新易盛20250826

Summary of the Conference Call for NewEase (新易盛) Company Overview - NewEase is benefiting from an increase in market demand and client orders, leading to a rise in sales, with expectations for strong market demand to continue into 2026 [2][3] Key Points Industry and Market Dynamics - The optical module industry is experiencing a rapid evolution, with the introduction of 1.6T products expected to ramp up in the second half of 2025, contributing to sales growth in 2026 [2][4] - The company is well-prepared to meet the challenges posed by shortages of upstream components due to the rapid growth in AI demand, ensuring production and shipment schedules remain stable [2][5] Financial Performance - In Q2 2025, NewEase reported revenue close to 6.4 billion RMB, attributed to improved market conditions, increased client orders, and a higher proportion of high-speed products [3] - The company maintains a cautious approach to profit margins, expecting them to remain stable despite the increasing share of products above 800G [5][22] Supply Chain and Production - NewEase has implemented unique supply chain management strategies to mitigate the impact of raw material shortages, ensuring production remains within controllable limits [5][6] - The first phase of the Thailand factory has been operational since 2023, with the second phase expected to come online in early 2025, aimed at expanding capacity to meet future market demands [2][7][20] Research and Development - R&D expenses have doubled quarter-on-quarter due to increased investment in technology and new projects, aimed at maintaining a competitive edge [2][9][21] - The company is focusing on advanced technologies, with a gradual increase in the proportion of silicon photonics products and early disclosures of LPO product solutions [2][13][16] Inventory and Financial Management - Inventory levels have remained stable relative to revenue, attributed to consistent stocking strategies and collaboration with clients [6][10] - The company has not faced significant adverse impacts from tariff policies, as optical module products are on the exemption list, and it has established robust supply capabilities in both China and Thailand [8][12] Future Outlook - The company anticipates continued strong demand in the market, with a focus on adapting to changes in client needs and market conditions [2][3][22] - NewEase is actively following up on client demands for LPO products, aiming to capture a significant market share [16][17] Additional Insights - The company is cautious about predicting future profit margins but expects them to remain stable despite market fluctuations [5][22] - There is a noted increase in employee compensation due to rapid company growth and an expanding workforce [19]