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Nine Questions, Nine Answers | SoundTech's 2025 Earnings Conference: The Nine Key Issues Investors Care About Are All Here

April 10,$VOICECOMM (02495.HK)$successfully held the 2025 earnings release conference. The company comprehensively reviewed the Q&A session from the event, presenting it in the format ofNine Questions and Nine Answersto provide a full decoding of Shengtong Technology’s growth logic and technological development roadmap.

🎤 Interactive Guest:

Tang Jinghua | Chairman, SoundConnect Technology

Lian Zhuyan | Head of the Board Office, SoundConnect Technology

Note: The following content is based on the Q&A session from SoundConnect Technology's earnings release conference. While preserving the original meaning as much as possible, the phrasing has been moderately optimized.

Q1. On performance and future guidance

Question: We have observed significant fundamental improvement for the company in 2025, especially with operating cash flow turning positive. Could management provide a detailed breakdown of the core drivers behind this? Additionally, based on the current order situation, could management share some guidance for the next two to three years?

Answer (Tang Jinghua, Chairman of SoundConnect Technology):In 2025, the overall operating condition of the company has indeed continued to improve. Regarding the turnaround in profits, I would like to further explain:During previous periods, our annual operating profits were actually positive.The significant loss shown in the 2024 financial statements was mainly due to the existence of ratchet agreements with investors during the pre-IPO Series A, B, and C financing rounds. According to international accounting standards, the fair value changes of these convertible redeemable preferred shares were recorded as non-operating book losses. Excluding this impact, the actual operating profit for 2024 was approximately 150 million yuan.

In 2025, on the basis that our profit scale remained largely flat compared to the previous year, we achieved growth in both sales and gross profit.More significantly, our operating cash flow successfully turned positive.Last year, the overall gross margin reached approximately 55%, with the majority of contributions coming from proprietary software products. The proportion of third-party hardware has been declining year by year. The maturation and increased autonomy of our proprietary product system are the fundamental drivers behind the substantial improvement in cash flow.

Looking ahead to the next two to three years, we believe the entire market is in the midst of a massive wave of transition from traditional digitalization to artificial intelligence, with demand accelerating rapidly. Shengtong Technology, positioned in this fast-growing sector, possesses solid technological advantages, deep industry penetration, and an abundance of benchmark case studies. We are confident that Shengtong Technology's future growth rate will continue to outpace the industry average.

Q2. On R&D Investment and the Direction of Technological Evolution

Question: We noticed a significant increase in the company’s R&D spending in 2025. Could management elaborate on the reasons behind this change? What does the investment activity cash flow reveal about the purchase of intangible assets? Additionally, what is the overall pace of the company’s future R&D investment and its technological development direction?

Answer (Lian Zhuyan, Head of the Board Office of Shengtong Technology):The substantial increase in R&D investment in 2025 was primarily driven by the following three factors:

Infrastructure Upgrade:To support increasingly complex R&D projects and the technological iteration of trusted interactive intelligence, we have increased our investment in high-performance software and hardware infrastructure, which naturally led to a rise in related depreciation and amortization expenses.

Introduction of professional services: In response to specific technical needs and project requirements, we have introduced more professional technical services to enhance R&D efficiency and ensure the quality of project delivery.

Talent team building: We are actively attracting high-end talent in the AI field to optimize the structure of our R&D team. We believe this is a key investment in building the company's long-term core competitiveness.

Regarding the purchase of intangible assets, it is mainly driven by project needs. We strategically acquired cutting-edge software tools such as CV development platforms, digital twin platforms, and supercomputing management platforms. By introducing mature external products, we strengthen non-core R&D processes, thereby shortening the development cycle and optimizing overall product capabilities.

Answer (Tang Jinghua, Chairman of Shengtong Technology): In terms of technological direction, we will steadfastly advance in the direction of 'trustworthy interactive intelligence.' Looking back at our technological evolution: starting with functional modules in 2016, we moved on to technology integration in 2021. In 2023, to improve the accuracy and explainability of AI responses, we adopted a fusion approach of 'large models + knowledge graphs.' In 2024, we further evolved to multimodal integration.

By 2025, we achieved two major technological leaps: first, we built and refinedintelligent agent technologyand second, initiatedSustainable learning system. Unlike traditional one-time pre-trained models, we are committed to achieving dynamic improvement, self-learning, parameter optimization, and knowledge distillation for the model, ultimately forming an AI brain with memory capabilities that can continuously evolve online. By 2026, we will continue to promote the effective integration of multiple models and extend agent technology into more application scenarios, creating more benchmark cases so that AI can not only 'chat' but also perform complex tasks effectively over the long term.

In terms of R&D investment rhythm,we will continue to maintain a prudent strategy. One of the core purposes of the new round of financing currently being promoted by the company is also to continuously increase R&D investment.

Q3. Regarding accounts receivable management and collection effectiveness

Question: We noticed that the company's trade receivables increased from 1.09 billion yuan in the first half of 2025 to 1.15 billion yuan by the end of the year. What were the main reasons for this significant growth? What specific measures has the company taken to improve collection efficiency, and what achievements have been made?

Answer (Lian Zhuyan, Head of SoundTech's Board Office):

First, the increase in trade receivables aligns with the rapid growth of the company’s business orders and revenue. Structurally, the quality of our accounts receivable is very healthy, with 77.3% of receivables being within one year, indicating overall controllable risk. Moreover, a significant portion of our major clients consists of government departments, which, despite having relatively longer settlement cycles, involve large amounts, high creditworthiness, and extremely low bad debt risks, providing solid assurance for the security of receivables.

To continuously optimize collection efficiency, we have implemented a set of 'combined measures':

Business model transformation: Guiding customers to transition from traditional project-based purchases to platform subscriptions and continuous service models not only enhances the stability of revenue but also significantly shortens the cash flow recovery cycle.

Strengthen internal assessments: Closely link the performance evaluation of the sales team with project collections, stimulating collection momentum from the source.

Implement multiple measures for collections: Adopt a tiered collection approach for existing accounts receivable (communication, legal letters, arbitration/legal proceedings when necessary).

Strictly control quality risks: Establish a dynamic credit management system, prudently assess large or credit-alert customers, and control risks incrementally.

The net operating cash flow for the full year of 2025 successfully turned positive to 213 million yuan; as of the end of March this year, the company has cumulatively collected over 300 million yuan. In the future, we will further optimize the accounts receivable structure through meticulous management.

Q4. Regarding the growth engines of the six core scenarios

Question: The company's trusted intelligent agents are currently mainly applied in six core scenarios: urban management and administration, automotive and transportation, communications, finance, healthcare, and energy management. What are the growth plans for each scenario in the future? Which scenarios will be the primary growth drivers?

Answer (Tang Jinghua, Chairman of Shengtong Technology):

These six industries are our core focus. Specifically:

First Tier (Core Growth Engine):Automotive and traffic management. This has been the fastest-growing sector since 2021, accounting for approximately 25% of the company's total sales last year. With rapid iterations in smart connectivity, new energy vehicles, and autonomous driving technologies, this industry has a large base and will remain our top priority in the next two to three years.

Second Tier (Emerging Forces for Key Breakthroughs):New energy and healthcare. These were identified as key areas for breakthrough in 2023, with scaled project implementations achieved by 2025. Both fields are closely related to public welfare. Although their systematization levels currently lag behind the automotive industry, they hold immense market potential and are critical areas for us to explore incremental growth.

Third Tier (Stable Foundation and Pillar):Government services, finance, and telecommunications. Government services have always been the cornerstone of Shengtong Technology’s highest market share and largest revenue contribution; the finance and telecommunications sectors are relatively stable at present. We are actively exploring new applications within existing markets, such as leveraging AI to enhance banking risk control or integrating products like intelligent electronic name badges into operators' standardized systems.

Q5. On the Moat in the Autonomous Driving Field

Question: The company’s applications in the autonomous driving field have made substantial progress (e.g., the Mianyang project, winning the Ezhou Airport project bid). What is the company’s core competitiveness in this field? What are the future development plans?

Answer (Tang Jinghua, Chairman of Shengtong Technology):Our core advantages can be summarized in three points:

Full-stack technology integration capability: Shengtong has nearly 20 years of industry experience in the automotive and urban transportation sectors. In today’s intelligent connected and autonomous driving scenarios, we are able to provide full-stack integration of digital twins, comprehensive scheduling, vehicle-road coordination, and even single-vehicle intelligence. For instance, using AI to optimize traffic management requires seamless connectivity between urban sensors, various vehicles, command centers, and government systems. This ability to integrate across multiple scenarios is our unique competitive barrier.

Dual-driven by 'vehicle-road coordination + single-vehicle intelligence': Since 2021, we have been investing in core technology companies related to autonomous driving. In 2023, we also formed an internal team to develop single-vehicle intelligence independently. Currently, there are very few companies in the domestic market that can simultaneously research and commercially implement both 'vehicle-road coordination' and 'single-vehicle intelligence' core technologies.

Closed-loop service with 'technology as the core, building an ecosystem': Clients often need more than just a technology platform—they require a complete operational solution. Within Shengtong's ecosystem, we have established a full industrial chain through holding or participating in relevant enterprises, covering investment and construction, technology implementation, safety officer management, vehicle retrofitting maintenance, and personnel training. This provides clients with one-stop closed-loop services. It is also a strategic direction we will continue to strengthen.

Q6. Regarding stock repurchases and market capitalization management

Question: The company's stock price has recently been at a historically low level. Does the company have any plans for stock repurchases?

Answer (Lian Zhuyan, Head of the Board Office of Shengtong Technology):The company’s fundamentals continue to improve, with operating cash flow turning positive in 2025, a significant increase in net profit, and record-high orders on hand. These all provide solid support for the company's long-term intrinsic value. Regarding stock repurchases,we have already approved the H-share repurchase proposal at the shareholders' meeting at the end of January 2026 and obtained authorization. The shares proposed for repurchase this time will mainly be used for employee shareholding plans and equity incentives in the future. This will not only help effectively attract and retain core talent but also deeply align employees’ interests with the company’s long-term development, demonstrating management’s strong confidence in the company’s future.

Q7. Overseas Strategy and Progress in the Middle East Market

Question: What is the status of the company’s overseas market strategy and its latest progress? Has the business in the Middle East been affected by recent geopolitical conflicts?

Answer (Tang Jinghua, Chairman of Shengtong Technology):The company’s overseas strategy remains firmly focused on markets along the 'Belt and Road' initiative.In the Southeast Asian market,this year will be our key focus. We are not only exporting excellent technology products but also deeply integrating into local customers’ marketing and service systems while actively expanding into new types of businesses such as government services.Regarding the Middle Eastern market, frankly speaking, in the short term, the establishment of our subsidiaries and the implementation of projects in places like Abu Dhabi and Saudi Arabia have been impacted by some geopolitical conflicts. Considering the absolute safety of our employees, colleagues in the Middle East have temporarily withdrawn, and some projects are on hold. However, looking at the long term, we remain highly optimistic about the Middle Eastern market, whose strategic importance for long-term development will not be shaken.

Q8. Regarding equity structure and existing shareholder exit

Question: Secondary market investors are highly concerned about the company's equity structure and liquidity. Please provide a detailed introduction to the current situation of existing shareholder exits.

Answer (Lian Zhuyan, Head of Shengtong Technology's Board Office):The company’s total share capital is approximately 35.5 million shares, of which about 28.5 million H-shares are tradable, accounting for about 80% of the floating shares. As of the end of March 2026, early shareholders have cumulatively exited more than 7 million shares. We believe that with the continuous expansion of the floating share pool and the gradual increase in secondary market trading activity, the company’s equity structure will become more optimized, and improved liquidity will help attract more long-term capital to focus on and participate in Shengtong Technology’s value growth.

Q9. Progress on the latest private placement matter

Question: We noted that the company issued a placement announcement in January 2026. Please introduce the background, latest progress, and capital usage plan for this private placement.

Answer (Lian Zhuyan, Head of Shengtong Technology's Board Office):Background: The AI industry is in a period of rapid evolution. As a leader in trusted interactive intelligence, we must maintain high-intensity R&D investment in cutting-edge areas such as agent platforms and multimodal interaction to solidify our competitive edge.Progress and Use: The placement is currently proceeding under standard procedures. For the latest updates, please refer to the company's announcements. Regarding the use of raised funds:50% will be specifically allocated for R&D investment, comprehensively enhancing the innovation capabilities in trusted intelligent interaction technology and intelligent agents; additionally,50% will be used to supplement working capital and for general corporate purposes, ensuring the high-quality daily operations and rapid business expansion of the company.

We thank all investors for their concern and support for the company’s development. We also appreciate the valuable suggestions provided. If you have further questions or wish to engage in further discussions, please feel free to contact us via the company IR email at ir@voicecomm.cn. Thank you all!

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