A：This conference is mainly divided into two parts. First, the company's management will introduce the group's 2026 interim results, followed by a question-and-answer session.

A：In the face of the significant impact of the sharp increase in storage prices on the demand of the consumer electronics industry, Chuti Technology achieved revenue growth in the first half of the year. Revenue reached 9.923 billion billion yuan, up 12.4 per cent year-on-year, but down 17.6 per cent from the second half of last year. Revenue growth was mainly due to the increase in sales volume in the three major business areas, with mobile phone camera modules up 30.1 percent year-on-year, IOT camera modules and lidar up 46.9 percent, and car camera modules and lidar up 65.5 percent year-on-year. Gross profit fell slightly by 0.4 percentage points compared to the same period last year, and gross profit margin was 6.6, down 0.8 percentage points from the same period last year.

A：There are two main reasons for the decline in gross profit: First, the product structure of some mobile phones was affected by the increase in storage prices, and the sales of camera modules with 32 million pixels and above fell 7% year-on-year, resulting in a decline in the proportion of high value-added mobile phone modules; second, biometric The sales volume of modules fell by 7.9 year-on-year, which affected capacity utilization and gross profit margin.

A：During the period, the expense rate increased by 0.4 percentage points compared with the same period last year, which increased in the case of revenue growth, mainly due to the company's long-term development, increased investment in high-end product research and development in IOT and automotive fields. The final net profit was about 0.276 billion billion yuan, a decrease from the one-time equity gain (about 0.8 billion yuan) due to the sale of Indian equity in the second half of last year. If this factor is excluded, it is down 26.1 per cent from the previous month.

A：All three core businesses have achieved steady or rapid growth. The mobile phone sector benefited from a 30.1 per cent year-on-year increase in camera module sales and a 11.8 per cent increase in revenue, a nearly 47 per cent year-on-year increase in sales in the IOT sector, a 13.8 per cent increase in revenue, a 65 per cent year-on-year increase in sales in the automotive sector and a 117.3 per cent increase in revenue. Non-mobile businesses such as IOT and in-vehicle sectors grew 52.3 year-on-year in the first half of the year, achieving the growth guidance of not less than 50% set at the beginning of the year, especially in lidar products that have been delivered on a large scale, with sales exceeding 800000.

A：In the field of smart glasses, we have established cooperative relations with 22 brand manufacturers, of which many products have been delivered on a large scale. For example, monochrome AR optical machines have been delivered in large quantities, and color optical machines have also begun to be delivered in small quantities. Overseas head terminal brands have also begun to deliver new projects. In the field of machine vision, major breakthroughs have been made in smart glasses, giant robots, intelligent driving and other applications. It has established close cooperation with many head companies and solution providers at home and abroad, and achieved mass production and delivery of visual solution products. The project has obtained batch orders. It is expected that these businesses will far exceed the mobile phone business in the future and become an important growth point of the company.

A：By the end of the first half of the year, we had 40 partners, up 5 from the end of last year, including 7 global TL one. In December last year, China issued two L-level licenses, which should continue to increase in the first half of this year.

A：The current cooperation with Europe is very solid, and the follow-up forecast is even greater. As a Hong Kong group company, we have extensive supply chain coverage and are rooted in the Asia-Pacific region, with cost competitiveness and technological competitiveness, which is very attractive for our cooperation with companies in Europe, North America and Japan.

A：In the automotive sector, although the Chinese mainland automotive market is facing some pressure, the overseas market is growing rapidly. We are confident that we can achieve larger-scale delivery in the field of autonomous driving in the future, because we have multi-product delivery capabilities, high-end vehicle module and lidar product delivery capabilities, and international delivery capabilities.

A：In the mobile phone market, we continue to pay attention to and strengthen high-end products, such as the first launch of 10 times portrait king in China, and increase market share through vertical integration capabilities and international layout capabilities, and have made significant progress in cooperation with famous brands.

A：In the first half of this year, Qiuti's finances remained sound, and the debt-to-asset ratio was basically the same as at the end of last year and increased slightly, mainly due to the increase in full-caliber cash and bank borrowings. Financial indicators such as capital-liability ratio and quick ratio are in a solid state.

A：Our core strategy is not opportunism, but focuses on the five ultimate applications in the field of light: light perception, light display, light connection, light computing, and light storage. At present, the focus is on light perception and light display, while actively paying attention to the development of light connection.

A：Light perception refers to the perception of external information, such as cameras and lidar; light display refers to the light engine and HUD display of AR glasses. Both areas we believe are good for the long term.

A：While the memory industry is under pressure, we believe this is just a cyclical issue. Our response strategy is to improve ourselves in three areas: capacity, market share and high-end position, and after crossing the cycle, get a positive Davis double-click when the volume market recovers, I .e., larger volumes and higher unit prices lead to better financial returns.

A：First of all, we are committed to the AI of the whole process of design and manufacturing services, introducing a large number of AI and digital experts to promote the intelligent revolution of tools and methods. Secondly, we carry out the vertical integration of the core elements of the whole link, integrate design materials and process equipment from the optical system, and build core fulcrum algorithm equipment and actuator drivers worldwide to maintain our leading ability.

A：We will expand our market share by increasing the share of existing customers, continuously entering new customers and actively exploring new customers and new categories around the world. For example, despite the decline in the fingerprint business, the overall share is growing and it has successfully entered the world's largest mobile phone company. At the same time, we also began to provide light engines, lidar and HOD products for new areas such as robots and AR glasses to further expand market share.

A：We have an irreplaceable core value in AR display technology and are currently the only company that can control the focus power consumption to 2 milliwatts and the weight to 5 milligrams. Through the ability to integrate vision module systems, we have made significant progress in the high-end market.

A：With our strong optical design capabilities and video equipment assembly capabilities, we can cut the lens very small while maintaining its optical performance. This is currently the only company that can put a large chip into a small lens and make a triple zoom portrait lens.

A：Core practices in the business cycle include market expansion, capacity strengthening, and high-end progress. Our first growth curve will continue to be various optical modules such as camera modules, identification modules and lidar; the second growth curve will come from the integration of affiliated companies, such as the microdrive business, which has reached the world's first in shipments in the global market and has many patented technologies.

A：The second growth curve mainly comes from core devices such as circuit boards, of which circuit board shipments have ranked first in the world in the field of mobile phone cameras. In addition, it also includes the subsequent production of the whole machine. We have the manufacturing scale under our own control and will integrate it at the right time.

A：We firmly believe that the AI's growth logic for smart terminals has not changed. Despite the recent disruption in the mobile phone market, Chuti is actively expanding the notebook market and has made large-scale progress. At the same time, we pay attention to the cultivation of internal skills and improve our own capabilities. We believe that the market will surpass the current level after recovery, and the growth rate of optical systems other than mobile phones will be faster.

A：The optical connection track has a highly multiplexed production process, which is highly compatible with the existing technology of Churti, and the core equipment is autonomous and controllable, with the advantages of powerful AI measurement equipment. In addition, the potential scale of the optical connection market is huge, which is expected to reach $100 billion billion in 2030, and matches the underlying optical understanding and ultra-large-scale manufacturing precipitation of Churti, which is expected to become the company's second growth track.

A：At present, the core devices and supporting in the field of mobile phone cameras are the second growth curve, while the optical interconnection is the third growth curve. We have achieved rapid growth in the field of light perception and light display, such as lidar, robot cameras, car cameras and AR cameras, and are confident that we will surpass the traditional mobile phone business in the future. In terms of optical interconnection, we have invested in many aspects, especially in the perspective of global optimization of optical systems, aiming at the NPO field, and starting from the bottom passive devices to develop and manufacture, so as to gain future competitive advantages. However, it is not convenient to disclose the specific project promotion and time point.

A：Xinjuke has begun to undertake the design and customer service of some passive devices, but this is more of a point-to-point service to customers. For the passive device business, our plan is to adopt IDM mode, that is, design and manufacture ourselves, so we need a complete roadmap and team. This part of the work will be done by Chuti Group itself, using our operations centers at home and abroad to serve global customers. At the same time, we will realize the layout of China and the United States in the passive device manufacturing center to ensure efficient service.

A：According to the current view of the memory market and the market position of Chuti, the unfavorable factor is that the mobile phone market will continue to be under pressure. Favorable factors include that we have one of the largest customers in terms of shipments worldwide, and there may be mass production of flagship projects next year. Although the mobile phone market as a whole is under pressure, areas other than mobile phones, such as drones, sports cameras and the car market, have grown significantly, especially the car business sales growth this year is close to three digits, and is expected to maintain a high growth rate of more than 50% next year. Overall, the mobile phone market may continue to be under pressure, but through improved customer structure (such as advances in the driver motor and lens areas), we are expected to achieve a relatively superior position in the mobile phone field. At the same time, emerging areas other than mobile phones, such as AR glasses and cars, have been fully laid out and entered the mass production stage.

A：In cooperation with large customers, the amount of value we can provide is higher, and the specific share varies from project to project. In the field of robotics, we may be the only one that can provide a full range of solutions from ordinary RGB binocular cameras to binocular plus monocular, binocular plus lidar, etc., and have received large orders. The advantage of our technology is the ability to customize various camera configurations, including FOV-invariant drivers and fusion technology for dense lattice lidar.

A：As Polly's largest shareholder, we are very bullish on its technology. Polly has good design results on consumer AR glasses, its technology is unique and favored by major global customers, such as edge AI computing has not yet found an alternative. We have successfully integrated Polly's technology with the company's in-car and AI phone supply chain, with volume launches expected in the first half of next year. In addition, we have also established Polly production lines in the Philippines, Kunshan and other places to ensure the landing and application of technology. The effective integration of European technologies with supply chains and technologies in the Asia-Pacific region will help improve overall competitiveness.

A：In the second half of the year, the price pressure in the mobile phone field is still large due to the fluctuation of memory price. However, in the area of IOT products such as drones and motion cameras, we are optimistic about ASP due to factors such as policy easing, hot-selling products and an increase in the proportion of cameras above 8 million pixels. For the future direction of investment and mergers and acquisitions, we will continue to pay attention to the opportunities in the field of optical connectivity, and make a layout based on long-term development. The specific details are inconvenient to disclose, but we will try our best to eliminate unfavorable factors, grasp the development trend of the industry, and strive to achieve the long-term success of the company in various fields.

A：We have a strong advantage in the field of AR glasses. First of all, we have unique advantages in cameras, focusing devices, etc. Our products can still achieve good performance at more than tens of milliwatts of power, and we have more than 140 patented miniaturized MOC packaging technology worldwide. One of the only two companies in the world. In addition, we are very strong in vertical integration, from lenses, circuit boards to motors, algorithms and equipment have in-depth investment, and not only do parts, but also invest a lot of resources in the research and development of calibration algorithm software and complete machines.

A：Clients have encouraged us to invest in this direction, but we are taking a cautious approach and are not in a hurry to invest a lot of money. Although semiconductor processes such as microlenses are not yet mature in AR glasses display, our team is familiar with this technology and is concerned about its future development. Although there is less output at present, we will not hesitate to enter when the market starts. At the same time, micro-nano optics and diffractive optical waveguide process compatibility is very high, we will carefully carry out the relevant layout.

A：Our strength lies in system-level thinking and vertical integration, enabling holistic design and manufacturing from a global optimal perspective. We have high-end talent, including AI and algorithmic talent, and have published multiple articles in international visual magazines. For the upstream supply chain, we believe that this is the key point of the decisive battle, the need to establish a symbiotic relationship with the core device companies, to participate in the design plan, in order to achieve the global optimal.

A：In the motor business, we have achieved remarkable results, such as obtaining the most patents in the world, forming a strong R & D team and process team, owning an independent equipment company and completing the integration of core materials. Motor products have achieved the world's first position, covering a wide range of technologies, and continue to invest and focus on development. We plan to integrate the motor business into a public company because it is in line with our long-term plan and global best strategy. The lens business is currently the part that we need to grow vigorously, and Motor has established a complete layout worldwide to provide the best quality service.