Huaqin Technology

was live · ·

Huaqin Technology Q1 2026 Earnings Presentation

[AI Key Points Summary]

Financial performance

- Revenue in the first quarter of 2026 was 40.75 billion yuan, a year-on-year increase of 16.4%, with net profit attributable to shareholders at 1.06 billion yuan, up 26% year-on-year

- Overall gross margin stood at 8.5%, showing continuous quarterly growth since Q2 2025, reflecting an ongoing improvement in profitability

- Operating cash flow contributed positively with 580 million yuan, while R&D expenses reached 1.65 billion yuan, increasing by 20% year-on-year

- Return on equity (ROE) was 4%, annualized to 16.1%, representing a 1.4 percentage point increase year-on-year

Business Progress

- Mobile terminal business (smartphones, tablets, wearables) grew by over 25% year-on-year, with continuous growth in shipment volumes and revenue across all categories

- AIoT business increased by over 50% year-on-year, notebook business grew by over 30% year-on-year, with shipments exceeding 2 million units in March alone

- Automotive electronics revenue exceeded 1 billion yuan in 2025, while robotics business completed development and mass production delivery of data acquisition robots

- Listed successfully on the Main Board of the Hong Kong Stock Exchange on April 23, with an issuance size of 580 million US dollars

Guidance for next quarter’s performance

- Q2 performance is expected to maintain steady growth, with overall growth in the second half of the year being even higher

- Full-year revenue is expected to grow by more than 15%, with profit growth outpacing revenue growth

- Data center business is projected to achieve a full-year growth rate between 30% and 50%, with high growth anticipated in the second half of the year

Supernode product revenue is expected to exceed 10 billion yuan for the full year, with small-batch shipments starting in Q2 and mass shipments in the second half of the year

Opportunity

AI technology is deeply penetrating smart wearable products, with AIoT categories continuing to diversify, including next-generation AI infrastructure products such as supernodes

Overseas manufacturing bases in Vietnam, Mexico, and India are addressing geopolitical uncertainties while staying close to end consumer markets

Strategic partnerships have been established with upstream and downstream key component suppliers to promote industry standardization

Vertical integration and horizontal expansion have been achieved through acquisitions, including the completion of purchases of precision structural component companies like Huayu, Xiqin, and Chunqin

Risk

- The consumer electronics industry is affected by fluctuations in the prices of upstream materials such as memory chips, putting pressure on end-user demand

- Foreign exchange gains and losses risk, although naturally hedged through domestic and overseas operations, still require multiple approaches to manage currency risks

- Data business may be impacted by the transition cycle of domestic GPU platforms, potentially affecting business continuity

- Increased market competition requires maintaining market share through comprehensive competitiveness and a diversified customer base

[AI Conference Record]

Li Yutao

First Quarter 2026 Earnings Presentation. I am Li Yutao, Vice President and Board Secretary of Huaqin Technology. I am very pleased to meet all of you here. Chairman and General Manager Qiu Wensheng, Director and Financial Officer Xi Pinghua, and Independent Director Hu Saixiong will participate online in the discussion and exchange of this earnings presentation. We will carefully answer your questions, and we sincerely welcome you to provide your valuable opinions and suggestions for the future development of Huaqin Technology.

Here, I would also like to express special thanks to the SSE Roadshow Center of the Shanghai Stock Exchange for providing us with this platform, allowing us to have in-depth exchanges with a wide range of investors. Now, we invite all investors to watch our company’s promotional video to learn about our company profile and business development.

Founded in Shanghai, China, in 2005, Huaqin Technology has grown from a start-up into a globally leading technology-driven smart product platform company over two decades. With the mission of improving communication and life, we deeply understand and recognize the diverse multi-scenario product needs of global brand customers, building a 'three plus N plus three' smart product matrix.

Three pillar products: smartphones plus N, laptops plus N, and AI infrastructure plus N, expanding into three innovative businesses: automotive electronics, robotics, and software services. As one of the ODM platforms with the richest product categories globally, it is the only ODM manufacturer that has established a leading market position simultaneously in smartphones, tablets, smart wearables, laptops, and AI infrastructure.

Our global clientele includes leaders across mobile terminal brands, PC brands, cloud services, and automotive manufacturers. We continuously create leading value for customers with diversified products and global operations. We have accumulated and built unique Huaqin ODM platform capabilities, holding leading advantages in operations, R&D, manufacturing, and structural components.

Efficient operations to build full-process digital capabilities, boasting industry-leading operational efficiency and global delivery capacity, ensuring swift responses in complex environments, empowering clients to seize opportunities. With five major R&D centers and nearly 20,000 R&D technicians, continuous investments in R&D are supported by the IPD integrated product development process and X lab explorations, achieving high-efficiency cross-platform R&D collaboration and technology transfer, constantly driving product innovation and rapid iteration.

Advanced manufacturing presence with China plus VMI global manufacturing bases, adhering to multi-site production and flexible delivery models, fostering automation, digitization, lean practices, and green initiatives at its core. Vertical integration of precision components consolidates mold and precision manufacturing resources, enhancing collaborative structural component development through supply chain integration and horizontal acquisitions, improving supply chain stability, expanding the product portfolio, and boosting global competitiveness.

Huaqin Technology embeds long-termism into its corporate DNA, upholding the belief that hard work leads to happiness. Each year, it attracts and nurtures over 2,000 outstanding graduates from home and abroad, providing them with sustainable growth platforms and long-term incentive programs. The company is led by four seasoned founders, leveraging an agile operational mechanism of small groups within large business units to ensure efficient decision-making and precise strategy execution.

We firmly believe that the value of technology lies not only in innovation but also in care for people and the planet. We care for the Earth, empower society, and respect talent. Huaqin Technology will continue to deepen its 'Three Plus N Plus Three' strategy, strengthen its global network, remain technology-driven, and strive to become a technologically advanced and trusted smart product platform, enhancing communication and life for people.

Welcome back to the live broadcast, thank you all for watching, and we believe everyone now has a better understanding of Huaqin Technology. Next, I will briefly introduce the company's business layout. The company has built a 'Three Plus N Plus Three' smart product platform, which includes three 'One Plus N' product portfolios and three strategic directions.

The first 'One Plus N' focuses on smartphones, covering personal and home digital terminal products such as tablets, wearables, and AIoT. The second 'One Plus N' centers on laptops, including productivity tools like desktops, all-in-ones, and printers. The third 'One Plus N' revolves around servers, encompassing data center infrastructure products like AI servers, supernodes, general servers, and switches.

At the same time, the company is actively expanding into three strategic innovation businesses: automotive electronics, robotics, and software. The 'Three Plus N Plus Three' business layout positions the company as a platform enterprise for smart products. We serve top-tier global tech companies, including mobile terminal clients, notebook clients, cloud computing clients, enterprise clients, automotive clients, and industry clients.

We are one of the most diverse ODM platforms for smart products globally, and the only ODM manufacturer to establish leading market positions across smartphones, tablets, smart wearables, laptops, and data infrastructure products.

This is the evolutionary path of Huaqin’s diversified product portfolio. The company is continuously exploring its second growth curve. Starting with mobile phones in 2005, we expanded into laptops in 2015, laid out our data center strategy in 2017, entered the automotive electronics field in 2021, and made forward-looking moves into robotics in 2025. In facing every new business expansion, Huaqin Technology maintains great strategic patience, reinforcing capabilities through long-term commitment, building today’s diversified and multidimensional product structure, and laying a solid foundation for sustained growth.

Next, I will report on the company’s Q1 2026 performance. Huaqin Technology achieved revenue of 40.75 billion in Q1 2026, a year-over-year increase of 16.4%, with net profit attributable to shareholders reaching 1.06 billion, a year-over-year growth of 26%. We have maintained strong momentum, with the company’s overall gross margin at 8.5% in Q1, steadily increasing quarter by quarter since Q2 2025. Our profitability continues to improve.

The company's operating cash flow for the first quarter was a positive contribution of 580 million, achieving synchronized and steady growth in revenue, profit, and cash flow, with continuous optimization of operational quality. The company has maintained steady investment in R&D, with R&D expenses reaching 1.65 billion in the first quarter, a year-on-year increase of 20%. Huaqin Technology has consistently ensured the long-term high-quality growth of our business performance through R&D design, supply chain resource integration, and product portfolio optimization.

By the end of the first quarter, the company's total assets reached 103.6 billion, with attributable net assets of 26.77 billion, laying a solid foundation for the company’s future continuous business growth. Meanwhile, the company's return on equity (ROE) for the first quarter was 4%, with an annualized ROE of 16.1%, increasing by 1.4 percentage points year-on-year, showcasing our high efficiency in shareholder capital appreciation.

To fully support the company's '3+N+3' business strategy, Huaqin Technology has established a '1+5+5' global industrial layout. Our company headquarters is in Shanghai, and we currently have five R&D centers domestically in Shanghai, Dongguan, NamCheong, Xi'an, and Wuxi. The company has built a global manufacturing layout called 'China plus VMI,' with two major domestic manufacturing bases in Dongguan and NamCheong.

To meet the diverse delivery needs of global customers, the company has deployed three overseas manufacturing bases in Vietnam, Mexico, and India, and these overseas premium production capacities have become a core competitive advantage. The company has also achieved vertical integration and horizontal expansion within the industry through acquisitions, completing the acquisition of three precision structural component companies: Huayu, Xiqin, and Chunqin. Additionally, we acquired Yiluda and Kaoqin Intelligent Robotics to expand into new customer segments and product lines, with all post-acquisition performances showing favorable growth.

Next, let us further focus on our global manufacturing layout. Our domestic manufacturing centers have achieved specialized division of labor; the NamCheong manufacturing center covers notebooks, AIoT, and mobile terminal products, while the Dongguan manufacturing center focuses on data center infrastructure, automotive electronics, and mobile terminal businesses. Our overseas VMI bases include Vietnam, Mexico, and India, efficiently supporting global regional deliveries, addressing geopolitical uncertainties and diverse customer demands, and getting closer to end consumer markets. Currently, all overseas manufacturing centers have achieved multi-category scaled mass production and delivery.

Huaqin Technology has been deeply engaged in the smart product field for twenty years. Our company's platform capabilities are reflected in four core dimensions: ODMM—operations, R&D, manufacturing, and precision structural components. The first 'O' in ODMM stands for our highly efficient operations, where we possess industry-leading operational efficiency and global delivery capabilities, particularly with end-to-end digital processes. We have built an intelligent manufacturing logistics system and a globally integrated warehousing and distribution network, enabling efficient operational management to help clients seize market-first advantages more quickly.

The second 'D' represents R&D and design. Over the past twenty years, the company has accumulated cross-system, cross-platform, and cross-product R&D capabilities, allowing us to horizontally migrate core technologies to enhance R&D efficiency and product innovation. We implement the IPD product development process, which accommodates multi-category and multi-product line parallel R&D, ensuring the company remains large yet well-organized.

The third 'M' represents our advanced manufacturing capabilities. We have long adhered to a model of multi-base manufacturing combined with flexible production and delivery. We possess intelligent manufacturing capabilities centered around automation, digitalization, lean production, and green initiatives, meeting the diverse delivery needs of global customers with high quality and efficiency.

The final 'M' represents our precision structural components, a key element of our core competitiveness. Our mold design and precision manufacturing capabilities have reached internationally leading levels. By acquiring precision mold factories, we have strengthened the collaborative development of complete machines and structural components, continuously enhancing core technology barriers and overall machine cost competitiveness. At the same time, we actively promote vertical integration within the industry, leveraging complementary strengths with partners to optimize industrial synergy effects.

Below, I will introduce the contents of several major business segments one by one. First, our mobile terminal business covers three core categories: smartphones, tablets, and smart wearables. By 2025, our shipments and revenues in each category will achieve continuous growth, maintaining our position as an industry leader.

Firstly, in the smartphone sector, the company is the world's largest smartphone ODM manufacturer, and its shipment volume remained the highest globally in the ODM segment in 2025. In the first quarter of 2026, despite certain pressures on end-user demand in the industry due to price fluctuations of upstream materials such as memory chips, the company consistently maintained a high market share and steady business growth by leveraging its comprehensive competitiveness and diversified client base.

Currently, the penetration rate of ODM in the industry is further increasing, with market concentration among leading manufacturers continuing to rise. Relying on its deep R&D, manufacturing, supply chain management, and quality control capabilities, combined with economies of scale and cost advantages, the company will continue to deepen strategic cooperation with key clients, further increase its market share, and consolidate its position as an industry leader.

In the tablet computer sector, the company ranks first globally in ODM shipments, with a market share close to 40%. In the first quarter of 2026, we continued the growth trend from 2025, maintaining our leading position in the tablet field. Leveraging efficient synergies with the smartphone business in terms of customer resources, production processes, and supply chain systems, the company continuously solidifies its status as a core supplier for top-tier domestic and international brands, with shipments expected to steadily increase.

In the smart wearable devices sector, the company is also the world's largest ODM manufacturer for smart wearables. Shipments in 2025 and the first quarter of 2026 achieved rapid growth, with customer cooperation becoming increasingly sticky. As brand customers actively expand their smart wearable product offerings and AI technology penetrates deeply, we leverage ecosystem synergies across various terminal devices to continually upgrade cross-device collaborative experiences. The company will further consolidate its leading position in sub-sectors like smartwatches, fitness bands, wireless earbuds, and over-ear headphones, deepen full-category cooperation with clients, and maintain steady shipment growth moving forward.

In the AIoT space, the company is one of the ODM manufacturers with the most comprehensive AIoT scenario coverage in the industry. In 2025, the company’s AIoT business spanned diverse emerging smart hardware categories such as smart home devices, XR, and gaming hardware, covering products like cameras, smart speakers, handheld gaming consoles, digital photo frames, and XR devices.

As global AI technology accelerates in iteration and AIoT product categories become more diverse, the industry has vast growth potential. With its platform-oriented positioning, the company can quickly launch highly competitive AIoT products, fully capitalizing on opportunities brought by AI-driven intelligent upgrades. In the first quarter of 2026, multiple products supplied to overseas major clients, including smart home devices, XR, and gaming consoles, continued to achieve strong revenue growth.

Moving forward, the company will enhance product innovation through AI-enabled end-device interconnectivity, maintain close technical collaboration with clients, and proactively invest in forward-looking technological research. This will provide clients with a wider range of product portfolios and business cooperation models, contributing to sustainable revenue growth.

Next, in the notebook business, the company’s personal computer shipments and revenue in 2025 continued to outpace industry growth, with market share and ranking steadily improving. Despite facing industry pressures caused by rising memory chip prices, the company continues to gain higher market shares within the industry and among clients due to its leading product technology capabilities and overall efficiency.

This March, the company achieved a single-month notebook shipment volume exceeding two million units, and the first quarter as a whole maintained very rapid growth. The company has built a full-range matrix of personal computer products, covering laptops, all-in-one PCs, desktops, printers, and computer peripherals. We have established long-term stable partnerships with global leading brand clients, continuously optimizing our client structure and steadily expanding our market share.

Leveraging the product innovation capabilities of smartphone ODM and the positioning within the upstream and downstream supply chains, the company is accelerating PC product iteration and innovation. By crafting lightweight, cool-running, and durable products, we are continuously improving R&D efficiency and achieving rapid scaling. Following the successful expansion of key notebook clients, the company will further strengthen its leading position in the global notebook ODM industry.

In the data business sector, against the backdrop of high prosperity in AI-driven computing power infrastructure in 2025, our company's data business revenue maintained rapid growth, and our market share among leading CSP cloud service providers continued to increase. Huapont Technology has built a full-range product portfolio including AI servers, supernodes, general servers, switches, and storage servers. Among major CSP cloud service provider customers, we have established a core supplier position while continuously expanding into industry and channel market clients.

The company's data business has consecutively achieved exponential growth over the past three years, with our annual revenue exceeding 40 billion in 2025. Following the switch to domestic GPUs in the second half of last year, combined with the continued strength of Huapont’s full-range product portfolio, we have seen quarter-over-quarter growth. In the second half of this year, our data business is expected to grow even more rapidly.

Targeting overseas and domestic computing platforms and product forms, by leveraging our cross-platform R&D design capabilities, we have created strategic advantages in technology to meet the rapidly growing and diverse needs of various customers in the data center field. Additionally, the company continues to deepen collaboration with downstream customers on supernode products, ensuring our leading position through pre-research and product shipments.

The company continues to adhere to a dual-driven strategy for CSP and industry clients, fully utilizing our full-stack delivery advantages in computing, networking, and node products. Through cross-platform R&D design capabilities, we achieve simultaneous leadership in scale, technology, and efficiency across various data center products.

Next is our strategic innovation business, which mainly covers automotive electronics, robotics, and software businesses. In the first quarter, our innovative business revenue also doubled. First, our automotive electronics business is a key strategic focus for the company. With the ongoing penetration of vehicle electrification and intelligence, the automotive electronics sector presents vast opportunities.

The company’s automotive electronics revenue grew exponentially in 2025, and we have now built up comprehensive in-house capabilities covering hardware, software, HMI, testing, and more. We have established a vehicle-grade professional and large-scale manufacturing center. On the product side, we have made critical breakthroughs and scaled deliveries in core product lines such as smart cockpits, advanced driver-assistance systems (ADAS), body domain, and powertrain domain.

We continue to deepen cooperation with traditional automakers and new energy vehicle manufacturers both domestically and internationally. Major global automakers have conducted continuous project定点 and certifications, enriching our client matrix and solidifying our status as a core supplier. In terms of manufacturing, our vehicle-grade production capabilities are industry-leading. Furthermore, through innovations in software, our self-designed multi-platform adaptive cockpit software system has been highly recognized by customers.

Going forward, the company will continue to strengthen its business foundation, expand high-quality clients both domestically and overseas, enhance product portfolios and industrial chain synergy, and steadily increase market share and industry influence. Our core competitive advantages—technological innovation, high reliability, and efficient delivery—will provide strong momentum for long-term growth.

Next, our new business refers to our robotics operations, which will be a key area for the company starting in 2025, representing our second growth curve. As robotics hardware and software technologies continue to advance alongside deep AI integration, application scenarios are rapidly expanding, offering significant industry growth potential.

Leveraging long-term accumulated R&D, manufacturing, and supply chain advantages from the consumer electronics field, we fully utilize hardware platforms, system optimization, and computing power support. We have formed a specialized robotics R&D team and built an end-to-end development chain ranging from core components to complete robotic systems. Our goal is to become a leading full-stack robotics solutions provider in the 3C manufacturing sector.

Huaqin Technology has a wealth of global manufacturing scenarios and data accumulation. The current focus is on the research and development of industrial wheeled robots to enhance production efficiency. In the field of data collection robots, we leverage our technical and platform advantages to rapidly expand our customer base and achieve large-scale shipments. In the home cleaning robot sector, we continue to broaden our clientele and strengthen competitiveness while steadily advancing the R&D iteration of humanoid robots and proactively laying out strategies for cutting-edge sectors.

Additionally, the company provides large-scale manufacturing services to multiple robotics enterprises, continuously expanding production capacity and delivery capabilities while improving the business ecosystem layout for robots.

Finally, in the software business domain, based on the company’s technological accumulation and intelligent product platform strategy, we are building an all-encompassing software service ecosystem for downstream industries such as consumer electronics, automotive electronics, and smart industry. We provide customized solutions, optimization services, technical evaluations, and technical support tailored to various operating system environments for different clients. By 2025, the software business has contributed to revenue, scale, and profit growth.

The company will continue to leverage its experience in system-level software services across multi-category hardware platforms, further expanding software development operations to form a synergistic pattern with hardware businesses, scaling up operations, and achieving year-on-year rapid growth.

On this occasion, I’d like to share with you that the company's H-share successfully listed on the Main Board of the Hong Kong Stock Exchange on April 23. The total issuance size of this Hong Kong listing was 580 million US dollars. Even with a subscription rate of 50%, it gained significant recognition from top-tier international and domestic institutions, including financial investments from long-term funds both inside and outside the country, as well as strategic investments from upstream and downstream players in the supply chain.

The listing of our H-shares also established a more international capital operation platform for the company, laying a solid foundation for expanding into international markets and acquiring new customers.

While pursuing commercial success, we place high importance on sustainable corporate development. Last week, we also simultaneously released the 2025 Sustainability Report. Huaqin Technology adheres to its mission of improving people’s communication and lives, establishing a strategic approach focused on scientific governance, green low-carbon initiatives, responsibility leadership, and a healthy ecosystem. We promote collaborative evolution within the value chain and enhance the resilience of the ecosystem.

We continuously optimize our governance structure, integrating risk management into every aspect of our business processes. We firmly advance towards dual carbon goals, increasing the proportion of clean energy usage. We consistently build an agile and purified organizational system, empowering all employees. Huaqin Technology also strives to be a role model for social responsibility, with charitable contributions exceeding 21 million yuan, benefiting over 200,000 individuals.

With our solid management practices and implementations, the company has received MSCI ESG A rating, Wind ESG 3A rating, and Forbes China ESG Top 50 evaluation in 2025, reflecting market recognition of our sustainability efforts. Huaqin Technology will continue to proceed steadily, adhering to long-term stable development. We believe that our sound operational performance will bring returns to investors who support us. Everyone is welcome to stay updated via Huaqin Technology’s Investor Relations official account. Thank you.

Alright, we will now move into the investor interaction session. Investors attending in person, please raise your hand to ask questions; those participating online can submit text questions through the SSE Roadshow Center, and we will respond online. Okay, let's begin. Investors who wish to ask questions at the venue, please raise your hand and kindly introduce yourself with your name and affiliated institution beforehand. Thank you.

Li Xiaokang

Good afternoon,各位 leaders of Huaqin. My name is Li Xiaokang from Guoan Securities. I have two questions I'd like to pose. First, we've observed that your company's Q1 2026 results are exceptionally strong. Could President Yu Tao please provide a detailed breakdown of the growth performance across each business segment? Additionally, does the Q1 net profit include any gains from innovative initiatives or from cornerstone investments in Hong Kong-listed stocks? If so, what is the specific amount, and how significant is the impact of QE on the income statement? Thank you.

Li Yutao

Thank you, Xiaokang. Indeed, in the first quarter of 2026, the company's overall revenue grew by 16%, with strong year-over-year growth across all of our major business segments. Specifically, our mobile terminal business—including smartphones, tablets, and wearables—posted year-over-year growth of more than 25%; our AIoT business grew by over 50%; and our laptop business also expanded by more than 30%.

Our data center business experienced a slight year-over-year decline in Q1 this year, primarily because the AI server H100 platform saw explosive growth in the first half of last year, resulting in a relatively high revenue base. However, data center revenue has been increasing quarter by quarter this year, with particularly strong growth expected in the second half. In addition, our innovation business more than doubled its revenue in the first quarter.

In the first quarter, while our revenue grew, our gross margin also improved by 8.5 percentage points, marking a sequential quarterly increase. Moreover, net profit attributable to shareholders reached RMB 1.06 billion, up 26% year on year. As for the investment income you mentioned, it is indeed as you noted: our first-quarter earnings included gains from several cornerstone investments in Hong Kong-listed companies within our industrial ecosystem, such as Zhaoyi Innovation, OmniVision Technologies, and Nanjing University Microelectronics, among others.

Our total net profit includes investment income of roughly RMB 100 million. Excluding investment income, our first-quarter net profit attributable to shareholders, on a non‑GAAP basis, was RMB 820 million—this reflects our investment income performance. As for the foreign‑exchange gains and losses you just mentioned, given that overseas revenue accounts for slightly more than 50% of our business, we have effectively achieved natural hedging between our domestic and international operations.

This includes the proportion of our overseas procurement, which is also close to 50%. Consequently, the primary settlement currency for our overseas operations is the U.S. dollar. As a result, our overall business has achieved natural hedging between domestic and international activities, meaning our net U.S. dollar exposure is relatively small. In the first quarter of 2026, our company's foreign-exchange gains and losses were virtually balanced, with no net loss.

Even under these circumstances, the company has adopted a variety of measures to manage foreign-exchange gains and losses. At the business front end, we lock in exchange rates to mitigate volatility; at the group level, we have implemented centralized management of foreign-currency funds; and we also use financial derivatives to hedge against exchange-rate risk. That concludes my response. Thank you.

Li Xiaokang

Alright, thank you, Mr. Yu Tao. The second question is that we indeed see that our company has been affected by the consumer electronics market this year. I wonder if there is an update on the outlook for our performance in the first half of the year and the whole year, and how we should look at such growth for next year or even longer term. Thank you.

Li Yutao

Alright, thank you. Indeed, as we just mentioned to you, under the current industry environment, we have been affected by some consumption, especially in the broader consumer electronics sector. But let’s talk about our performance growth first. We expect that our second-quarter results will still maintain steady growth. Of course, the overall growth rate in the second half of the year will be higher, so based on our full-year forecast, we still predict that our total revenue will grow by more than 15% for the year. Our full-year profit growth will be faster than the revenue growth. That's the situation with our growth.

As you mentioned, although we have been affected by the consumer electronics market, including factors like the domestic GPU platform transition cycle in data businesses, it should be noted that our company has built a robust and diversified product lineup following the 'three plus N plus three' strategy. The core growth logic of our company actually involves the overlapping of three major factors.

The first factor is our solid base in mobile phones and PCs, which form the stable foundation of our consumer electronics ODM business. Although we are facing pressure from storage issues in consumer electronics—for example, smartphones may have been affected—our IoT business will grow by over 30% for the full year, which can offset the impact on our mobile phone business. Therefore, our 'one plus N' product portfolio in mobile phones will still show growth. That’s the situation with mobile phones this year.

Moreover, in the PC segment, with increasing market share, we expect that PC revenue for the full year will grow by more than 30%. The second factor is that our data centers and supernodes provide high growth elasticity. The third factor is the addition of automotive electronics and robotics, which are long-term growth options and represent the second growth curve for our company.

Therefore, considering the overlap of the above three factors, in the medium to long term, the company will maintain steady growth. Even in the situation next year, we expect that with the improvement in market conditions and the mitigation of risks on the supply chain side, along with the results of efficiency improvements throughout this year, our revenue and profit growth next year will be more supported.

In the medium to long term, based on our 'three plus N plus three' business layout, we still aim to achieve our original target of 300 billion in revenue, meaning under 'three plus N plus three,' our 'one plus N' product portfolio in mobile phones is expected to break through 100 billion within the next two to three years. Our 'one plus N' product portfolio in laptops will break through 100 billion within the next three to four years, and our data center business will also exceed 100 billion within the next three years, possibly even sooner.

Thus, the company overall expects to achieve the revenue target of 300 billion between 2028 and 2029. That’s my response. Thank you.

Middle School No. 1 Farm

President Yu Tao and leaders of Huaqin, hello. I am Zhong Yinong from Huayuan Securities. I mainly want to ask about our data center business. First, regarding Q1, what does the product mix and customer composition look like for the data center business? Additionally, looking ahead from Q1 to the whole year, what is the outlook for the data center business, including its progress across different customer segments? Thank you, President Yu Tao.

Li Yutao

Thank you, Yinong. Indeed, everyone is quite focused on our data business. As mentioned earlier, since we switched to domestic GPUs in the second half of last year, our data business has been growing quarter-over-quarter. In Q1 of 2026, our revenue was just under 10 billion yuan, showing a slight year-on-year decline. However, we expect further growth in revenue scale in Q2.

Particularly in the second half of the year, with the shipment of supernodes and full-stack products, our data business will experience rapid growth. We forecast an annual growth rate between 30% and 50%. Regarding the breakdown of customers and product share that you mentioned, in terms of customers, in 2026 we will maintain a leading position with our top two CSP clients, which will continue to drive growth.

For another CSP client, we will rapidly increase our share, expecting an additional 10 billion yuan in revenue by 2026. Meanwhile, in the industry and channel markets, in 2025 we established a heavyweight product marketing team to accelerate our layout. We also launched our own brand, and we anticipate continued rapid growth among industry clients, with revenue expected to exceed 10 billion yuan in this segment by 2026.

In terms of products, our supernode product will enter mass production this year, and we expect full-year revenue to exceed 10 billion yuan. Additionally, our switches will continue to see doubled growth in 2026. Our data business will continue to pursue a dual-driven strategy targeting both CSP and industry clients while achieving leadership in supernode scale, compatibility with domestic GPUs, and expanding in high-frequency trading and IDC, solidifying our leadership in scale, technology, and efficiency.

Regarding our data business, let me add that we have established strategic partnerships with key upstream and downstream component suppliers, such as those in optical communication and liquid cooling. We are also actively working with customers and suppliers to establish relevant industry standards. In various key technologies, the company will closely follow industry trends and continue investing in forward-looking research to secure our technological edge.

In the medium to long term, based on the booming demand for domestic computing power and capital expenditures from CSP clients, we also predict rapid growth. With the upstream supply chain maturing, we expect the industry's scale to grow significantly in the coming years.

Our goal for the data business is to secure a top-two position among all major CSP clients while accelerating our expansion in the industry and channel markets. Our aim is to become one of the leading suppliers in China’s data center sector and a top-tier AI solutions provider. Thank you.

Wang Zhihan

Hello Mr. Yutao, and greetings to all the leaders at Huaqin. I am Wang Zhihan, Head of Electronics at Everbright Securities. First of all, congratulations to the company for achieving such steady growth despite the significant fluctuations in the external environment. Following up on the data center business mentioned by the previous investor, I’d like to ask a few questions since there is considerable attention on the super-node business. Could the leadership share insights into the overall demand scale for super-nodes domestically this year? Additionally, what differentiates Huaqin from other competitors in this space? My second question relates to the overall progress and scale of Huaqin’s super-node business this year. Thank you, Mr. Yutao.

Li Yutao

Alright, thank you Zhihan. In terms of super-nodes, Huaqin indeed holds a very core competitive advantage. To answer your question about shipment status, we have already started small-batch shipments of our super-node products beginning in Q2. We expect volumes to gradually increase, with mass shipments starting in the second half of the year. We project that revenue from the super-node business will exceed 10 billion yuan for the full year, placing us in a leading position within the industry.

Let me elaborate further on the super-node product. As a new generation of AI infrastructure that domestic cloud giants are heavily investing in, super-nodes offer notable advantages over traditional GPU clusters in areas such as communication latency, computing density, cost efficiency, data center space utilization, and total cost of ownership (TCO).

At the same time, super-nodes are more complex and come with higher technical barriers, including requirements for system architecture design, signal integrity, power supply, cooling, and deep integration. Huaqin was an early mover in the super-node space and is one of the few companies in the industry capable of designing both compute nodes and network nodes.

In terms of overall architecture design, interconnectivity, power supply, and cooling systems, we are better equipped to meet customer needs. Our competitive advantages also include supporting liquid cooling solutions, implementing end-to-end liquid cooling, ensuring operational efficiency through interconnected positioning software, and enhancing manufacturing throughput and production efficiency via specialized production tools and racking processes. This includes high-power supply designs and the use of supercapacitors.

We hold what can be considered leading technological advantages in these areas. On our super-node projects, we work closely with clients on in-depth co-development, adaptation, and testing. At Huaqin, whether in data centers or super-nodes, we consistently operate under the model of producing one generation, developing the next, and pre-researching the following.

Our technological edge in super-node products helps clients efficiently deploy AI computing infrastructure while striving to secure higher gross margins in super-node projects. Thank you.

Wang Zhihan

Very humble. Thank you, Mr. Yutao. Wishing the company continued success and growth.

Xu Mingwan

Good evening, Mr. Yu Tao, and greetings to all the leaders at Huaqin Technology. I am Xu Mingwan from China Post Electronics. I have two questions that I would like to ask. The first question is that we can see that the growth rate of our company's innovative business segment is very fast. Could you give us an overview of the specific annual plan for these businesses? The second question is about the listing of our company on the Hong Kong stock exchange. Could you share with us the specific impacts this listing has brought and future prospects? Thank you, Mr. Yu.

Li Yutao

Alright, thank you, Mingwan. Due to time constraints, we will address the last two questions. Let me first answer your first question regarding our new business segment, particularly our innovative business. Allow me to explain, as it was mentioned earlier.

Firstly, there is our automotive electronics business. In the automotive electronics sector, by 2025, we will have achieved product deployment and breakthroughs in areas such as smart cockpits, autonomous driving, body domains, and power domains. By 2025, our annual revenue will exceed one billion yuan, and in the first quarter of 2026, we will continue to maintain high-speed growth. We expect the revenue for the whole year to more than double, exceeding two billion yuan.

In the coming years, we predict that our automotive electronics business will continue to experience rapid growth. Moving forward, we will further increase R&D investment in the automotive electronics field. In terms of autonomous driving, aside from domestic platform solutions, we are also deploying NVIDIA’s high-end autonomous driving platform. Regarding cockpit solutions, we are investing in Qualcomm’s flagship cockpit platform solution.

Simultaneously, in addition to steadily expanding our domestic OEM customer base, we are also making significant progress with overseas clients. This concludes the discussion on automotive electronics. In the robotics sector, as robotics is a key focus area that we formally began developing in 2025, we aim to become a leading provider of comprehensive robotic solutions in the 3C manufacturing domain.

By 2025, we have completed the development and mass production delivery of data acquisition robots. In 2026, we will further enhance the scale of delivery for these data acquisition robots. Additionally, in our self-developed bipedal robot project, we are working on the second-generation model. Importantly, in 2026, we will leverage our company’s strong advantage—our extensive manufacturing scenarios and data—to deploy wheeled robots within our manufacturing environment, enabling collaborative operations between robots and employees.

Furthermore, another aspect of our robotics division is the household cleaning robot sector. We anticipate achieving shipments of over two million units this year, serving top brand customers in robot manufacturing, and we expect continued growth in this area throughout the year.

The third part of our strategic business is software services. Based on the company’s accumulated expertise in software technology and intelligent product platformization, we are building a comprehensive software service ecosystem for consumer electronics clients, automotive electronics customers, and downstream industries such as smart manufacturing. In 2025, we already realized substantial revenue, scale, and profit contributions in the software domain. We expect to further expand profit margins in the software sector in 2026. This summarizes the status of our innovative businesses.

Lastly, to answer your previous question, as I mentioned earlier regarding our Hong Kong listing, the company indeed expects many positive impacts post-listing. On one hand, we have established an A+H dual capital platform, which has further broadened our global and diversified financing channels. The introduction of international long-term capital has optimized our shareholder structure and made our capital structure more robust.

Of course, going global has also helped rationalize the company's valuation. With the A+H dual platforms, we are better positioned to support our R&D investment, business expansion, capacity growth, and global business layout, further enhancing our industrial chain synergy. This includes improving our M&A integration capabilities, increasing the company’s influence, and elevating governance standards.

Going forward, based on our A+H dual capital platform, the company will continue to focus on its core business, optimize our product mix, and increase investment in core technology R&D. We will steadily advance the expansion of domestic and overseas markets and industry layout. We aim to consolidate our position in consumer electronics to strengthen our profitability base, while seizing high-growth opportunities in AI computing power and data centers to rapidly expand market share.

At the same time, with a longer-term growth outlook for automotive electronics and robotics, the company will leverage the internationalized capital platform of the Hong Kong stock market, flexibly use financial tools to improve efficiency, maintain stable operations, and continuously enhance core competitiveness and profitability. This will create more long-term stable value for shareholders. Thank you.

Li Yutao

Alright, today I would like to take this opportunity to sincerely thank all the investors for their questions and exchanges. Huaqin Technology's First Quarter 2026 earnings presentation is hereby concluded. We also welcome all investors to stay in touch with the company through phone, email, SSE e-Interactive, and our Huaqin Technology Investor Relations official account, among other public channels. Until next time, thank you, and thanks everyone.

More details:Huaqin Co., Ltd. IR

Note: The above content is generated by an AI language model based on publicly available data and third-party automatic subtitles. The content does not represent any position of Futu, nor does it constitute any investment advice. Futu Group makes no express or implied guarantees or statements regarding the accuracy, timeliness, or completeness of the above content.

51K Views