Summary of the Conference Call for Dazhu CNC (2025 Q3) Company Overview - **Company**: Dazhu CNC - **Industry**: AI-related manufacturing, specifically in high-value drilling equipment and PCB (Printed Circuit Board) production Key Points and Arguments Financial Performance - **Q3 Performance**: Revenue increased by over 60% year-on-year, and net profit grew by 140% [3][4] - **Gross Margin Improvement**: Significant improvement in gross margin due to the increased share of AI-related business and high-value CCD drilling machines [2][8] Market Trends and Future Outlook - **AI Industry Growth**: The company benefits from the strengthening AI trend, with major North American cloud service providers increasing investments [2][3] - **Market Growth Expectation**: The company anticipates continued market growth over the next two to three years, particularly in 2026 due to concentrated investments from leading PCB manufacturers [2][4][26] - **Focus on High-Value Markets**: The company is shifting focus from low-value markets to high-end substrates and related markets [5][29] Technological Advancements - **M9 Material Challenges**: The company is addressing technical challenges posed by M9 materials using ultrafast laser equipment for cold processing, which is deemed the most suitable solution [6][11] - **1.6T Optical Module Development**: Progress in partnerships for 1.6T optical module applications, with expectations to complete large-scale production of over 20 units by late 2025 or early 2026 [7][29] Product Contribution and Structure - **CCD Drilling Machines**: CCD drilling machines significantly contributed to overall gross margin improvement, with a notable increase in revenue from Q3 [9][26] - **AI Business Proportion**: AI-related drilling equipment is expected to account for approximately 30% of total business, with high-value CCD drilling machines making up about 10% of overall business [9][10] Competitive Landscape - **Market Positioning**: The company is not directly competing with Mitsubishi but is targeting new market demands driven by technological upgrades [10][11] - **Future of Drilling Technologies**: The company is focusing on enhancing its capabilities in mechanical drilling and laser drilling to adapt to new materials and market needs [20][21] Strategic Initiatives - **Expansion Plans**: The company plans to expand its production capacity, with a new facility expected to generate approximately 2.5 billion yuan in additional output [28][29] - **Focus on AI and High-Value Applications**: The company aims to leverage historical opportunities in the AI sector and high-value applications in Malaysia to enhance its position as a high-end equipment supplier [29] Concerns and Market Sentiment - **PTE Market Concerns**: The company believes that the key to the sustainability of the PTE market lies in the ongoing investment in AI, viewing it as a significant growth opportunity [27] Additional Important Insights - **R&D Strategy**: The company is focusing on customized solutions for specific client needs rather than competing in the consumer market [23] - **Future Revenue Sources**: Expected revenue sources for 2026 include breakthroughs in ultrafast laser drilling technology and increased demand from AI clients [26]

Summary of Hengli Hydraulic (601100 CH) Conference Call Company Overview - **Company**: Hengli Hydraulic - **Ticker**: 601100 CH - **Sector**: Machinery - **Market Cap**: CNY 123,423 million (USD 17,288 million) [6][16] Key Industry Insights - **Excavator Sales Growth**: Domestic excavator sales volume increased by 22% year-on-year, totaling 89,877 units for the first nine months of 2025, driven by replacement demand, hydraulic projects, and labor shortages [2][12] - **Export Volumes**: Export volumes rose by 29% year-on-year in September, with a total of 84,162 units for the first nine months of 2025, indicating a strong recovery in the excavator hydraulic business [2][12] Financial Performance and Projections - **Earnings Estimates**: EPS forecasts for 2025, 2026, and 2027 were raised by 3.6%, 1.7%, and 2.1% respectively, reflecting a positive margin trajectory [3][20] - **Revenue Adjustments**: Revenue forecasts for excavator cylinders were trimmed by 2-5% due to a higher sales mix of mid/large-sized excavators with declining ASPs, while hydraulic P&V segment revenue forecasts were raised by 0.4-3% [3][21] - **Gross Margin Improvements**: Segment gross margin forecasts were increased by 1.3-4.3 percentage points for 2025-2027 due to better scale effects [3][21] Valuation and Target Price - **Target Price Adjustment**: The target price was raised to RMB 104.00 from RMB 98.80, reflecting a 13% upside from the current price of RMB 92.05 [4][6] - **PE Ratio**: The target PE was lowered to 40x from 45x, reflecting a 30% discount to the peer average, as Hengli's EPS CAGR of 15% is below the peers' consensus CAGR of 21% [4][26] Investment Thesis - **Buy Rating**: The company maintains a Buy rating, supported by expected stronger sales in excavator hydraulic components and potential order wins in humanoid robot components [4][26] - **Market Sentiment**: Hengli's share price has increased by 76% year-to-date, significantly outperforming the CSI300 Index, which rose by 15% [2][12] Risks and Challenges - **Margin Pressure**: The hydraulic components manufacturing industry may face margin pressure due to raw material price hikes [37] - **Competition**: Increased competition from global peers in high-end hydraulic products could impact growth and profitability [37] - **Production Capacity Uncertainty**: Risks associated with the ramp-up of production capacity at the new Mexico factory and the development of linear drive products may affect revenue targets [37] - **Market Share in Humanoid Robots**: Potential loss of market share in humanoid robots due to competition could pose risks [37] Conclusion Hengli Hydraulic is positioned for growth with strong industry performance and positive earnings revisions. However, it faces challenges from competition and production uncertainties that could impact its future performance. The investment outlook remains positive with a maintained Buy rating and an increased target price.

Summary of Kingsoft Office (688111 CH) Equity Research Report Company Overview - **Company**: Kingsoft Office - **Ticker**: 688111 CH - **Sector**: Software - **Market Cap**: CNY 141,524 million (USD 19,866 million) [8][17] Key Industry Insights - **Software Localisation**: The US software export ban on China is expected to accelerate the localisation of office software, benefiting Kingsoft Office from 2H25 onwards. The Chinese government is promoting Kingsoft's ".wps" format to replace Microsoft's ".doc" format [4][13]. - **AI Engagement**: Kingsoft Office's AI narrative remains strong, with positive user feedback on WPS AI 3.0 and plans for an AI PC version of WPS Office [5][13]. Financial Performance and Projections - **Earnings Growth**: Kingsoft Office's earnings growth is anticipated to improve due to accelerated localisation revenue growth and enhanced AI user engagement. The company expects to reverse the decline in WPS software revenue from 1H25 and achieve robust growth from 2H25 to 2027 [3][4]. - **Revenue Estimates**: The revenue estimates for Kingsoft Office are as follows: - 2024: CNY 5,121 million - 2025: CNY 5,972 million - 2026: CNY 6,809 million - 2027: CNY 7,708 million [14]. - **Earnings Per Share (EPS)**: Projected EPS for the upcoming years: - 2024: CNY 3.56 - 2025: CNY 4.26 - 2026: CNY 5.03 - 2027: CNY 5.95 [9][15]. Investment Thesis - **Rating**: Maintain Buy with a target price of CNY 353.00, implying a 16% upside from the current share price of CNY 305.55 [6][22]. - **Valuation Method**: The target price is based on a 24x price-to-sales (PS) multiple using a 2026 revenue estimate of CNY 6.8 billion [6][21]. Risks and Catalysts - **Potential Catalysts**: - Improved subscription revenue contribution could enhance earnings visibility [29]. - Growth in AI user numbers may boost market sentiment and valuation [29]. - Strong government support for software localisation could drive growth [29]. - **Key Risks**: - Budget constraints from government entities may weaken localisation demand [29]. - Increased competition in the collaborative office software market could pressure pricing and sales [29]. - Slower conversion rates of paid users could hinder subscription revenue growth [29]. Conclusion Kingsoft Office is positioned to benefit from the ongoing trends in software localisation and AI engagement, with a strong outlook for revenue and earnings growth. The investment thesis remains positive, supported by robust financial projections and strategic government backing.

Summary of Zhejiang Huayou Cobalt Co Ltd Conference Call Company Overview - **Company**: Zhejiang Huayou Cobalt Co Ltd - **Ticker**: 603799.SS - **Industry**: Greater China Materials - **Market Cap**: Rmb104,001 million - **Current Share Price**: Rmb61.46 (as of October 17, 2025) - **Price Target**: Rmb76.00, indicating a 24% upside potential Key Financial Highlights - **3Q25 Net Profit**: Rmb1.5 billion, up 11.5% YoY and 3% QoQ [1] - **1H25 Profit**: Rmb4.2 billion, up 40% YoY [1] - **Revenue**: Increased approximately 12% QoQ to Rmb21.7 billion [1] - **Gross Margin**: Remained stable at 16.2% [1] - **Gross Profit**: Increased by approximately Rmb400 million (13% QoQ) to Rmb3.5 billion [1] - **Financial Expenses**: Increased by Rmb206 million QoQ, likely due to foreign exchange losses [1] - **Effective Tax Rate**: 16.1% in 3Q25 compared to 8.7% in 2Q25 [1] - **Net Gearing**: Decreased by 7.2 percentage points QoQ to 55.7% due to the conversion of Rmb7 billion convertible bonds into equity [1] Market Dynamics - **Cobalt Prices**: Expected to rise, with a 14% increase in October and a 34% increase in 3Q25, driven by the DRC's extended cobalt export ban and new export quotas [2] - **Production Capacity**: Huayou can achieve approximately 10% cobalt production as a byproduct from its HPAL nickel smelting capacity in Indonesia, estimated at 12,000 tons attributable production in 2025 [2] Valuation and Risks - **Valuation Methodology**: Price target derived from a DCF model with a WACC of 10.9% and a steady-state revenue growth rate of 2% [7] - **Upside Risks**: Improvement in cobalt prices, copper price hikes, rising sales volume of NCM precursors, and cost declines on self-supply of nickel raw materials [9] - **Downside Risks**: Lower-than-expected cobalt and copper prices, weaker-than-expected demand affecting precursor sales volume, and slower ramp-up of Indonesia nickel projects [9] Analyst Ratings - **Stock Rating**: Overweight [4] - **Industry View**: Attractive [4] Additional Insights - **Earnings Consistency**: Financial results are in line with estimates, indicating stable performance amidst market fluctuations [1] - **Future Outlook**: Continued benefits from rising cobalt prices are anticipated, positioning Huayou favorably in the market [2]

Summary of Didi Global and Caocao Conference Call Industry Overview - The report focuses on the ride-hailing and mobility services industry in China, highlighting the competitive landscape and growth opportunities for major players like Didi Global and Caocao. Key Points on Didi Global - **Coverage Initiation**: Didi Global is initiated with a Buy/High Risk rating and a target price of US$8.30, with a market share stabilizing at 70% in 2024 [2][10]. - **Operational Metrics**: Didi has shown a solid recovery in Monthly Active Users (MAU) and Daily Active Users (DAU), with MAU increasing by 24% year-over-year to 144 million and DAU up 26% to 31 million as of August 2025 [14]. - **Profitability**: Didi turned profitable in adjusted operating income starting from Q3 2023, with adjusted EBITA margins improving from 2.0% in 2023 to 4.4% in Q2 2025 [14][15]. - **International Expansion**: Didi has successfully entered international markets, particularly in Mexico and Brazil, where it has gained significant market share [16][19]. - **Growth Forecast**: The total Gross Transaction Value (GTV) is projected to grow by 12% CAGR from 2025 to 2028, reaching RMB 610 billion [23][25]. - **Investment Risks**: Risks include regulatory challenges, competition, and the impact of robotaxi and AI technologies [4][18]. Key Points on Caocao - **Coverage Initiation**: Caocao is also initiated with a Buy/High Risk rating and a target price of HK$70.00, with a market share of 5.4% in 2024 [3][10]. - **Growth Performance**: Caocao's total GTV increased by 53.6% to RMB 11.0 billion in the first half of 2025, driven by a 49% year-over-year growth in total order volume [47]. - **Revenue Breakdown**: Approximately 85% of Caocao's GTV comes from aggregator platforms, while 15% is from its own app and WeChat mini program [47]. - **Strategic Partnerships**: Caocao's partnership with Geely allows it to leverage a low-cost model and capture growth opportunities in the robotaxi segment [3][46]. Additional Insights - **Market Dynamics**: The ride-hailing industry in China faces challenges such as intense competition, declining average selling prices (ASP), and regulatory scrutiny, but still presents attractive investment opportunities due to structural demand growth [11][12]. - **Technological Advancements**: Didi is investing in AI and autonomous driving technologies, which are expected to enhance user experience and operational efficiency [22][21]. - **Competitive Landscape**: Didi maintains a dominant position in the market, but competition from platforms like Amap and the emergence of robotaxi services pose ongoing challenges [20][21]. This summary encapsulates the essential insights from the conference call regarding Didi Global and Caocao, focusing on their market positions, growth prospects, and the challenges they face in the evolving ride-hailing industry.

Summary of Orbbec Inc. Conference Call Company Overview - **Company**: Orbbec Inc - **Ticker**: 688322.SS / 688322 CH - **Sector**: Technology Key Financial Results - **Revenue Growth**: For the first three quarters of 2025, Orbbec reported sales of CNY 714 million, reflecting a **103% year-on-year growth** driven by increased adoption in downstream applications such as 3D scanning, payment verification, and robotics [1] - **Net Profit**: Projected net profit attributable to shareholders is approximately CNY 107.5 million, a significant turnaround from a loss of CNY 60.3 million in the same period of 2024, attributed to improved sales growth, cost management, and operational efficiencies [1] - **3Q25 Earnings Forecast**: The company anticipates earnings of CNY 47.3 million for the third quarter of 2025, representing a **32% quarter-on-quarter increase** [1] Strategic Developments - **Integration with Intel**: Orbbec's entry into the Intel Industrial Builders Community is expected to enhance its 3D vision applications in industrial settings. This affiliation allows access to Intel's architecture, technical training, and optimized partner solutions, which could lead to collaborative R&D initiatives and stronger ecosystem partnerships [2] - **3D Printing and Scanning Growth**: The company is positioned to benefit from the rapid expansion of the 3D printing sector, with the launch of products like the Pulsar ME450 multi-pattern 3D LiDAR, enhancing precision in applications such as 3D modeling and quality control. Revenue growth is expected to be robust due to increasing demand for high-accuracy sensors in industrial prototyping [3] Market Outlook - **Target Price**: The target price remains at CNY 105, based on a price-to-sales ratio of 28x for 2026, supported by a projected sales CAGR of 64% from 2024 to 2026, driven by growth in biometrics, 3D printing, and robotics [4][12] - **Risks**: Potential risks include slower growth in the robotics business, intensified competition affecting pricing and market share, and softening demand in the biometrics market [13] Additional Information - **Current Stock Price**: As of October 16, 2025, the closing price was CNY 81.09, with a "Buy" rating from analysts [4][9] - **Analyst Contact**: Research analysts Frank Fan and Donnie Teng are available for further inquiries [5]

Summary of Quadruped State of The Market Industry Overview - The quadruped robotics market is currently dominated by two main players: **Boston Dynamics** and **Unitree**, with **ANYbotics** and **DEEP Robotics** as notable competitors [4][37]. - Quadrupeds are recognized as the most advanced general-purpose robots, particularly with the advent of Level 2 Autonomy, which opens new market opportunities [3][9]. Key Players and Market Dynamics - **Unitree** holds an estimated **70% share** of global sales by volume in 2023, with annual revenues surpassing **1 billion RMB (~$140 million)** [46]. - **Boston Dynamics** generates an estimated **$100 million to $200 million** in annual revenue from its product line, including the quadruped **Spot** [38]. - **ANYbotics** focuses on environments requiring high protection ratings (IP67) and has an annual revenue of less than **$27 million** [44]. - **DEEP Robotics** is rapidly expanding, with around **600 deployments** across **40+ countries** [42]. Competitive Advantages - Unitree benefits from a substantial cost advantage compared to Western peers, with its high-end quadrupeds priced up to **50% lower** than those of competitors [8][108]. - The company has a broader product portfolio and faster product release cadence due to China's manufacturing capabilities [11]. Technological Developments - Recent advancements in **li-ion batteries** and **actuator technology** have significantly improved quadruped capabilities, reducing costs and increasing efficiency [33][134]. - Unitree employs a **Quasi-Direct-Drive (QDD)** actuator design, which offers a balance of cost and performance, although it may compromise robustness [137][143]. Market Opportunities - The Total Addressable Market (TAM) for quadrupeds includes industries such as **Oil & Gas**, **Semiconductor Fabs**, and **Datacenters** [6]. - Potential applications for quadrupeds include: - **Datacenters**: Inspecting electrical yards to prevent costly downtime [85]. - **Last-mile Delivery**: Offering a cost-effective alternative to human couriers [89]. - **Security Patrol**: Reducing costs associated with human security personnel [93]. Challenges and Risks - Security concerns have been raised regarding Unitree's technology, particularly in sensitive sectors like **semiconductor fabs** and **oil and gas** [132]. - The quadruped market remains fragmented, lacking a dominant player akin to a "hyperscaler" that could consolidate the market [84]. Conclusion - The quadruped robotics market is poised for growth, driven by technological advancements and increasing demand across various industries. Unitree's competitive pricing and strong market presence position it favorably, although challenges related to security and market fragmentation remain significant considerations for future developments.

Summary of Foxconn Industrial Internet (FII) Conference Call Company Overview - **Company**: Foxconn Industrial Internet (FII) - **Ticker**: 601138.SS - **Market Cap**: Rmb1.2 trillion / $172.9 billion - **Investment Rating**: Buy - **Price Target**: Rmb83.80, representing a 35.0% upside from the current price of Rmb62.06 Key Industry Insights 1. **Profitability Focus**: Management emphasized the importance of maintaining margins, particularly in the AI server segment. Strategies include: - **Scale Expansion**: FII plans to add new customers and increase allocations to existing ones to enhance production efficiency [2][2] - **Margin Improvement**: Targeting leading cloud service providers (CSPs) for better margins compared to brand customers [2][2] - **R&D and Automation**: Continued investment in robotics and AI to improve production efficiency and cash flow [2][2] - **Management Efficiency**: Strong local management in production sites enhances relations with local stakeholders [2][2] 2. **Competitive Advantages**: FII is confident in its competitive position in the AI server market, drawing parallels to previous tech cycles where customers consolidated suppliers. Key points include: - **High Entry Barriers**: The need for strong R&D and global production capabilities increases entry barriers, benefiting FII [3][3] - **Comprehensive Offerings**: FII's partnerships with major suppliers like NVIDIA and AMD enhance its market position [3][3] - **Ecosystem Collaboration**: Close collaboration with supply chain partners, such as TECO, accelerates customer deployment in AI [6][6] 3. **Networking Equipment Expansion**: FII is optimistic about its networking business, driven by the Gen-AI trend. Key developments include: - **Specification Upgrades**: Transitioning from 800G in 2025 to 1.6T in 2026, and up to 3.2T by 2027, significantly increasing switching capacity [7][7] - **Market Share**: FII holds over 75% market share in global switch sales as of 1H25 [7][7] Financial Projections - **Revenue Growth**: Forecasted AI revenue contribution is expected to grow from 8% in 2022 to 68% by 2026 [8][8] - **Earnings Estimates**: Projected EPS growth from Rmb1.17 in 2024 to Rmb3.56 in 2027 [11][11] Risks and Challenges 1. **Demand Fluctuations**: Potential for worse-than-expected demand in the AI server business [10][10] 2. **Competitive Pressures**: Strong competition in the iPhone component business could impact growth [10][10] 3. **Capacity Constraints**: Slower-than-expected ramp-up in new factories may hinder production [10][10] Conclusion - FII is well-positioned to capitalize on the growing demand for AI servers and networking equipment, supported by strong R&D, strategic partnerships, and a focus on profitability. The company maintains a positive outlook despite potential risks associated with market competition and demand fluctuations.

Tianyi Yan +86(21)2401-8609 | tianyi.yan@goldmansachs.cn Goldman Sachs (China) Securities Company Limited 20 October 2025 | 6:17PM CST Equity Research United Imaging (688271.SS): Quantify China PCCT market potential; TP up to Rmb175; Buy CT scanner is the largest category by bidding value among medical imaging equipment in China. Recently, with the NMPA approval of domestic Photon-Counting CT (PCCT) from United Imaging and Neusoft on the same day (Aug 26, 2025), as well as the strong sales performance of Si ...

October 20, 2025 08:20 AM GMT Yangjie Technology | Asia Pacific Robust earnings growth plus market share gain; OW Expect 20%+ revenue CAGR: Management reiterated its 2025 target set in the employee stock incentive plan for 2027 revenue to be not less than Rmb10bn or net profit to be not less than Rmb1.5bn, indicating ~20% revenue CAGR. We expect with the contribution from Better Fuse, Yangjie's revenue will grow at 22% CAGR (2024- 27e). Gross margin should improve steadily helped by better product mix with ...