Cidi Zhizhao (03881.HK) 2025 Annual Earnings Release Conference
[AI Key Points Summary]
Financial Performance
- Achieve revenue of 885 million yuan in 2025, increasing by 115.8% year-over-year, maintaining rapid growth momentum
- Gross profit reaches 189 million yuan, growing by 86.7% year-over-year, with profitability continuously strengthening
- Adjusted loss as a percentage of revenue decreases to 27.4%, improving by 3.5 percentage points year-over-year, significantly enhancing operational efficiency
- Achieve annual sales receipts of 460 million yuan, increasing by 38% year-over-year, with operating cash flow conditions continuously improving
Business Progress
- Delivery quantity of unmanned mining trucks leaps from 28 units in 2023 to 630 units in 2025, with a three-year compound annual growth rate of 374%
- Total number of delivered and currently delivering unmanned mining trucks exceeds 1,500 units, with cumulative mileage surpassing 16 million kilometers
- Six out of the top ten open-pit coal mines nationwide have chosen to adopt Xidi Zhijia unmanned mining trucks
- Successfully listed on the Hong Kong Stock Exchange, becoming the first stock in the Hong Kong market for commercial vehicle autonomous driving
Guidance for next quarter’s performance
- In 2026, it will focus on high-value regions and prioritize expansion into markets such as Australia, the Middle East, and Mongolia
- Advancing unmanned operations across the entire drilling, blasting, excavation, and transportation processes, launching the world's first AI intelligent agent dispatching system
- Developing an integrated energy management system and independently researching a new generation of unmanned mining truck products
- Technology + insurance business will deploy at least 2,000 vehicles this year to further verify the effect of reducing claims
Opportunity
- The overall potential market space for China’s unmanned mining industry is as high as 560 billion yuan, with the mining truck transportation market valued at approximately 170 billion yuan
- Partnering with Sinoma International, a global giant in mining services, to become its unmanned mining truck supplier, gaining access to 412 project resources
- Overseas markets have higher labor costs and greater gross profit margins; plans are underway to expand abroad alongside large Chinese mining companies
- Developing intelligent dispatching and energy management systems for mining scenarios, reducing electricity costs through refined energy management
Risk
- Component companies in the supply chain are transitioning into the L4 unmanned mining truck sector, intensifying industry competition
- Fluctuations in commodity prices have impacted mining operation rates, while the building materials market has been affected by the downturn in real estate
- Autonomous heavy trucks on open roads still face regulatory uncertainty, affecting the pace of business expansion
[AI Conference Record]
Xu Min
Good morning, ladies and gentlemen, investors, and analyst friends. I am Xu Min, Vice President of CIDI Autonomous Driving. It is a great honor to represent the company in welcoming you all to CIDI Autonomous Driving's 2025 Annual Results Presentation.
2025 marks a milestone year in the development journey of CIDI Autonomous Driving. We successfully listed on the Hong Kong Stock Exchange, becoming the first commercial vehicle autonomous driving stock in Hong Kong, officially entering a new phase of capital market development.
This represents both the capital market and investors' high recognition of our technological and commercialization capabilities, as well as a significant responsibility and expectation. Today, with an attitude of sincerity, openness, and rigor, we will review the company’s operating results over the past year together with all of you.
We will analyze financial performance, strategic progress, and clearly share our insights into industry trends, commercialization strategies, global layout, and future development plans.
Next, we will officially begin the earnings presentation session. This meeting is conducted in bilingual channels (Chinese and English) and is simultaneously live-streamed on platforms such as Roadshow, Wind 3C Conference, Tencent Self-Selected Shareholders, Choice, and East Money.
First, allow me to introduce two other members of the company's management attending today: Dr. Ma Wei, Co-founder and Vice Chairman, and Dr. Hu Sibo, CEO. Thank you all once again for your attendance.
Before proceeding, please take note of the disclaimer for this earnings presentation. As all of you are professionals, I won't go through it in detail.
This meeting will be divided into two parts. The first part is the management's performance presentation, and the second part is the Q&A session. I will first introduce to everyone the company’s business progress in 2025.
Let us summarize the highlights of the company’s performance for the entire year. In terms of overall operating performance, in 2025 the company achieved revenue of 885 million yuan, a year-on-year increase of 115.8%, maintaining a high growth momentum.
The gross profit level reached 189 million yuan, a year-on-year increase of 86.7%, with profitability continuing to strengthen. Meanwhile, our adjusted loss as a percentage of revenue fell to 27.4%, improving by 3.5 percentage points year-on-year, reflecting a significant enhancement in operational efficiency.
In terms of collections, we achieved sales collections of 460 million yuan for the year, a year-on-year increase of 38%, with continued optimization in operating cash flow conditions.
In our core business area, the unmanned mining truck sector, we achieved explosive growth. From 2023 to 2025, the number of unmanned mining trucks delivered by Xidi Zhijia increased from 28 units to 630 units, with a three-year compound annual growth rate of 374%, achieving a twenty-fold increase, far exceeding the industry average growth rate of 73%.
To date, Xidi Zhijia has delivered or is in the process of delivering over 1,500 unmanned mining trucks in total. This fully demonstrates our leading advantages in product delivery capabilities and large-scale implementation.
More importantly, our market position continues to solidify. Under the pure product sales model, six out of the top ten open-pit coal mines nationwide have chosen to adopt Xidi Zhijia's unmanned mining trucks. This clearly shows that our products are at the forefront in terms of technological maturity, scenario adaptability, and customer recognition.
Next, let us take a look at the company’s breakthroughs and business achievements in the field of unmanned mine driving. First, let’s examine the operational data. To date, the cumulative mileage of Xidi Zhijia’s unmanned mining trucks has exceeded 16 million kilometers, with a cumulative transport volume surpassing 140 million tons.
These figures not only validate the stability and reliability of our products but also mark that we possess mature operational capabilities in large-scale commercial scenarios.
In terms of operational efficiency, we have achieved an extreme performance where one supervisor oversees 100 vehicles running continuously for 24 hours with a total intervention time of no more than five minutes. This means that in unmanned and reduced-manning operations, we have truly achieved high efficiency, safety, and stability, creating significant operational value for our customers.
We have also excelled in customer stickiness. Multiple clients, such as Taiwan Cement and Hongmao Group, have made repeat purchases five times, demonstrating a high level of recognition for our products and services.
At the same time, we signed an in-depth strategic cooperation agreement with Sinoma International, covering more than 400 mine owners globally, laying a solid foundation for the expansion of overseas markets.
In terms of single-order scale, we have achieved new breakthroughs. The order scale for Guangna Group reached 500 units, setting a new industry record.
Looking at typical projects, our products have been deployed on a large scale in multiple extreme environments and complex scenarios. For example, 102 unmanned mining trucks were deployed at the Jiland露天煤矿, 70 units at Tianchi Energy's General Gobi No. 1 and No. 2 sites, and 122 units at Guanghui Malang露天煤矿.
In the Inner Mongolia region, the State Energy Baorixile site successfully operated 100 unmanned mining trucks in an extremely cold environment of minus 40 degrees Celsius. More than 70 units were also deployed at Xilingol Baiyinghua露天煤矿.
These projects not only cover a wide range and are large in scale but also fully demonstrate Cedric's adaptability to extreme climates and complex working conditions, as well as its capability for large-scale deployment.
In the field of unmanned mining, we continue to build a broader ecosystem, promoting mine automation from technological breakthroughs to commercial win-win outcomes. Cedric’s core strategy is to work closely with original equipment manufacturers (OEMs) to empower our customers, who are mine operators, with high-value product applications.
We place particular emphasis on the precise quantification of economic value. In terms of cost reduction and efficiency improvement, unmanned mining trucks operate around the clock without interruption. Considering that each traditional manned mining truck requires two to three drivers, the annual labor cost per driver is approximately RMB 300,000 to 450,000.
Over a four-year operation, the total driver cost for one mining truck would be RMB 1.2 million to 1.8 million. Our autonomous driving system adds only about RMB 600,000 in additional costs for clients, making it significantly economically beneficial for our clients, the mine operators.
Meanwhile, through unmanned solutions, we effectively address the difficulty of hiring workers in mines. As we know, mining areas are often located in remote regions with harsh working conditions, and recruiting drivers has always been a major challenge. By adopting unmanned solutions, we fundamentally resolve this industry pain point, helping clients achieve stable and sustainable operations.
Safety value should not be overlooked either. Frequent safety accidents in mining operations not only result in casualties but also often lead to extended production halts for rectification. Unmanned operations fundamentally eliminate safety hazards. By reducing the number of personnel entering high-risk work areas, we not only protect lives but also help clients avoid significant losses from production stoppages.
Overall, Xidi Zhijia has collaborated with original mine ecological models, OEMs, and mine operators to create a new pattern of unmanned mines driven by technology, value sharing, and benefiting all parties involved.
Next, let’s shift our perspective from this business implementation back to the underlying logic of the industry to examine why China's intelligent and unmanned mining market possesses sustained explosive growth potential.
Firstly, China itself is a global mining powerhouse with massive mine sizes and high operational intensity, providing fertile ground for the application of intelligent technologies. In terms of total market size, the overall potential market for China's unmanned mining industry by 2025 is as high as 560 billion RMB.
Among this, mining trucks used for transportation account for about 30%, representing a market size of approximately 170 billion RMB. This is further divided into wide-body vehicles and dump trucks. Wide-body vehicles, which are currently experiencing rapid growth, do not require licensing and can only operate in enclosed scenarios, making them a key segment undergoing fast unmanned penetration and replacement.
China sees an annual addition of about 35,000 wide-body vehicles. With the average price of each autonomous mining truck being around 2.5 million RMB, this creates a market space exceeding 80 billion RMB. This is a segment where unmanned replacements can rapidly penetrate within the next five years.
Another category of vehicles operates on open roads but carries lower loads, namely dump trucks. The potential autonomous driving market for these vehicles is also around 80 billion RMB. Although current regulations still impose some restrictions on open-road autonomous driving, the trend toward open-pit mining is accelerating the transition of dump trucks to wide-body vehicles.
As the proportion of open-pit mining increases, wide-body vehicles, due to their cost-effectiveness and adaptability, are becoming the primary vehicle type in the growing market. This also provides a broad platform for the penetration of unmanned driving technologies.
Beyond the two types of mine-carrying vehicles mentioned above, it’s evident that the largest expenditure in the mining market is energy costs. During the traditional fuel vehicle era, fuel consumption accounted for about 40% of costs, given the heavy workload of mining trucks.
In the process of transitioning from fuel to electricity, while energy costs have decreased to a certain extent, battery costs have risen. Therefore, after the widespread adoption of electrification, we can develop intelligent dispatch and energy management systems tailored to mining scenarios. Through refined energy management, we can effectively reduce electricity costs and carbon emission intensity for mines, creating quantifiable reductions in energy costs for clients.
This segment of the integrated energy management market also has a scale of several hundred billion.
In addition, there is also a structural trend in the development of China's mining industry: the difficulty of coal resource extraction is increasing day by day, and the demand for earthwork transportation continues to rise. At the same time, the mining process is becoming more complex. Customers are no longer satisfied with automation in just a single transportation link; instead, they urgently need comprehensive technical solutions that cover the entire process.
This also means that once deep cooperation is formed, customer stickiness will significantly increase.
While achieving scaled breakthroughs in mining scenarios, we are also accelerating the generalized application of autonomous driving technology, extending core capabilities to broader industrial scenarios, and continuously enhancing commercial value. Our three key application directions are autonomous heavy trucks, intelligent connected vehicles (V2X), and intelligent perception.
First, looking at autonomous heavy trucks, we have already implemented them in closed or semi-closed scenarios such as port logistics parks. Typical projects include the Zhongyue Puzhai Smart Port, where Xidi Zhijia, as the leading truck supplier, holds the largest project share, as well as the Chengdu Qingbaijiang International Land Port unmanned driving project, which is the first instance of an unmanned driving plus vehicle-road coordination solution in a rail-road intermodal scenario in Sichuan Province.
Next, regarding collaborative intelligent transportation (V2X), our V2X products have been widely applied in multiple scenarios, including bus priority systems, industry-academia-research collaboration in mining areas, airport expressways, specific zone logistics, and smart parking lots. To date, we have deployed over 3,000 buses, covering 11 cities. Our OBU product has achieved cumulative sales exceeding 14,000 units, fully demonstrating our ability to scale and commercialize in the vehicle-road collaboration field.
Regarding intelligent perception, we are expanding into urban rail transit, mining, security enforcement, and other scenarios. The globally top-standard CL4 and TABS products we have developed are steadily being delivered on Hefei Line S1. New scenarios like Wuxi Line S1 and Nanjing Line 7 have also completed multi-level product testing and validation.
We have also innovatively launched a technology-plus-insurance business model, empowering commercial vehicle insurance risk control through technology and creating new business models and growth opportunities.
Overall, aside from mine automation, we are extending our core technological capabilities to more scenarios, forming a multi-faceted and deeply advancing commercial landscape. In the future, we will continue to deepen our focus on scenario expansion and ecosystem building, promoting autonomous driving technologies to create broader economic and social value.
On the previous page, I mentioned that in the intelligent perception sector, we innovatively launched a technology-plus-insurance business model. Next, I will provide a detailed introduction to this innovative business, which is our Security Intelligence Travel initiative.
First, let's take a look at the industry's pain points. New energy commercial vehicles generally face the issue of high claim rates and high compensation rates, leading to low willingness from insurance companies to underwrite, while fleets bear significant premium pressures, even resulting in many policies being loss-making or rejected. This is not only a challenge for the insurance industry but also restricts the large-scale promotion of new energy commercial vehicles.
Looking at the market potential, we predict that by 2030, the penetration rate of new energy commercial vehicles will reach 70%, with an estimated stock of eight million units, representing a potential premium scale of up to 160 billion yuan. Based on the current high compensation rates, insurance companies could face losses amounting to tens of billions of yuan.
Addressing this industry pain point presents a highly promising blue ocean market.
In response to these pain points and opportunities, Xidi ZhiJia has introduced the Anbao Zhixing solution. By leveraging three core capabilities—risk monitoring and intervention, standardizing driving behavior, and a data analytics platform—we reduce accident risks at the source, making risks visible, manageable, and controllable.
Through closed-loop data from pilot projects, we have validated the system's effectiveness in reducing compensation during actual operations, and based on this, developed a standardized, replicable, and easily promotable technical solution.
With the above solution, we aim to build a win-win ecosystem for all four parties involved. For original equipment manufacturers (OEMs), we help upgrade their vehicle products, enhancing competitiveness. For fleets and car owners, we use technology to lower premiums and operational risks, achieving cost reduction and efficiency improvement.
For insurance companies, we quantifiably reduce claim rates and compensation ratios, improving their profitability. As for ourselves, CD ZhiJia, through technical services and data accumulation, we accelerate product commercialization and establish a sustainable business model.
Currently, we have established strategic partnerships with leading companies such as Ping An Property Insurance, Pacific Insurance, Qingling Motors, Wuzheng Group, and Foton Motor, jointly promoting the implementation of this innovative model.
The above covers our business progress. Next, our company's CEO, Dr. Hu Sibo, will introduce the technological advancements. Everyone, please welcome him.
Hu Sibo
Thank you, fellow investors. I am Hu Sibo. Next, I will introduce the core technologies and progress of CD Autonomous Driving.
We believe that autonomous driving for commercial vehicles cannot rely solely on single breakthroughs. Instead, it requires building a complete technical framework from physical AI to carrier intelligence around core scenarios such as heavy-duty vehicles and unmanned mining operations. This ensures the safety and reliability of the technical solution while enabling future updates, iterations, and evolution.
First, our technology is deeply rooted in heavy-duty vehicles themselves. CD has a profound understanding of drive-by-wire chassis and heavy vehicle dynamics, as well as the capability to proactively participate in the design of intelligent driving heavy truck platforms.
Our autonomous driving algorithms can be deeply integrated with the vehicle’s mechanical systems to achieve centimeter-level precision control required under the harsh conditions of mining. This provides the physical foundation for achieving fully unmanned operations in an inherently safe zone.
Second, at the single-vehicle level, we use multi-sensor deep fusion perception and algorithms driven jointly by models and data to achieve reliable environmental understanding across all weather and operational conditions. We have specifically optimized our multimodal CT perception system for extreme and harsh environments in mines.
At the fleet level, CD has broken through the traditional single-vehicle intelligence model and developed multi-agent swarm intelligence technology. Through information sharing between vehicles and distributed collaborative decision-making, we can optimize the operation and scheduling of the entire fleet from a holistic perspective. This is the key to managing large-scale mixed fleets with high operational efficiency.
The moat of our technology is three-dimensional and enterprise-wide collaboration. This full-stack self-developed technology system is the fundamental reason we can achieve large-scale, highly reliable commercial deployments in complex industrial scenarios like mining. It also serves as an important foundation for us to expand into other scenarios and go global.
Metamine for the original mine is our flagship product. It is not only a technological concept but also an innovative revolution reshaping the production relationships in mining. Its core idea is to establish a real-time connection between the physical world of the mine and the industrial metaverse.
We have built a digital twin that is fully synchronized with the real mine, where real-time simulation, scheduling, and remote interaction occur in this virtual world to enable safer and more efficient operations for physical equipment.
Unmanned systems address the transportation aspect, while CD also advances higher technical difficulty tasks such as drilling, blasting, and excavation, covering the entire chain of mining production. Amid the trend toward equipment electrification, we are integrating autonomous driving with energy management to smartly schedule charging and comprehensively manage energy consumption.
In addition, we are continuously conducting positive R&D on warehouse-free and warehouse-based mining trucks. By designing specialized vehicle models from the ground up that are more compatible with autonomous driving, we can achieve better cost efficiency, higher reliability, and stronger integration, helping us build a deeper competitive moat.
Therefore, our original mine represents a strategic upgrade from providing automation tools to offering intelligent productivity solutions, as well as an evolving smart operating system for the mining industry.
This is the technical framework of our original mine, clearly presenting the full synergy between the physical mine and its digital twin within a closed-loop logic. This includes supervisors, mine owners, technicians, administrators, and remote operators, all of whom can accomplish tasks such as mine simulation, dispatch optimization, and AI decision-making in the virtual space of the metaverse.
Through real-time mapping and two-way interaction between the metaverse and the physical world of mining, the unmanned systems in the physical world continuously generate data and update it to the metaverse for digital modeling and AI optimization. The metaverse then sends back generated instructions to guide operations in the physical world, creating a fully unmanned and intrinsically safe area.
This also marks a significant difference from many autonomous driving scenarios. In mining, it's not just about responding to the state of the physical world but truly changing it. Therefore, predicting physical design behaviors must be handled with highly effective methods.
The core value of this architecture is breaking down the boundaries of physical space and organizational roles, enabling all intelligent carriers to collaborate based on a unified digital foundation. With no humans left in the physical world, safety and efficiency have greatly improved, liberating productivity and completely transforming traditional operational models in the mining industry.
Among these developments, in the extremely harsh and complex operating environments of mines, how autonomous driving systems can perform like humans or even surpass human capability has led to targeted breakthroughs in multi-modal perception systems.
Our system supports 360-degree identification of both static and dynamic obstacles, even functioning normally in extreme low-visibility conditions of ten meters or less, such as dust storms or heavy fog. At the same time, it autonomously maintains detection continuity, avoiding performance degradation across varying light conditions, harsh weather, and vibrations, achieving reliable L4-level operation.
Core methodologies include precise identification of static and dynamic obstacles using multi-radar systems, multi-sensor fusion, and deep integration of LiDAR, multi-camera vision, millimeter-wave radar, and other diverse data sources, forming BEV 3D object detection capabilities tailored for mining use cases.
In complex environments, this allows for accurate recognition of 3D targets, enabling the autonomous driving system to operate effectively in the most demanding scenarios within mining.
True intelligent driving is not only about seeing the present but also foreseeing the future. In complex scenarios like mines, with multi-vehicle cooperation, intricate road conditions, and frequent emergencies, the challenge is to make AI not just passively respond but proactively predict and cooperatively make decisions.
Traditional autonomous driving relies on massive amounts of real data for training, which is not only costly but also struggles to cover all extreme scenarios. At CD, we leverage Shenzhen's visual models, applying specialized knowledge of mine environments, including vehicle dynamics, enabling AI to handle various corner cases with much less real data, significantly lowering the barriers for data collection and training.
More importantly, world models empower AI to make precise future predictions. For example, when multiple unmanned vehicles operate cooperatively in a mine, they can anticipate the trajectories of other vehicles, adapting to complex multi-agent traffic flows.
This technology has three major functions. The first is creating an abstract representation of the mine environment. What makes this different from other autonomous driving scenarios is that these vehicles are not merely responding to the environment—they are actively changing the transportation landscape.
By expanding the world model through these capabilities, it effectively supports the safety and efficiency of autonomous vehicle fleets in complex scenarios.
Among these, multi-agent swarm intelligence represents a key technical difference for CD compared to competitors. On the left, you can see the single-vehicle intelligence mode used in passenger cars, where each vehicle operates as an isolated information island, making locally optimal decisions based solely on its limited perception, which easily leads to efficiency bottlenecks and safety hazards at the fleet level.
As we know, even though passenger vehicle autonomy is increasingly approaching human capability, a lack of coordination among vehicles in cities can still lead to overall congestion.
On the right is CD's multi-agent swarm intelligence, which builds a decentralized cooperative network. Vehicles share their location, status, intentions, and transport plans in real time, making distributed decisions and coordinating based on global information, achieving optimal system-wide efficiency across the entire operating environment.
This leap from individual optimization to systemic optimization greatly enhances the overall transportation efficiency of mines. Therefore, the fundamental difference between swarm intelligence and single-vehicle intelligence lies not in the number of vehicles but in whether they possess collective wisdom.
The above content highlights our core technological advancements, particularly in mining applications. Next, our VP of Capital Markets, Min Xu, will provide a summary of our business performance.
Xu Min
Alright, next let's quickly review the core financial performance for the entire year of 2025. First, regarding total revenue, in 2025 the company achieved a total revenue of 885 million RMB, representing a year-on-year increase of 115.8%, more than doubling the 2024 figure of 410 million RMB, continuing a very strong growth trend.
Next is the gross profit performance. The company achieved a gross profit of 189 million RMB for the whole year, marking an 86.7% year-on-year increase, with profitability continuing to improve.
In terms of loss control, we have also made significant progress. The proportion of adjusted losses to revenue decreased by 3.5 percentage points year-on-year, and the extent of the loss narrowed further.
You may have noticed that our absolute amount of losses and adjusted net losses have expanded compared to 2024, mainly due to the following reasons. First, the company implemented equity incentives to retain key employees, resulting in a significant increase in share-based payments.
Second, in order to seize market opportunities, we made some strategic investments in marketing. Third, to strengthen asset quality and financial foundations, the company, based on prudent principles, recognized some credit impairment losses.
Although the above items had a certain impact on the company's short-term reported profits, they help the company focus on core business development and achieve long-term stable operations.
After reviewing the financial performance for the entire year, let’s now look at another equally critical metric: cash flow and capital reserves. First, during last year's IPO process, we successfully raised funds amounting to 1.309 billion Hong Kong dollars.
In terms of collections performance, in 2025 the company realized collections of 460 million RMB, a year-on-year increase of 38.1%, with collection capabilities continuously strengthening and operational efficiency steadily improving.
As of the end of 2025, the company's cash and cash equivalents reached 1.384 billion RMB, achieving a robust growth of 352% compared to 333 million RMB in the same period last year.
The above is a brief financial review of the company. Next, let's welcome Dr. Ma Wei, the co-founder of the company, to introduce the future prospects of the company.
Ma Wei
Hello everyone, I am Ma Wei. Let me now introduce some of our company’s future prospects.
Our strategy is not focused on single-point technologies, but rather on building a complete and repeatable growth logic that can be implemented and verified across three major scenarios: intelligent mine vehicles, road collaboration, and smart logistics. This approach ensures enough resilience to maintain steady growth despite market fluctuations.
Our future strategy has three main aspects. The first is our original mining business, where our focus will be on deepening our operations to maintain a leading position. Since this mining sector is already highly regarded, we aim to sustain our leadership in four key areas.
First, we aim to achieve full unmanned operations across the entire process from drilling, blasting, excavation, to transportation. It’s not just about the transport vehicles but also includes digging, blasting trucks, and drilling rigs—all fully unmanned.
Secondly, we have launched the world’s first AI-based scheduling system for intelligent agents. This system uses AI to improve overall operational efficiency in mining.
Thirdly, we are building an integrated energy management system. While electrification in mines saves fuel, the infrastructure for green power charging and storage hasn't kept pace with the development of electric heavy trucks. This is crucial, especially for promoting ESG transformation in mining.
The fourth aspect is product innovation. We are developing a new generation of self-designed products that fundamentally reconstruct the cost structure of mining trucks. For instance, by using customized new tires and eliminating traditional driver cabins, we further enhance profitability. Therefore, within the scope of our original mining operations, we continue to deepen our expertise.
In the autonomous driving heavy truck business, our focus is on precision. Although there are signs of rapid growth in this area, there remains considerable regulatory uncertainty regarding autonomous vehicles operating on public roads.
We believe that despite our heavy-duty trucks having different application scenarios, over the next one to two years, we will still focus on closed scenarios at both loading and unloading ends with semi-autonomous operations. These semi-closed scenarios include some open-road situations, and we aim to achieve scaled implementation. Currently, most activities on open roads are demonstration-based, which doesn't significantly impact our business growth.
In these types of scenarios, we typically choose applications with high user value, regulatory approval, avoiding any gray areas, and ensuring a clear commercial closed loop. This is also in preparation for large-scale driverless deployment on open roads, which is a massive market that may arrive quickly in the coming years or take longer. We are preparing thoroughly while also achieving profitability.
The third area is intelligent perception and V2X, where we emphasize generalization. In this field, we have moved from single safety risk control and autonomous driving through security enforcement, applying deep learning models of autonomous driving to solve certain pain points.
For instance, the primary challenge facing heavy-duty trucks today is not about driverless technology saving costs but rather insurance issues. We have new solutions for this.
At the same time, we are expanding into mines, ports, and even customs-related operations, such as mandatory unmanned environments. For example, customs operations at Vietnam border crossings require separation of personnel and vehicles, including vehicle-to-road coordination.
Another key focus is expanding overseas operations, which is part of our international strategy and our next critical growth engine.
The scope of overseas operations is relatively broad, covering mature markets,刚需 markets (markets with strong demand), and developing markets. Their needs vary, but they all prioritize safety due to the severe consequences of accidents involving human life in mining operations.
This is something we must pay attention to. For example, in mature markets like Australia and Brazil, labor costs are significantly high, making unmanned operations an economically viable solution to meet their demands.
From a competitive perspective, currently, large foreign industry leaders, though experienced, are still operating in relatively simple scenarios and cannot match our complex, large-scale mixed environments.
In this field, we are no longer explorers but leaders in technology. With over 1,500 mine trucks delivered or in the process of delivery, our large-scale complex mixed operations already exceed human efficiency. This technological edge opens doors to top global mining operators.
As for how to expand globally, there are multiple ways. In the coming one to two years, we emphasize collaboration. Although we have a solid starting point, entering many mature markets requires partners with whom we can jointly venture overseas.
For instance, we are collaborating with global mining service giants like Sinoma International, becoming their supplier of unmanned mining trucks, and they have 412 ongoing projects. Additionally, we are working with Taiwan Cement, one of the top ten cement producers globally. Over the past few years, Taiwan Cement has made repeat purchases from us five times, and we are also their core technology provider in driverless solutions.
Regarding the expansion of intelligent heavy trucks overseas, we are also collaborating with several original equipment manufacturers (OEMs) on vehicle manufacturing, customization, and intelligence to jointly venture abroad.
In 2026, we will focus on high-value regions to set industry benchmarks, including Australia, the Middle East, and Mongolia, targeting markets with rigid demands for safety, efficiency, and sustainability. We will roll out an end-to-end solution for mines, further propelling China's manufacturing onto the world stage.
That concludes my report. Thank you all.
Xu Min
Thank you, Dr. Ma and Dr. Hu, for your presentations. That concludes the management’s recommended session. Next, we’ll move on to the Q&A portion. Investors or analysts present who wish to ask questions, please raise your hand. Thank you.
Deng Xue
Thank you, management, for giving me the opportunity to ask a question. Based on the recent presentations, we were quite impressed by some of the core operational metrics shared regarding CeDi. It appears that CeDi maintains significant advantages in both business and technology.
Following up on those insights, we would like to gain a deeper understanding of CeDi's current core technologies and algorithms. Specifically, what differentiated competitive advantages or ‘moats’ have been established? We’ve heard some explanations, but we’d like to know more about these differentiating factors. Moreover, given the rapid pace of technological advancements, could you elaborate on the key areas of R&D investment and provide a clearer future roadmap for maintaining leadership going forward? Thank you.
Hu Sibo
Thank you for this question. The key moat here lies in its directional nature. We have a deeper relationship with the physical world, which needs to be addressed from a technological perspective.
As I mentioned earlier, one of the challenges includes mastering the dynamics of heavy-duty vehicles, which are much more complex than passenger vehicles. These involve difficult-to-control hydraulic systems that require centimeter-level precision. Considerations must be made for the interaction between large tires and the ground, potential skidding, wear and tear, and the overall impact on autonomous driving systems as well as transportation.
Therefore, whether it's motion control, perception, or multi-vehicle coordination, these technical issues are far more challenging than those faced by road vehicles. This is where we have accumulated significant expertise.
In terms of swarm control, many niche markets haven't encountered this issue yet because the number of robots or single vehicles operating in their environments is relatively low. However, in mining operations, we’ve already faced scenarios where 5% to even 10% of all vehicles may be unmanned, making vehicle coordination crucial.
This is why we anticipated early on that swarm control would be a core technological direction essential for successful commercialization.
On one hand, we have fully self-developed technologies like Vehicle-to-Everything (V2X) and Vehicle-to-Vehicle (V2V) cooperative systems, including various proprietary algorithms and devices. These allow us to provide better technical capabilities within distributed multi-vehicle systems.
This approach also demonstrates how we build a multidimensional application framework capable of adapting to different scenarios and practical applications.
All these challenges ultimately tie back to the logic of our relationship with the physical world, as we are genuinely transforming it rather than merely responding to it.
Therefore, our optimization of modeling the physical world—whether dynamic participants like vehicles or static elements such as mine slopes and work surfaces—requires significant reasoning and deep understanding.
These factors lead to a situation where many industrial autonomous driving scenarios encounter significant barriers. To address this, relatively specialized and sophisticated methods are required to provide value to customers and achieve successful commercialization.
The focus of our R&D investment plan moving forward is to maintain a leading position in this industry, particularly at the technological level. The deployment of drilling, blasting, excavation, and transportation capabilities is crucial. This core competency significantly enhances customer loyalty because clients prefer comprehensive solutions to help them resolve operational issues related to mine transportation.
As a provider of integrated solutions, we offer a self-contained closed-loop technology framework and operational logic, which is a key reason why clients are highly motivated to maintain long-term cooperation with us.
We are continuously building technological reserves for new businesses. As Mr. Ma mentioned earlier, these include integrated energy management, autonomous vehicle charging systems, and even considerations of advanced terramechanics to address tire wear and provide detection and estimation of tire conditions. These efforts aim to create more robust and reliable fully autonomous solutions. Thank you.
Deng Xue
Sorry, I forgot to introduce myself earlier. I am Deng Xue, the chief automotive analyst at CICC, and I have been closely following the commercial applications of autonomous driving. Thank you once again, and I look forward to visiting your company for research and closely tracking your progress. Thank you.
Xu Min
Thank you, Mr. Deng, and also thank you, Dr. Hu, for your responses. Everyone is welcome to continue asking questions.
Zheng Ruifeng
Hello, members of the management team. I am Zheng Ruifeng, a senior analyst at Goldman Sachs, and I appreciate the opportunity to ask questions. I'm very pleased to attend today's earnings release, the first since Lizard Brackets went public.
The main focus of my question revolves around the technology and insurance business. General Manager Xu Ming previously analyzed that this line of business represents a relatively innovative area, and is also a key development focus for us going forward. We have also noticed that our company has already established certain collaborations with leading insurance enterprises like Ping An and Pacific Insurance.
On this matter, I have three small questions. The first one is, could you elaborate on our overall company's profit model from the perspective of this business? That's the first question. Secondly, Dr. Ma mentioned earlier about the three aspects: feasibility, verifiability, and quantifiability. Are we now able to quantify the entire pilot project’s data in terms of reducing claims payouts? Additionally, is this business model already verified through the pilot project?
Thirdly, I would like to understand when we plan to scale up the promotion of this business, and what kind of impact it will have on our company’s overall revenue and profits. Yes, those are the three main questions regarding technology plus insurance.
Ma Wei
Alright, thank you. Regarding tech-driven insurance, the current focus is primarily on the significant growth of electric vehicles. In the passenger vehicle segment, as EV adoption rises, so do premiums. For instance, Elon Musk is using autonomous driving technology to reduce insurance costs. However, his system is quite expensive. Currently, in the US, Tesla has shifted to a subscription model at $100 per month, totaling less than 10,000 RMB annually.
From the perspective of using deep learning in intelligent driving to lower premiums, full autonomous or self-driving capabilities are not necessary due to regulatory risks. Instead, we focus on high-performance sensing systems to detect hazardous situations, which go beyond just driver behavior and environmental factors.
This issue has become increasingly prominent over multiple discussions with clients in recent years. Many feel they cannot purchase adequate insurance coverage, while insurers claim heavy losses — though this is an age-old problem. Various companies have attempted solutions over the past decade, such as DMS systems that check if drivers are sleeping or using their phones, but these efforts have shown limited success and eventually became mere formalities despite their low cost.
Some monitoring based on the BeiDou system, including positioning and scheduled rest checks, has had some effect, though not very significant.
Therefore, our approach this time is essentially to solve this problem systematically with an autonomous driving solution. It addresses driver behavior, road conditions, and human interaction. This solution, while cheaper than Tesla’s, remains fairly complex and incorporates deep learning rather than merely checking whether eyes are closed.
As for current progress, last year, in 2025, we conducted a test involving 500 units. The data showed a reduction in premiums by 10% to 20%, which is quite promising. As a result, several major insurance companies have signed contracts with us. This year, the volume will increase; we are expecting deployments of at least 2,000 vehicles to further solidify the data.
As for this order, the current quantity definitely exceeds that, but what we emphasize is having complete data that can truly be provided to customers. The verification of these value concepts has made the customers very excited and they really like it.
As for how to make a profit and our business model, we use a combined approach. We charge for the hardware cost, but we also collect some service fees. Of course, it’s nowhere near 99 dollars a month. This is actually an integrated approach that makes it easy for customers to get started while giving us the possibility of long-term revenue.
At present, in signing orders, we follow this principle: we are not dumping products or running a loss-making business. After all, we aim to solve problems. We always target high value. If the value isn't recognized by the customers, no matter how much material you pile on, it won’t work. That’s my general response; I don’t know if this clarifies things.
Zheng Ruifeng
Dr. Ma, thank you for your reply.
Xu Min
Everyone can continue asking questions, thank you.
Shen Xu
Thank you, management, for giving me the opportunity to ask questions. I am Shen Xu from Dongwu Overseas. I have two small questions. The first one is: since the company has already proven very well its ability to implement projects, what are the key aspects that need iteration and upgrading as we move forward to replicate this on a larger scale? And what direction might be the focus of advancement this year?
The second question is about recent significant changes in commodities. Based on the company's past experience, through which mechanisms do changes in resource prices and mine expansions impact the company’s order flow and revenue timing? Additionally, how does management view the prospects for major minerals like coal, gold, and copper over the next one to two years, and how might these affect the company’s project acquisition, capacity expansion per mine, and revenue realization? Thank you.
Wei Ma
Let me first address the situation of bulk commodities, and perhaps Si Bo can add to it later. I'll answer this in reverse order. This is an excellent question because we're dealing with mines, which fall under bulk commodities. The price volatility can sometimes be very sharp due to factors like wars, oil prices, or anything else that changes. Coal prices also fluctuate significantly.
The conclusion is that the impact on us is relatively limited and indirect. As Xu Min mentioned earlier regarding the industrial chain, the mine owners are at the forefront and are most affected. For instance, if coal prices drop, their profits will obviously decline as they are on the front line.
The second tier consists of operators. If there is a significant change in coal prices, particularly in a downturn, it might result in reduced operating rates. For example, even if there are a thousand trucks running, they may only operate for one month and halt for another. In such cases, revenue from earthwork contracts would decrease.
We are actually a hard tech product company and belong to the third tier. We are impacted but to a very limited extent, unlike the first or second tiers. Our products have already been sold, whether they carry gold or dirt, our vehicles charge the same. Our pricing is based on transporting dirt, as transportation must continue regardless.
Therefore, while bulk commodities experience significant fluctuations, the actual impact on us is present but not substantial.
Looking at specific niche markets, the growth momentum in coal mines is currently very strong. The reason our orders are getting larger has two aspects. One is regulation; the National Mine Safety Administration has clear regulatory requirements, as accidents sometimes cause considerable casualties.
Secondly, our solution addresses safety issues because with no people involved, accidents won’t happen. While personal safety incidents could still occur, there won't be any loss of life, and it saves money by eliminating human labor, right?
Thus, in the coal mine market, we believe the growth momentum is very robust because their orders are relatively large.
The second area involves sand, gravel, and construction materials. These mines are generally smaller but numerous. Currently, due to the downturn in real estate, the performance of these bulk commodities isn't great. Therefore, the impact on us often relates to new additions. For instance, plans to add a certain number of units this year might slow down.
However, we discovered that Taiwan Cement has repurchased shares five times consecutively over the past few years. Later, we realized that there are also opportunities in a declining market. The reason is that during downturns, their production capacity utilization is low. For instance, they might operate for two months and then halt operations for a month. If there are drivers, the question arises: do you lay them off or continue to pay their wages because market conditions are highly unpredictable?
They feel unmanned operations are much easier to manage since there are no personnel involved. I can stop when I want and start when needed. In fact, in a declining market, this presents a new business opportunity. Therefore, it cannot be said there are no opportunities, which is why we need to look at it this way.
Metal mines are currently experiencing significant price declines for certain metals, so mining activity has slowed down a bit. We are involved in just a few metal mines, not many. Currently, the largest volume we see is still in coal mines. As for aggregates, let me explain this situation. Yangtze Four Blogs, please add any supplements if needed.
Hu Sibo
Let me add something regarding the issue with larger mines. First, there are some short-term fluctuations, which are common in this industry. However, in the long term, there are several trends. One is the shift towards open-pit mining, including coal and even metal mines. We see an increasing number of potential clients turning to open-pit mining because minerals are becoming harder to extract.
Open-pit mining offers certain efficiencies in terms of extraction. Moreover, through unmanned solutions or new energy methods, there can be significant improvements in mining techniques. This is a long-term trend — the overall shift towards open-pit mining across mineral resources. For instance, traditionally, coal mining had more underground operations, but now, particularly in western energy development areas like Inner Mongolia, there's an increasing reliance on open-pit mining. Therefore, humanity’s usage of minerals remains relatively predictable over the long term.
So although the mining industry may experience fluctuations in mineral output, in the long run, there may still be some intrinsic value to explore.
Returning to your first question, Professor Shen, about how we continuously iterate and upgrade to maintain our ability to scale. It’s very important, of course, to focus on product standardization, including in the mining sector. Our unmanned mining truck platform creates a certain cost advantage, which is one key direction we aim to focus on this year. This includes collaboration with the supply chain and ecosystem partners such as suppliers, original equipment manufacturers (OEMs), and sensor providers to strengthen our overall leadership position.
However, the mining industry still has numerous opportunities for customization, which helps maintain our competitive edge in this sector, right?
Nowadays, AI methodologies — whether large models or vision-based models — offer more opportunities to create highly efficient customized solutions. Our expertise in specialized industrial scenarios allows us to serve more customers effectively, making this capability extremely important.
Our delivery and organizational efficiency continues to improve. Now, basically, once the vehicles arrive at the mine, it takes about one to two weeks for the mine to be integrated into regular operations. Of course, the complexity varies from mine to mine. There are large coal mines, cement sand as aggregate, and we're seeing an increasing number of efficient deliveries that can be deployed efficiently across mines with varying levels of complexity.
Lastly, overseas markets, especially given different standards in overseas markets, product certification, and service standard systems—these are areas we will focus on building this year.
Ma Wei
Let me add a couple more points here. Regarding the future growth of our technology insurance that I just mentioned, I was only referring to this year. As General Manager Xu Ming also pointed out, the market potential is enormous because the volumes are very high. This is something we commonly see in industrial revolutions—it may take longer than you expect, but sometimes it happens faster. Once it explodes, the speed far exceeds that of the mining sector since every vehicle running on the road, including light and heavy trucks and commercial vehicles, requires this. Currently, we see this as a market worth hundreds of billions.
As Si Bo just mentioned, when discussing how to scale up, product standardization is key. We adopt a decoupling approach: standardized vehicles, identical for each mine regardless of size. However, the software system for the metaverse mine is customized, resolved through digital twin technology for efficiency. This addresses the long customization cycles of hardware while allowing faster software customization by decoupling these elements, enabling rapid and large-scale deployment with efficient delivery. That's what I wanted to share.
Shen Xu
Thank you, thank you management for the detailed answers. I wish the company even stronger performance in 2026. Thank you.
Xu Min
Alright, thank you for the question, and thanks to Teacher Ma and General Manager Si Bo. Everyone can continue asking questions.
Li Yuhua
Hello to all the management team, I am Li Yuhua from the UBS Group machinery team. We have always been highly focused on mining machinery and believe that unmanned and intelligent operations will be a key trend in the future. Therefore, it is a great honor to personally seek your advice.
My question is this: I noticed that our company, in addition to focusing on the unmanned operations in mining, has also explored other sectors, including what was mentioned earlier by the leadership regarding trunk logistics and smart ports. So, I would like to ask how replicable our smart mining solutions are when applied to these other areas, compared to our unmanned mining initiatives? Additionally, how do we view the business potential of unmanned operations outside the mining sector?
Hu Sibo
Let me explain. When it comes to mining, especially heavy commercial vehicles, some might think that point-to-point transportation follows fixed routes. However, we see that the situation is rather complex. In fact, we consider mining to potentially be one of the most challenging scenarios for heavy vehicle transportation, not a simple one.
Therefore, there are quite a few technologies that can be reused across other autonomous driving fields within commercial vehicles, such as motion control, perception under harsh weather conditions, various dispatching and operational algorithms required for industrial scenarios. These can indeed be transferred and reused.
For example, in our technology insurance business, those perception technologies or in rail transit, these are based on relatively complex and high-performance perception challenges, where we have developed certain products. Hence, we believe that in the future, with regulatory support, we will possess strong technical capabilities to address many commercial vehicle scenarios.
Of course, including what you mentioned about trunk logistics or smart ports, public road scenarios are undoubtedly large markets in the future. From the technological side, we have made long-term preparations and accumulated resources.
However, mining remains the fastest-growing core business area currently receiving maximum investment. The main challenge for autonomous trucks on open roads lies in regulatory uncertainty. Regulatory constraints remain a core issue. Large-scale L4 deployment will certainly take time. This is why we aim to penetrate this market through technology insurance, which offers clear commercial value by addressing specific industry pain points such as premiums and accident rates right now.
Additionally, the underlying structure of our business involves significant scheduling needs, particularly in multi-vehicle scenarios, utilizing V2X or V2V technology solutions. These allow us to extend our services and provide efficient deployment across different scenarios. Overall, this is how we plan to leverage our capabilities and deliver commercial value in potential future markets.
Ma Wei
Let me add a couple of points here. When we select each business, we still need to consider whether it can be based on a common technology and then form different decouplings. What we hope to see most is that this market is orthogonal, meaning they don’t affect each other, and it’s resilient. If one thing goes wrong, it shouldn't impact the other, right?
For example, it’s natural to think about closed mines. After excavation, you have to transport the materials out. Some use trains for large-scale trunk logistics, which involves open roads. Some routes are short, while others are long hauls. Currently, for short distances, our vehicles must be licensed, unlike mining machinery. Thus, there is more legal regulation for road-going vehicles.
Therefore, we believe that the technological forms are quite similar. We have various technological accumulations. Additionally, what can be implemented now—such as in some pilot lines—is where vehicle platooning requires V2X technology. That’s why our company has its own V2X technology; it's not something we bought. We have unique algorithms, and at the same time, we support double coupling. Now, with new standards being introduced, we're pushing forward.
Double coupling means a single truck can pull two containers, but currently, there hasn't been widespread approval for this. It has been in operation for a long time. However, double coupling has significant blind spots, which require high-performance perception systems to avoid accidents. We’ve already installed and tested these systems. Once these standards are broken through, we’ll be ready to deploy the same technology across different areas of urgent demand to find high-value applications. This is our basic approach.
Li Yuhua
Thank you very much, Dr. Ma and Dr. Hu, for your responses.
Xu Min
Thank you, Teacher Li, for your question. Everyone is welcome to continue asking questions.
Wang Haozhe
Hello to all the leaders at Dr. Ma's company. I’m Wang Haozhe, the chief analyst of machinery at Western Securities. Thank you for giving me the opportunity to ask a question.
I have two small questions on my end. The first one is that we can roughly see from the financial reports that by 2025, the revenue share of our entire autonomous driving-related business will significantly increase. Does this ratio mean that our entire company, whether at the strategic level or in terms of operational resources, has made a noticeable shift towards the autonomous driving business? Yes, that's the first question.
The second question is that Ma Bo just mentioned in the PPT the three major business strategies for the company’s future development. I would like to ask specifically how we should coordinate and enhance our subsequent V2X and intelligent perception businesses, along with our core autonomous driving business. How do we strengthen our integrated solution capabilities for vehicle-road-cloud systems? Thank you.
Xu Min
Alright, thank you for Mr. Wang’s question. Let me respond to that. Because unmanned mining trucks are currently in a phase of rapid volume growth. Whether it's due to policy support or mandatory policies, or considering the long-term market potential and the current urgent market demand, there is a fast replacement trend toward unmanned solutions.
As the leading company in this field, we definitely focus strategically on the unmanned mining sector in the short term. In terms of future revenue share, 80-90% will undoubtedly come from unmanned mining trucks.
Of course, regarding how to synergize V2X technology and intelligent perception technology with autonomous driving technology for mining trucks, I previously introduced that we have a strategy to deeply cultivate the intelligence and unmanned operations in mining.
In this scenario, deep intelligent and unmanned operations are involved. Any single technology has its own limitations and bottlenecks, just like in passenger vehicles. That's why you see many technical route disputes; each route may have its blind spots.
Therefore, we will use V2X and intelligent perception to address these gaps. For example, in many large northern route coal mines, communication infrastructure is relatively weak, causing no-network or weak-network situations. In such cases, your sensor performance can be affected.
At such times, vehicle-to-vehicle communication can solve related issues. This includes open-pit mines where, as you know, there can be dust, smoke, fog, rain, or snow. You also know from driving passenger cars that radars, including cameras and other sensors, can be affected under these conditions.
At this time, V2V technology can provide relevant supplements. As Dr. Hu mentioned earlier, when there are more and more unmanned vehicles, how will vehicles interact, coordinate, and negotiate with each other? This will also utilize V2V technology.
Regarding intelligent perception, it's the same. Currently, apart from open-pit mines, the underground mines are also moving towards intelligence and unmanned operations. Since the underground mine environment is more enclosed and narrow, with many turns and blind spots, the requirements for perception capabilities are actually higher.
As we previously mentioned, our intelligent perception products will also be promoted and applied in underground mines. Therefore, overall, we have a unified approach to this technology across all sites. Especially for the future deepening of intelligence and unmanned operations in the entire mining sector, we will leverage the advantages of our entire technical platform to establish an even more leading position. That is my response, thank you.
Wang Haozhe
Thank you for the explanation.
Xu Min
Alright, because today there are still many online investors attending the meeting, we will now move into the Q&A session for the online participants. The teleconference assistant will announce the method for asking questions. Thank you.
Operator
Hello everyone, if you would like to ask a question, please press the star key followed by the number one on your phone keypad. Press '*' first, then '1'. Please begin your question after the prompt tone. Thank you. Now, let’s invite Tang Xuxia from Guosen Securities to ask a question.
Tang Xuxia
Hello, can you hear me? Yes, good, thank you, management team. I am Tang Xuxia, Chief Automotive Analyst at Guosen Securities. Thank you very much.
Following Dr. Ma and Dr. Hu’s sharing, thank you, management team. Our question is that since we see significant market potential overseas, where labor costs are relatively high, the demand for unmanned mining trucks as a substitute is stronger than in the domestic market. We would like the management team to share their views on the overseas market and our product strategy. Thank you.
Hu Sibo
First of all, the company will also focus on deploying its technical brand and application implementation overseas this year. However, the rigid demand in overseas markets is indeed very large, but the pace and driving force are quite different from those in the domestic market.
Especially in China, including safety, there are now more mandatory policies, right? To solve the labor issue. Overseas, it mainly involves labor costs and management efficiency. They hope to resolve these through automation. Therefore, the profit margin overseas is definitely higher. That's why we hope to significantly increase our investment in overseas markets this year.
However, the overall pace is still different from that in the domestic market. Especially for the leading mining companies overseas, in the past few years, their scenarios have been relatively simple, even some transportation scenarios can't compare with our large-scale, complex operational scheduling needs in domestic open-pit mines that require mixed operations.
So overall, we can still see the need for this rigid demand, but the pace has already provided us with time for the iteration of our technology products. We believe a good approach is to go global together with China’s large mining enterprises, like our collaboration with Sinoma Mines overseas, utilizing their existing mining resources for deployment and technology implementation.
Tang Xuxia
Understood, understood, very clear. Thank you, management team, for addressing my question. Thank you.
Xu Min
Alright, thank you. Online investors can continue asking questions. Thank you.
Operator
Thank you, everyone. If you wish to ask a question, please press the star key followed by the number one on your phone keypad. Please wait for the prompt tone before starting your question. Next, let’s invite the representative from Everbright Securities to ask a question.
Amy
Thank you, management team. This is Amy from Everbright Auto. I really appreciate you taking my questions. I have two questions. First, I’d like to ask the management to share with us the details of a recent order for unmanned mining trucks, including the progress on overseas export orders.
The second question is that we’ve noticed some parts suppliers in the industry chain are transitioning and entering the L4 unmanned mining truck sector. As more players enter and competition intensifies, what will be the trend regarding our pricing and gross margin? Those are my two questions. Thank you, management team.
Xu Min
Alright, thank you for your questions, Mr. Li. Let me address these two questions. First, about the order situation – everyone has probably noticed the recent news that our company signed an order for 500 vehicles with Guangda Group. This is by far the largest single order in the unmanned mining truck sector that anyone can see.
Guangda Group is also the largest energy player in the Inner Mongolia region. In addition to this order, we are currently negotiating even larger single orders, so please stay tuned for updates.
As for the status of our overseas export orders, last year we worked with Taiwan Cement, one of our key clients mentioned earlier, who deployed 12 autonomous vehicles at their overseas mine site. The pricing there was significantly higher than in the domestic market because, as I previously explained, our autonomous driving technology does create real economic value for customers.
Therefore, our entire pricing model is tied to the cost of drivers. This year, we will see additional overseas projects and further cooperation developments, including preliminary discussions with major domestic and international mining enterprises.
Key regions include places like Australia, South America, and the Middle East, among others. That’s the update on our order situation.
As for the second question, which is a widely discussed concern about increased competition – first, intelligent and unmanned mining is indeed a high-value sector. People are gradually recognizing this, so it’s natural that more companies will enter the market. We view this as a normal market phenomenon and will certainly face this issue head-on.
However, let me explain first: there are certain inherent barriers in this sector. For instance, autonomous mining trucks may not be something many people have seen before. These autonomous mining trucks are extremely large, often weighing between 100 to 200 tons when loaded with cargo, and their tires alone are taller than a person.
Therefore, the difficulty of control is very high, and the center of gravity is also quite elevated. Consequently, compared to passenger vehicles, the requirements for perception and control are much higher. Thus, there are significant differences in some research and development directions.
Another aspect, starting from the perspective of scenarios, is that although people may think mines represent a closed environment and thus should be relatively simple, this is not the case. If you visit these mining sites and participate in our research, you'll see that the mine's environment is actually quite harsh. The roads lack proper markings and routes, resembling open roads with numerous rules and regulations.
Additionally, the road conditions and overall environment are relatively poor. Natural factors such as weather, dust pollution, and extreme weather events present frequent challenges. Furthermore, the complexity of the work surface and the variety of coal types make the operating environment particularly challenging.
In contrast, while open scenarios for passenger vehicles might have more corner cases, they aren't necessarily as difficult as those faced in mining environments.
The third point is that the industry has barriers. As providers of production tools to operators, this business is strongly B2B. In B2B contexts, customers have extremely high demands regarding product technical maturity and stability, which differs significantly from what people expect with passenger vehicles.
When driving personal vehicles, there is often considerable tolerance for issues like traffic jams or other disruptions. However, when providing production tools to clients, the stability of the technology must meet very high standards to ensure economic value.
As I mentioned earlier, the cost savings on drivers provided to clients come with a prerequisite: the operational efficiency of unmanned mining trucks must genuinely approach that of manned ones. It’s not just about achieving this efficiency with one vehicle; rather, it needs to be replicated across an entire fleet, especially as unmanned mining trucks become increasingly common.
Even if a single unmanned mining truck achieves the efficiency of a manned one, the real challenge lies in maintaining high operational efficiency when running hundreds of vehicles simultaneously within the confined environment of a mine. This requires continuous exploration of certain know-how in the R&D process.
Overall, if competitors want to enter this space and develop products with sufficiently mature technology that clients can accept, it will take considerable time. Of course, we ourselves are also making progress and iterating. As I mentioned earlier, deep intelligent and unmanned advancements in mining require ongoing effort.
There remains substantial value yet to be tapped, including in the field of unmanned mining trucks. Dr. Ma also mentioned improvements in our next-generation customized autonomous mining trucks, which feature enhanced high-value functionalities. Additionally, as I previously introduced, we aim to address blind spots and pain points in mines through V2X and other technologies.
So, all these efforts are actually aimed at enhancing the competitiveness of our products through rapid technological iteration. We are not standing still and waiting for competitors to come in and compete with us.
So, while there will be new participants entering the competition, we will continue to maintain our competitive edge and leading position. That's regarding the issue of competition.
Now, concerning the issue of gross margin, its impact is relatively small. The key is how to realize a product’s high value and keep it stable. We believe the core is that your value should be higher than the price, meaning the quantifiable value you create for customers.
Our current pricing foundation is basically based on the cost savings we provide to customers in terms of driver labor costs, which is around 50-60%. So, it has a solid pricing basis.
Therefore, from our business perspective, the overall price remains quite stable, and the gross margin hasn't been significantly affected. That concludes my response. Thank you.
Amy
Alright, thank you, Mr. Xu.
Xu Min
Alright, due to time constraints today, we'll move to the last Q&A session for online investors. Thank you.
Alright, thank you, management team. We also have a text-based question from the web. Analyst Lin Qixian from Shenwan Hongyuan asked about our earlier introduction regarding our company’s approach to unmanned driving in mining areas, where we primarily adopt a light-asset model, which also results in a higher gross margin.
The question is asking management whether the light-asset model will increasingly become the dominant trend in the industry. Thank you.
Xu Min
Alright, let me answer this question first because it is indeed a common concern. First of all, as a technology product-driven company, we adhere to the product delivery model. As I mentioned earlier while discussing the ecosystem, we empower our mining operation partners by delivering high-value products to our clients, creating value for them, and at the same time, we can achieve profitability on the product side.
The reason why we believe this asset-light model will eventually become the industry's mainstream is primarily that the operational or asset-heavy model is financially unsustainable. The unit price of mining trucks is relatively high, and if the volume continues to grow, adopting an asset-heavy or operational model would put immense pressure on the balance sheet.
Secondly, regarding the profitability model itself, you can see that many operational models have not achieved real profitability. In theory, since we focus on product delivery, we achieve profitability ourselves while also saving costs for our clients and operators.
In theory, if you can truly excel in operations by using your own products to handle both your work and your client’s, your profitability should be stronger. However, in reality, most companies in the industry that engage in heavy-asset operations have not achieved profitability—even failing to cover gross margins—highlighting several underlying issues.
One issue is that there may be high demands on the maturity and stability of your own technology. As I mentioned earlier, can you really achieve the efficiency level of manned driving?
Another aspect relates to the operation of mines, which involves various requirements and elements. How do you deal with mine owners? How do you manage the fleet of vehicles? And how do you address factors like someone previously mentioned—the influence of commodities—including the management of other equipment beyond autonomous vehicles?
There are numerous factors and requirements involved. Our clients and operators have been deeply rooted in the industry for decades, with substantial scale, highly efficient capabilities, and extensive experience. Therefore, as a high-tech company engaging in such operations, whether we could truly excel in these areas remains questionable, and we think it might be a significant challenge.
Therefore, based on the aspects discussed above, we believe that our asset-light model will certainly become the mainstream model in the future. Thank you.
Xu Min
Due to the time constraints today, our live interactive session will conclude here. Thank you all for your enthusiastic questions. With that, our conference today has officially ended. Once again, thank you all for attending, listening attentively, and participating actively.
If there are any further discussions or research needs afterward, please feel free to reach out to our investor relations team. Thank you all once again. Thank you.
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