Summary of Shenzhen Goodix Technology Co Ltd Conference Call Company Overview - **Company**: Shenzhen Goodix Technology Co Ltd - **Industry**: Greater China Technology Semiconductors - **Stock Rating**: Underweight [3] - **Price Target**: Rmb65.00, representing a downside of 22% from the current price of Rmb83.09 [3] - **Market Capitalization**: Rmb37,867 million [3] - **Average Daily Trading Value**: Rmb532 million [3] Financial Performance - **Fiscal Year Ending**: December - **Earnings Per Share (EPS)**: - 2024: Rmb1.32 - 2025 (estimated): Rmb1.29 - 2026 (estimated): Rmb1.43 - 2027 (estimated): Rmb1.64 [3] - **Revenue (Net)**: - 2024: Rmb4,375 million - 2025 (estimated): Rmb4,795 million - 2026 (estimated): Rmb5,781 million - 2027 (estimated): Rmb6,410 million [3] - **EBITDA**: - 2024: Rmb511 million - 2025 (estimated): Rmb643 million - 2026 (estimated): Rmb894 million - 2027 (estimated): Rmb1,003 million [3] - **Price-to-Earnings (P/E) Ratio**: - 2024: 61.1 - 2025 (estimated): 64.6 - 2026 (estimated): 58.0 - 2027 (estimated): 50.8 [3] - **Return on Equity (ROE)**: - 2024: 7.5% - 2025 (estimated): 6.8% - 2026 (estimated): 7.2% - 2027 (estimated): 7.8% [3] Market Outlook - **Order Outlook**: Anticipation of better orders in the second half of the year, driven by strong smartphone seasonality in the fourth quarter [5] - **Ultrasonic Fingerprint Sensor**: - Full-year shipment estimate increased to 40 million units from 35 million due to increased penetration - Expected addressable market of 130 million units in 2026 and 180-200 million units in 2027 - Targeting over 60% market share by 2027 [5] - **NFC, eSE, eSIM Solutions**: - Expected market size of Rmb7 billion with a target of 30% market share - Current gross margin around 30% with potential for improvement [5] - **Other Products**: - Light sensor adoption in flagship smartphone models - Haptic driver in design phase - OLED TDDI product launch expected in 1H26, with commercialization in 2027 [5] Risks - **Upside Risks**: - Faster-than-expected market share expansion and new product rollout - New applications for fingerprint technology [8] - **Downside Risks**: - Slower-than-expected market share expansion and new product rollout - Weaker-than-expected gross margin despite improving cost structure [8] Valuation Methodology - **Key Assumptions**: - Cost of equity: 8.4% - Medium-term growth rate: 16.5% - Terminal growth rate: 4.9% [7] Conclusion Shenzhen Goodix Technology Co Ltd is positioned in a competitive semiconductor market with a focus on innovative products like ultrasonic fingerprint sensors and NFC solutions. Despite a strong market outlook, the company faces challenges in achieving its growth targets and maintaining margins. The current stock rating is underweight, reflecting cautious sentiment amid potential risks.

Group 1: Digital Currency Business Progress - The company is a pioneer in the digital RMB ecosystem, collaborating with 8 second-tier operating institutions and Huawei to develop a comprehensive solution for various scenarios, including cross-border applications and government subsidies [3] - The "Chutianlong Digital RMB Smart Contract Platform" has been successfully implemented in multiple pilot projects across the country, providing digital RMB products and technical services for major events like the Winter Olympics and the Service Trade Fair [3] - Future plans include expanding scenarios, deepening technology, and enhancing cross-border cooperation to promote the application and development of digital RMB [3] Group 2: Revenue Model and Product Matrix - The company has established a comprehensive digital RMB product matrix that includes hardware products like digital wallets and terminals, as well as software services such as system platform development and operational services [4] - This integrated solution aims to generate sales revenue by providing a combination of hardware and software services to clients [4] Group 3: Stablecoin and International Business - The company is actively exploring the implementation of digital currency bridges, smart contract designs, and cross-border settlement optimizations while maintaining a focus on stablecoin technology and market trends [5] - Currently, the company's overseas business is relatively small, but it has increased efforts in developing international communication and financial product projects to enhance its market share and brand recognition [6][7] Group 4: eSIM Business Development - The company is advancing its eSIM and eSE product offerings in various sectors, including mobile communications and smart transportation, while also pursuing external investments to rapidly expand its eSIM business [7] - The ongoing international expansion strategy is expected to lead to more project implementations in embedded security products and innovative financial services [7]