As the automotive industry officially enters the era of on-device AI mass production in 2026, large language models are rapidly being deployed on automotive-grade chips, with cloud-device integration emerging as the dominant technical pathway. Smart cockpits are evolving from obedient tools into proactive intelligent mobility companions. While the industry debates how to integrate AI into vehicles, PATEO (02889) has already answered how AI creates value through its 2026 interim results.

In the first half of 2026, PATEO maintained a stable core business while increasing resource allocation to its AI operations, allowing its emerging AI business momentum to continue building. The company recorded revenue of RMB 2.228 billion, a 105.1% year-on-year increase. Among this, AI intelligent solution revenue reached approximately RMB 209 million, surging 588.6% year-on-year. Revenue growth was driven by two key factors: first, the premiumization of its smart cockpit main business, with a rising share of high-value-added projects; second, consistent contributions from new AI businesses, overseas expansion, and innovative service models. While the industry still explores AI integration pathways, PATEO's interim results confirm its growth engine: premium smart cockpit operations solidify the foundation, while AI ventures, overseas markets, and innovative services expand incremental opportunities, supported by technology-driven cost efficiencies.

During the period, the smart cockpit segment, as PATEO's core business, entered a period of intensive harvest. Leveraging mainstream high-end chip platforms from Qualcomm, Kirin, and NVIDIA, the company achieved batch design wins across multiple brands and vehicle models, maintaining industry leadership in premiumization, AI adoption, and globalization. Specifically, PATEO secured three new domestic and overseas design wins from leading domestic automakers based on the Qualcomm SA8295P platform, and added five new AI cockpit vehicle models based on the Kirin 9610A platform. Development and mass production of AI cockpits based on Qualcomm's fifth-generation Snapdragon Cockpit Platform至尊版 (QAM8397P/QAM8797P) are progressing, with a design win from a leading new energy vehicle company already entering mass production in the second quarter. This convergence of multi-platform design wins and flagship project production has established a comprehensive product matrix spanning mid-to-high-end to flagship segments, resulting in a robust order pipeline.

Additionally, PATEO achieved a major breakthrough in overseas high-end markets. A cockpit project developed in collaboration with an international luxury automaker passed acceptance testing, with products set to ship to European and Middle Eastern markets. This milestone validates the company's technical capabilities and engineering delivery standards to global premium automakers, marking a critical step in its globalization strategy. Meanwhile, the AI solutions business maintained strong growth momentum across several fronts: in cockpits, the company continues to secure high-end cockpit chip R&D projects providing pre-production support to OEMs; in infrastructure, it is expanding AI server-based computing services to meet customer AI computation demands; and in R&D efficiency, its self-built platform has secured multiple external commercial projects with a widening customer base.

Beyond immediate growth from business expansion, PATEO is building long-term technical moats through dual investments in production capacity and R&D. On the R&D front, the company remains committed to its AI strategy with sustained high-intensity investment. R&D expenses reached RMB 148 million in the period, up 33.5% year-on-year. The company continues to advance foundational technologies including on-device large models, world models, AI agents, and cloud-device integrated platforms, strengthening its technical defenses. As R&D outcomes accelerate into commercial application, its self-developed cloud-device integrated AI Agent platform has secured design wins from leading automakers, and its AI-driven digital R&D system is taking shape, building momentum for improved operational performance. During the period, PATEO became one of the first contracted customers for Horizon Robotics' inaugural cockpit-driving fusion vehicle intelligence chip, Horizon Starry®, and partnered with XunCe Technology and Saimo Technology to co-develop a Token-based physical AI world model and TokenOS, exploring innovative business models such as vehicle token-based billing that shift automotive AI from hardware sales toward continuous operational value creation.

On the production capacity front, the first half of 2026 marked a milestone for PATEO's capacity expansion. Its Ruian intelligent manufacturing base reached full production, while multiple other bases in Neijiang, Xinchang, and Xiamen continued to scale up. Overall delivery capacity has significantly improved, enabling the company to fulfill the growing volume of high-end design win orders both domestically and internationally. This capacity realization provides tangible support for sustained revenue growth. The concentrated expansion of production facilities underpins current growth, while deep R&D investment illuminates future prospects. As production lines across multiple bases operate at full capacity, what they deliver is not just manufacturing capability but the accumulated payoff of years of technical investment. When AI agents and cloud-device integration platforms transition from the laboratory to design wins at leading automakers, the technical moat becomes more than patent counts—it transforms into a self-reinforcing cycle of R&D, design wins, and mass production.

In August of this year, the company announced the acquisition of approximately 70% equity in Chengdu Mingyi, a domestic optical communication electrical chip design company. Chengdu Mingyi is among the very few domestic companies capable of mass-producing single-channel 100G TIA electrical chips, widely used in 400G/800G optical modules. Looking ahead, PATEO plans to leverage its multi-chip platform advantages to accelerate high-end AI cockpit mass production and advance its global expansion strategy. Simultaneously, it will roll out new businesses such as AI BOX and AI agents, while entering the optical chip sector to complete its software-hardware-chip-cloud closed loop and unlock further growth potential.

In the first half of 2026, PATEO proved through a series of high-end design wins, operating production bases, and new business lines that its AI strategy is not merely conceptual but fully realized. From premium cockpits and AI BOX to optical chips, the company is charting a growth curve from automotive intelligence to comprehensive intelligent connectivity through its integrated software-hardware-chip-cloud capabilities. In the near term, capacity release offers earnings elasticity; over the long term, technological compounding builds competitive barriers. As industry trends align with the company's strategic rhythm, PATEO is positioned to enter a phase of high-quality growth, with both performance and valuation set to climb.