China, which is expected to benefit domestic alternatives in semiconductor materials and ion exchange membranes [3][6] - DuPont's major growth areas include electronics and water treatment, with a significant portion of sales coming from the Asia-Pacific region [4] - The investigation may accelerate the domestic substitution process for ion exchange resins, particularly in industrial water treatment [6] - The U.S. has imposed "reciprocal tariffs," which may further promote the domestic substitution of new materials [7] - Investment suggestions include focusing on leading companies in ion exchange resins and semiconductor materials [8] Summary by Sections Industry Overview - DuPont's sales in FY2023 reached $12.1 billion, with the Asia-Pacific region accounting for 43% of total sales [4] - The company plans to spin off its electronics business by November 2025 [4] Business Segments - DuPont's semiconductor solutions generated approximately $1.9 billion in sales, representing 15.7% of total sales, with 80% of this revenue from the Asia-Pacific region [5] - The water treatment and protection business achieved sales of $5.6 billion in 2023, with a slight decline expected in 2024 [6] Market Impact - The antitrust investigation is seen as a catalyst for accelerating the domestic production of ion exchange resins, benefiting companies like Bluestar Technology and Zhengguang Co. [6] - The introduction of higher tariffs on U.S. imports is expected to make domestic new materials more competitive [7]