Summary of the Conference Call for XGIMI Technology Company Overview - **Company**: XGIMI Technology - **Date of Call**: June 27, 2025 Key Points Industry and Market Performance - **Gross Margin**: Domestic market gross margin is approximately 30%, while overseas market gross margin has recently approached 45% [2][4] - **Market Demand**: Domestic market demand is under pressure, but profit margins are improving, and scale remains stable. Overseas markets continue to grow, with Europe generating revenue of 600 million RMB last year, growing over 40%, and the US market nearing 200 million RMB with similar growth rates [2][6] - **Japan Market**: The Japanese market has been a drag on overall overseas growth due to channel adjustments [2][6] Product Lines and Financials - **Home Products**: - Entry-level Play and Z series products have a gross margin close to 30% in the domestic market. Mid-to-high-end products like RS20 Ultra can achieve gross margins of 35% to 40% [3] - The gross margin for the K6 series has improved from about 10% to around 30% due to a 40% drop in TI DLP chip prices and design iterations [5] - **Vehicle Business**: - Focused on smart cockpits and smart headlights, with expected revenue contribution of 300 to 400 million RMB this year. The business is in the investment phase, aiming for stable profitability at around 1 billion RMB in revenue [7][16] - **Commercial Projection Business**: - Production began at the end of June, with shipments starting in July. The goal is to capture 10%-20% of the 10 billion RMB domestic commercial market [8][9] - Expected revenue of tens of millions RMB this year with a gross margin of 40%-50% [8] Strategic Developments - **LCOS Solution**: Collaboration with HiSilicon on LCOS solutions is ongoing, with potential mass production in Q4. This could disrupt TI's chip monopoly [3][10][11] - **North American Market**: Facing a 37.5% tariff on exports, the company plans to establish a factory in Vietnam to support future exports to North America and Europe [18][19] Future Outlook - **Revenue and Profit Goals**: - The company aims for stable revenue in the domestic market while maintaining growth in overseas markets. The home business is expected to generate over 400 million RMB in profit [27] - The vehicle business is projected to reach breakeven next year and achieve stable profitability by the following year [16] - **Market Strategy**: - The company does not plan to engage in large-scale marketing or price competition but will focus on integrating the midstream supply chain to mitigate risks from declining terminal demand [24] Additional Insights - **Sales Performance**: The suspension of national home appliance subsidies has had a limited impact on sales, primarily affecting product structure rather than overall sales volume [10] - **Product Mix**: The Play and Z series account for over 60% of total sales, with the Play series alone contributing over 30% [29] - **Dividend Plans**: The company plans to issue dividends this year, maintaining a historical payout ratio of around 50% [30]

Investment Rating - The investment rating for the company is "Outperform" (maintained) [4] Core Insights - The company's Q1 2025 performance exceeded expectations, with revenue of 810 million yuan, a year-on-year decrease of 2%, and a net profit attributable to shareholders of 63 million yuan, a year-on-year increase of 337% [4][8] - The domestic projection industry is showing signs of recovery, and the company is actively expanding its overseas market presence while advancing its automotive business [8] - The company's profitability has significantly improved, with a gross margin of 34.01% in Q1 2025, an increase of 5.96 percentage points year-on-year [8] Financial Data and Profit Forecast - For Q1 2025, the company achieved total revenue of 810 million yuan, with a projected total revenue of 4,065 million yuan for 2025, reflecting a year-on-year growth rate of 19.4% [6] - The net profit attributable to shareholders is forecasted to be 338 million yuan for 2025, with a year-on-year growth rate of 181.1% [6] - The earnings per share for 2025 is estimated at 4.82 yuan, with a projected price-to-earnings ratio of 27 times [6]