**Lens Technology Key Institutions:** Hongde Fund: Meng Yanyi Quanguo Fund: Zhang Xikun China AMC Fund: Wang Xiao Li Harvest Fund: Xu Yingting XYZS Global Fund: Wu Zhaoli E Fund Management: Yuan Fang, Tian Renxiu, Chen Guangrui, Tang Jie, Tang Bolun, Wu Yang, He Chongkai, Wang Yuanchun, Zhang Shengji, Ye Xi, Wang Yuxi China Europe Fund: Wang Zhuoli Fuguo Fund: Li Na, Zhao Zongjun

**Research Summary:**

**Q: What are the reasons for net profit growth exceeding revenue growth in the first half of the year?** A: This is mainly due to effective cost and expense control, as well as significant results from cost reduction and efficiency improvement measures at the Changsha company, leading to overall improved profitability. However, increased R&D expenses had some impact on short-term profits, so Q2 single-quarter net profit growth was approximately 30%, and R&D will be moderately controlled in the second half of the year. Additionally, new product launches in Q1 drove up capacity utilization rates, resulting in higher year-over-year growth in both revenue and profits. Q2 was traditionally a slow season with revenue of 15.897 billion yuan, slightly down from Q1 but up 19.25% year-over-year compared to Q2 last year.

**Q: What is the current profit level of the assembly business? Is there still room for profit growth in the future?** A: As the assembly business scale gradually expands, economies of scale are being fully realized. In the first half of 2025, assembly business continued to increase in the revenue structure, while the company's overall gross margin remained stable, fully demonstrating that the company's strategy of using complete machine assembly as a lever to drive continuous development of proprietary appearance and structural components through highly vertical integration capabilities has achieved good results. In the future, the company positions itself as an intelligent hardware manufacturer for the AI era, focusing on developing new high-margin hardware assembly such as AI servers, embodied intelligence, AR glasses, and gimbal cameras. It will also work to improve assembly business profit levels, maintain continuous communication with customers, continuously enhance component supporting capabilities, introduce more upstream proprietary components, and gain more obvious advantages in material procurement and other aspects in the future. Thanks to the company's highly automated production lines and continuous refined management, efficiency and yield rates continue to improve.

**Q: What are the reasons for Lens Precision's revenue and net profit declining slightly year-over-year? What are the reasons for Xiangtan Lens's 30% revenue growth but 50 million yuan profit decline?** A: Lens Precision's revenue decreased by approximately 300 million yuan year-over-year, and net profit declined by approximately 10 million yuan, mainly because the first half product structure was still dominated by mature products, and the pull rhythm of low-cost new models was relatively stable, with no obvious contribution to the first half. As we have now entered the second half peak season for new product stocking, major redesigns bringing value increases and demand growth will drive Lens Precision's performance growth. Revenue growth was mainly due to increased orders and higher proportion of BS settlement method, plus increased R&D projects and expenses for new products like Rokid AI glasses, which had some impact on short-term profits. With AI glasses accelerating large-scale mass production in the second half and the launch and stocking of new intelligent flagship smartphones, order backlog is sufficient, and we are currently in a busy peak season.

**Q: Is the significant profit improvement at Changsha Lens sustainable? What are this year's targets?** A: The Huanghua base new projects and new products at Changsha Lens have gradually completed customer verification and entered production, with capacity utilization significantly improved year-over-year and economies of scale emerging. Meanwhile, Langli base order volume increased and cost reduction and efficiency improvement measures showed significant results, leading to Changsha company's operating revenue growing 30.92% year-over-year and gross margin also significantly improving. This year's target is to turn around losses and achieve certain profitability.

**Research Report: Advanced Micro-Fabrication Equipment Inc.** Key Institutions: China Europe Fund, China AMC Fund, Harvest Fund, Great Wall Fund

**Research Summary:** 1. **How do you view the growth trend and sustainability of China's semiconductor equipment industry scale?** A: According to Techinsights data, the global semiconductor equipment industry is expected to reach approximately $108.6 billion in 2025, with China's semiconductor equipment market accounting for about 35%. Looking at semiconductor equipment development history, the market has characteristics of high volatility and poor predictability. However, from a 5-10 year long-cycle perspective, equipment is one of the fastest-growing areas in the semiconductor industry. China's semiconductor equipment market average growth rate far exceeds the international overall growth rate and has become the world's largest market. With the continuous improvement of domestic equipment market share, China's semiconductor equipment industry growth will continue to outperform overseas markets. We have sufficient confidence in the future development of China's semiconductor equipment industry and Advanced Micro-Fabrication Equipment Inc.

2. **How does the company view changes in the competitive landscape of the semiconductor equipment industry?** A: China's semiconductor equipment industry started around 2004. After more than 20 years of effort, it has achieved comprehensive coverage of semiconductor equipment categories. It is natural and healthy competitive state for equipment companies to make good products and continuously expand new product categories. Advanced Micro-Fabrication Equipment Inc. has always maintained an open attitude, welcoming compliant, benign competition that is conducive to rapid industry development. The company will continue to focus on product innovation with independent intellectual property rights, differentiated product design, and intellectual property protection. At the same time, the company will continuously improve operational efficiency, enhance comprehensive product competitiveness, and continuously expand product coverage and market share.

3. **What is the latest progress of the company's various new products, including thin film deposition and metrology equipment?** A: There are many types of thin film deposition equipment. Advanced Micro-Fabrication Equipment Inc.'s newly developed LPCVD thin film equipment and ALD thin film equipment in recent years have multiple new equipment products entering the market and receiving repeat orders. The company's tungsten series thin film deposition products can cover all tungsten applications for memory devices, received approximately 476 million yuan in batch orders in 2024, and continued high-speed growth in the first half of 2025. The company has developed metal gate series products for advanced logic devices: ALD titanium nitride, ALD titanium aluminum, ALD tantalum nitride products, which have completed equipment verification with multiple advanced logic customers. While meeting advanced logic customer performance requirements, the equipment's thin film uniformity, contamination control, and production efficiency all reach world-class levels. This series of equipment has been shipped to advanced logic customers for verification, with smooth approval progress. Advanced Micro-Fabrication Equipment Inc. plans to complete development of over 40 types of integrated circuit conductor thin film equipment in the future, capable of covering all categories of advanced metal applications, and has also planned and launched R&D for PECVD and PVD equipment with smooth product progress. Domestic metrology equipment, especially high-end metrology equipment market localization rate remains very low, with great development space, with current localization rate below 5%. Advanced Micro-Fabrication Equipment Inc. layouts electron beam metrology equipment through subsidiary Ultra Micro, with core team from globally renowned metrology companies in the US, Japan, Europe, etc. The first critical dimension measurement equipment R&D is progressing smoothly.

4. **What are the company's current capacity planning and personnel expansion plans?** A: The company has built new Nanchang production and R&D base, Shanghai Lingang production and R&D base, and Shanghai Lingang headquarters building and R&D center in the past three years, with new total area reaching 420,000 square meters, 15 times more than 2022, while planning to build new production bases in Guangzhou Zengcheng District and Chengdu Hi-tech Zone. The construction and commissioning of these bases significantly enhanced Advanced Micro-Fabrication Equipment Inc.'s capacity, ensuring the company's past high-speed development while providing solid guarantee for future large-scale production and R&D of new products. As of end of June 2025, Advanced Micro-Fabrication Equipment Inc. had 2,638 employees, including 1,321 R&D personnel, accounting for over 50%; among R&D personnel, master's and doctoral graduates account for 55.49%. The company's past personnel growth rate was approximately 22% annually, and this year is expected to maintain relatively stable personnel growth rate. We will adjust personnel expansion pace according to company operating conditions and product layout.

5. **The company's R&D investment as percentage of revenue continued to increase in Q2. When will R&D investment enter a relatively stable stage?** A: Advanced Micro-Fabrication Equipment Inc. currently needs to invest more R&D resources to ensure reaching international first-tier levels as soon as possible. In the first half of 2025, the company's R&D investment was 1.492 billion yuan, up 53.70% year-over-year, with total R&D investment accounting for 30.07% of operating revenue, far higher than STAR Market average and industry average. Looking at semiconductor equipment industry development patterns, international first-tier companies' final R&D investment accounts for approximately 10%-13% of revenue. In the future, as the company's product layout expands and revenue scale increases, R&D investment ratio still has significant room for decline, and the company's net profit level will be significantly improved.

**Research Report: Jinpan Technology** Key Institutions: Harvest Fund, Quanguo Fund, Fuguo Fund

**Research Summary:** **Question 1: What is the power density and volume situation of the company's solid-state transformer, and are there plans to launch higher power versions in the future?** A: The company's developed solid-state transformer has 2.4MW power. Compared to traditional transformer and UPS combination mode, it can effectively reduce power supply equipment footprint. Relying on the company's deep technical accumulation in medium and high voltage cascade product fields, the company's solid-state transformer has the capability to further expand to higher power and power density levels, with specific higher power versions developable according to customer needs. The company's data center SST products adopt modular design, and when customers have increased power requirements, they can perform modular expansion and flexible configuration according to on-site power requirements.

**Question 2: The company's SST product future market expansion plans and market share outlook** A: The company's solid-state transformer prototype has been completed. After sufficient testing and verification, the next step will be trial use and grid connection operation at data center customers, while continuously conducting technical iteration to ensure product advancement and safety reliability, continuously meeting customer needs. Based on full product verification, gradually expanding from domestic market to international market. Additionally, the company has laid out construction of digital factory project for data center power module complete series products, which will further increase the company's data center power module product manufacturing capacity. As data center power density continues to climb, higher requirements are placed on power modules, directly driving development of traditional power supply technology toward new high-end power equipment such as HVDC and SST DC architecture. Under this trend, HVDC and SST application scenarios and market demand are expected to continuously increase.

**Question 3: What are the company's competitive advantages in SST?** A: The company has been deeply cultivating the data center field for more than 10 years and is a well-known brand for domestic data center power supply and distribution equipment. The company's transformer series products, with advantages of high energy efficiency, low loss, strong overload capability, high reliability, and meeting long-term load requirements, as well as medium and low voltage switchgear and data center power module products with excellent design, stable performance, and safety reliability, have been widely applied in hundreds of data centers domestically and internationally. Technically, the company has deep technical accumulation in medium and high voltage cascade technology. Medium and high voltage direct-connected energy storage systems and medium and high voltage direct-connected SVG are widely used in the market, accumulating rich design, production, and operation experience for medium and high voltage cascade products. Meanwhile, relying on over 30 years of dry-type transformer manufacturing experience combined with finite element simulation capability, the company's SST supporting high-frequency isolation transformer products have high efficiency and good insulation strength. Additionally, relying on digital factory manufacturing capabilities, this not only ensures product delivery capability but also lays a solid foundation for new product technical iteration and innovation. With continuous R&D investment and deep technical accumulation, the company has competitive advantages in SST product iteration speed, technical performance, and innovation capability.

**Question 4: What is the overall order situation for the first half of 2025 and domestic order situation?** A: In the first half of 2025, the company's domestic orders grew 30.36% year-over-year. In domestic orders, growth in new energy fields mainly came from wind power, energy storage business and other sectors. In non-new energy fields, data center business showed significant growth. As of June 30, 2025, the company has sufficient orders on hand, with 7.54 billion yuan in hand orders (excluding tax), up 14.89% year-over-year, including 4.738 billion yuan domestic orders and 2.802 billion yuan export orders. In the future, the company will further leverage digital factory advantages in production and manufacturing, continuously enhance competitiveness in key areas such as new energy and data centers, while strengthening expansion of other business sectors to drive continuous growth of overall company business.

**Question 5: What is the supply and demand situation in the overseas oil-immersed transformer market?** A: In the overseas liquid-immersed transformer market, the company's overseas business achieved significant growth last year, mainly applied in new energy, data center and other fields, with good market prospects. Since this year, overseas market demand has remained strong with orders being delivered successively. To seize market opportunities and enhance global supply capabilities, the company completed construction of offshore wind power transformer factory at Wuhan base at the end of 2023 and continues capacity expansion. Currently this factory has batch production capability for medium and high voltage oil-immersed transformer products, capable of producing various medium and high voltage oil-immersed transformer products covering wind power, photovoltaic, data center and other downstream applications. As of the company's 2025 semi-annual disclosure date, the company has shipped 345kV high voltage liquid-immersed transformers. To better meet customer needs, based on this foundation, the company further expands capacity by expanding new amorphous alloy core and three-dimensional wound core liquid-immersed transformer workshop intelligent transformation project at Wuhan base, planned to enter production this year. With continuous expansion of global market demand and the company's continuous capacity layout, this business segment is expected to maintain good growth.