Core Viewpoint - The report from Cinda Securities indicates that ChenZhan Optoelectronics achieved a net profit attributable to shareholders of 112 million yuan in the first half of 2025, representing a year-on-year decrease of 13.85% [1] Group 1: Company Overview - ChenZhan Optoelectronics is a provider of commercial human-machine interaction intelligent terminal solutions, with product offerings including touch all-in-one machines, touch displays, various smart self-service terminals, and embedded modules [1] - The company's ODM business model provides customized products and services to global clients, covering product design, hardware and software selection, manufacturing, and validation [1] Group 2: Business Development - Following the acquisition of MicroTouch™ in 2020, the company has been developing its own brand and has gradually established and improved its agent channels globally, leading to increased brand recognition [1] - MicroTouch™ is now independently developing under an overseas subsidiary model, enhancing the synergy with the group [1] Group 3: Strategic Partnerships - The company has invested in Hongtong Technology to enter the smart cockpit business, which has been providing high-quality touch display assembly solutions to automotive manufacturers in Europe, America, and China since 2017, demonstrating strong competitiveness in the mid-to-high-end market [1] - A partnership with Satogate has been established to explore new scenarios for encrypted payments [1]

Group 1: Company Performance - In 2024, the company achieved revenue of 2.214 billion CNY, a year-on-year increase of 31.76% [3] - The net profit attributable to shareholders was 188 million CNY, up 18.16% year-on-year [3] - Growth driven by strong demand from European clients, expansion of MicroTouch™ brand, and new products from subsidiary Hongtong Technology entering mass production [3] Group 2: Strategic Plans for 2025 - Focus on three main business segments: ODM, MicroTouch™ brand, and smart cockpit, with strategic adjustments for collaborative development [3] - Continuous improvement of the global manufacturing system to enhance core competitiveness [3] - Ongoing enhancement of core technology R&D capabilities [3] - Development of an efficient global team to expand and maintain global customer relationships [3] Group 3: Impact of Tariffs and Trade - Current tariff rates for exports to the U.S. are between 20-30% due to recent adjustments [4] - Limited short-term impact on business due to product exemptions in the U.S. customs list, but potential long-term benefits if tariff policies stabilize [4] Group 4: Factory Developments - The Thailand factory achieved mass production in 2024, establishing a dual factory layout for smart cockpit business [5] - Plans to expand production capacity in Thailand with new assembly lines to enhance supply chain resilience [5] Group 5: Market Expansion and Product Strategy - The company is evaluating the possibility of establishing factories in Europe and the U.S. to mitigate geopolitical risks [6] - As of the end of 2024, the smart cockpit industry application increased to 30%, while retail remains the largest sector at over 40% [7] - Sufficient orders on hand for Q2 2025, with management aiming to meet revenue targets despite challenges [8] Group 6: MicroTouch Brand Development - In 2025, the focus will shift from channel construction to product development, enhancing product design capabilities to increase market share and brand value [9] Group 7: Automotive Display Business - Multiple vehicle models will enter mass production in 2025, targeting both new energy vehicles and traditional car manufacturers [10] - Strategies to improve gross margins in the automotive display sector include new customer acquisition and optimizing product structure [11]

Investment Rating - The investment rating for the company is "Buy" [4]. Core Insights - The company's revenue for 2024 reached 2.214 billion, a year-on-year increase of 31.76%, while the net profit attributable to the parent company was 188 million, up 18.16% year-on-year [1][2]. - The decline in net profit for Q1 2025 was attributed to a decrease in revenue and profit margins, with a 3% year-on-year drop in revenue to 622 million and a 23.90% decrease in net profit to 50 million [1][2]. - The company's gross margin slightly decreased to 23.57% in 2024, down 1.97 percentage points year-on-year, and 21.21% in Q1 2025, down 2.63 percentage points year-on-year [3]. Revenue and Profit Analysis - The revenue growth in 2024 was driven by strong demand from European clients, expansion of the MicroTouch brand, and new product launches from the subsidiary Hongtong Technology [2]. - The company expects revenue for 2025 and 2026 to be 2.750 billion and 3.338 billion respectively, with projected year-on-year growth rates of 24.2% and 21.4% [8][10]. Business Segments - The company operates in three main segments: ODM, proprietary brands, and smart cockpit solutions, all of which are developing synergistically [4][7]. - The ODM business focuses on increasing market penetration among top European and American clients, while the MicroTouch brand has seen increased revenue contributions due to enhanced brand recognition and independent operations [4][7]. - The smart cockpit business has been strengthened through the acquisition of Hongtong Technology, which provides competitive touch display solutions for mid-to-high-end markets [7]. Financial Forecast - The forecast for 2025-2027 includes expected revenues of 2.750 billion, 3.338 billion, and 4.007 billion respectively, with corresponding net profits of 240 million, 288 million, and 339 million [8][10]. - The earnings per share (EPS) are projected to be 1.37, 1.65, and 1.94 for 2025, 2026, and 2027 respectively, indicating a positive growth trajectory [8][10].