Sunny Optical Technology (Group) Company Limited (2382) Earnings Call Transcript & Summary

Dear investors and analysts, good afternoon. I am Christina from the IR team at Sunny Optical Technology, and I'll be hosting today's event. It's truly heartening to see the venue filled to capacity, and we're also thrilled to note the rapid growth in online participants joining us worldwide. I understand that among our global audience, there are longstanding supporters who have been with us through every step of our journey, as well as the new friends who are just getting acquainted with Sunny Optical and eager to deepen their understanding. So on behalf of the company, please allow me to extend our warmest welcome and sincerest gratitude to all of you. Before we start, I'd like to highlight that today's event will focus on the nonfinancial dialogue, focusing primarily on market opportunities of optical electronic markets, technological trends and how Sunny Optical leverages its strength, innovations and the strategic positioning across the key sectors. And first of all, please allow me to introduce the management present here today. They are Executive Director and Chairman; Mr. Ye, Liaoning; Executive Director and CEO, Mr. Wang, Wenjie; Vice President and the Joint Company Secretary, Mr. Ma, Jianfeng; General Manager of Ningbo Sunny Optech, Madam Wang, Mingzhu; General Manager of Ningbo Sunny Automotive Optech Corporate Limited, Mr. Qiu, Wenwei; General Manager of Zhejiang Sunny Optical Intelligent Technology, Mr. Wang, Zhongwei; General Manager of Zhejiang Sunny Optech Corporate Limited, Mr. [indiscernible]; General Manager of Zhejiang Sunny SmartLead Technologies Corporate Limited, Mr. Zhang, Kouwen; Deputy General Manager of Zhejiang Sunny Optical Intelligent Technology, Mr. [indiscernible]; Senior IR Director and Joint Company Secretary, Madam Wong, Pui Ling. Next, I will briefly go through the agenda of this Investor Day. And we have 2.5 days session. So in today, we have three parts. The first part is the opening remarks by Chairman Ye, and the second part is the company and business updates. And we will have CEO and the leaders of different companies to focus on VLS, HRS, XR and the robotics to share with you the latest trends of the industry and updates of the company business and for presentation materials, please scan the QR code on the schedule placed at your seats. And the third session is the management Q&A. Please note that to optimize the communication, we not only have the on-site question and answer, but also have the online question and answers. And I will read the questions on behalf of the investors. So if you are joining online, please scan the QR code on your agenda and type in the questions. So if you are from online, then you can type in the questions in the text book of the broadcasting platforms. And after the session, we have prepared dinner for you. And while enjoying the food, you can have more interactions with the management. So tomorrow money, we will have the site visit and there are two routes. The first route is a tour for the mobile phone or headset, lens set production line. The second is the product showcase and experience, and both lines are arranged in the [indiscernible] production base. So please join based on what you have selected during the registration. So after the visit, you're welcome to have a brief exchange with Mr. Wang, Wenjie and Vice President, Mr. Ma, Jianfeng and our IR team. So without further ado, let's welcome our Chairman, Ye, Liaoning to deliver the opening remarks.

Dear investors and analysts, peers, good afternoon. Today, we have seen friends from the investment field to come to Sunny Optical and I'd like to be on behalf of the Sunny Optical Technology Group to extend a warm welcome to all of you and the sincerest gratitude as well. So since the beginning of the year, we have seen the geopolitical tensions and the China-U.S. tensions. And we had faced by multiple challenges, which had slowed down the economic recovery, and there has been a severe challenge for the growth of the company. And in 2025, the global economy is changing with a lot of uncertainty. And the economic order of the world has been restructured, and there has been more ferocious market competition, and we still face a big stress for our future development. Therefore, at the same time, we can see the breakthroughs of the AI development has brought a lot of momentums to the mature businesses like the handsets, lens sets and the vehicle lens sets and had virtually facilitated the AR/VR robotics, et cetera, and it has created new opportunities and the growth momentum for the optoelectronics industry. And Sunny has been really driving the changes and the upgrades and we wanted to seek the opportunities going forward. And we will continue to reinforce our strategic positioning, stay focused on innovation and to enhance our awareness of preventing the risks and actively embrace the changes. And we try our best to return to the investors and appreciate your trust a lot. So thank you very much for your care and support for the development of Sunny, and we really cherish this opportunity for exchange. And we hope that with this exchange, you can have a better understanding of Sunny. And we also hope that you can sincerely share with us your suggestions, ideas and advices so that we can have a better high-quality development, and we're able to create more value to the shareholders as well. And the last but not least, again, I'd like to extend my sincerest gratitude to all of you coming to Sunny. And I wish a great success of today's event. Thank you.

Thank you, Chairman, yes, for your opening remarks. I believe that this valuable exchange will bring meaningful takeaways for all investors and analysts, and I also look forward to seeing you forge insightful dialogues with the management team, creating synergistic movements and foster two-way value resonance. And the second part, we'd like to share with you the industry trends and the business updates. First, let's welcome Mr. Wang, Wenjie to share with us the general picture of the company.

Dear investors, good afternoon. Welcome to our Investor Day. So again, it's in the season of the raspberry. And again, we meet here with you. And you may wonder why I'm wearing glasses, that's because I -- previously I didn't and we have some captions on my glasses, and I can see the script. So this is the future proof technology. And do you see some reflections, maybe in some directions, you will see some reflections, but I'm thinking about how to make it a secret, but they tell me that there are still some reflections and I cannot keep it a secret. So I'm not reciting all this. There is a reminder of the script. But I may not strictly follow the script. I may have some improvisation and depends on your reaction, based on your interest, if you're quite excited, maybe I will spend more time on that point, and if you -- if you feel boring, maybe I will go very quickly. It means that you already know about it, you're very familiar with us. Let me start. I will paint a picture about our current status as well as some of our ideas for the future. So our team give me a short duration of the presentation, the purpose is to give more time to the business introduction. So the responsible persons later on will give you more thorough introductions of our business. So we also have a Q&A session and please ask more questions to them, not me. And I feel that there is a lot of chances for me to meet with you and interact with you. But for the business heads, maybe it's a very rare opportunity. And have you seen -- have you noticed that we have more management joining us today, and we have the biggest presentation team today. So I believe that it will be a great event and will be beyond our expectations and beyond your expectations as well. So there are two parts. The first is the company introduction and the second is the future outlook. Still, I'd like to start with the corporate introduction. And in China, we say that if you don't know about the roads where you come from, how can you understand the road going forward? If you don't have a clear picture about the past, then how can you orient yourself towards the future, and you don't know, right? So later on, I will have a brief review of the past important milestones, for example, and I will then introduce the possibilities for the future. So this is one thing. And as you all know that Sunny was established in 1984 and the last year was the 40th anniversary since our establishment. So on our WeChat account, you may have seen some coverages, and we organized a lot of events to celebrate the 40th anniversary, and this has laid a solid foundation for the next step of development. And we already have the basic positioning and the directions. And right now, we are a global leader of the optical imaging and optical perception as well as the large-scale production. So this is a very important sentence and so we have made some changes to it. And previously, we call it the integrated comprehensive components and parts of the optoelectronic market. That means that we have slightly changed our positioning. And we believe that this new positioning is aligning with the needs of the AI era. Going forward, we will focus on the optical perception, especially the intelligent hardwares and we will use a systematic way to expand the market. So here, we still need to review our mission, vision and values. As we all know that our mission is to explore a prosperous road for the development of optoelectronic industry to create together a bright future for intelligent vision world and our mission -- our vision is be stronger, bigger and go further to build a 100-year-old brand and foster a great enterprise. So a great enterprise means that we are able to continuously drive the value and contribute to the society. So in order to make Sunny a great enterprise, we must strengthen ourselves and -- to achieve high-quality development. And we must scale up, so the RMB 100 billion sales is a current stage goal, and we must have a long-term and sustainable development and only by such development, we are able to bring value to all of the staff, all of the shareholders and all of the clients. This shows you the development history of Sunny. In the year around 2000, in the millennium, we had proposed the product directions and we switched from the conventional optical to the parallel development of conventional ones and the modern optical electronics, and since then, we accessed the market of the headset lens set and the vehicle lens sets. Right now, in these three areas, we had been ranking #1 in terms of the market share. And on this slide, you can see the curves of the share price and the PE ratio. And I believe that you have invested in our stock. And you can see the trends of these curves are very much in line. And actually, we have another table, including the average PE ratio, but if we add the average PE ratio, then we cannot show the fluctuation that much because in the year end, at beginning of the year, in the middle of the year, there are a lot of changes. So maybe you cannot very accurately reflect the situation of next year, but the profit for the year attributable to owners and the annual average share price is a very good indicator of the development situation. So these two curves are very much in line. So we were listed in 2007. And from 2010 to 2020, the headset and the vehicle lens set business had experienced a booming development. And then we can see that after 2020, although we do face the impact of the COVID and also the leaseback of smartphones. But now we're coming up again. So we believe that this is just a temporary challenge we're going to face. So all the statistics shown that our core capability in some -- certain period of time can be demonstrated although we do face some short period of market challenges, that's a certain. So here, this slide is demonstrate the evaluation -- the evolution of our capability. So we can see our tech capability is a constant and clear development trend. Our optic capability started from the optic cold pressing technology and coating technology. That is a very fundamental capability we need to have in order to create precise product. And then in order to cope with the large demand of smartphone and handset and lens set, and now we started to start to have the mold processing technology, including SIP simulation technology. So the core of those technology is based on high precision molds, and so we do have long-term and in-depth investments that give us the opportunity or capability of design and manufacturing of very precise optical uptick products. So after many rounds of technological evolution, now we're going into MOC, has the already active core alignment technology now cope with the new development trend. So all these core technology and mass production capability has been enlighten our other businesses such as our automotive business and other business area. They are the support -- key supporting pillars of those business. And then we are now constantly investing in our algorithms and other technologies. These not just support our development into more domains, but also gave us the opportunity and very solid foundation for creating ODM and OEM and that capability chain is our full capability from end-to-end capability is the reason why we can know our customer demands in the system layer. And that is what differentiates us from us and our competitors. So here, I would like to talk about our platform and technology capabilities. So as we mentioned, technology and capabilities development, evolution trend from our core platform technology. We're going to talk about our optical coating, testing analysis, system design, development, molding processing, precision packaging assembly, design simulation equipment development. Now we're going to talk about the mold pressing. In terms of mold processing, I'll give you a few statistics, that is [ 0.2 mil non-spheric lens at 0.02 ]. And the yield rate can be controlled within zero-point-something-mil or in nano-scale. So by having this type of high precise molding processing capability, it offers the ability to create very precise optical products. So this kind of capability can be adopted into a high precise structural compartments or parts. So in terms of precision manufacturing that offers a great capability and competitiveness. For instance, in our periscope system design, the high precision mold can ensure that the light path is really precise so that we can have very strong power of focal length. So that is what high precision mode can bring us in terms of our product capability and later -- so these core capabilities support products from our optical parts, lenses, molds and to multi-sensing infusion and overall solutions and so on. Later for automotive, smartphones, XR, robotic visions and so on, our leaders of these business domains will introduce these to you, so I'm not going to dive deep in this. So in order to better support the realization of customer demands and also to enhance our product capabilities, we have a series of optimization to our organizations. So we have restructured the organization. And now we have this sky, tree and ground system. So we probably know this chart before. And this is kind of like the Huawei system, as you've seen. And now we are putting more emphasis on the tree, so the strategic grouping and central organizations. In terms of the group platform that including common technology platform, equipment platform and mold platform. So to put more resources into the important area, so we can utilize the system investment. So from this chart, we can see that our customer structure is quite diverse, and it is quite evenly spreading around and our customers there are most like -- most likely the head players, the top players within the industry. So this is our financial position. As you can see, basically, our financial position has remained pretty solid. Now I'm going to talk about our future outlook. So we'll know that the AI is going to drive rapid development of all different industries, especially in the optoelectronic industry. So the optic sensing is a key entrance for our AI sensing. Based on the optic sensing, these hardware is welcoming a new growth trend. So we are proactively to use AI technology into our smart manufacturing. So not just investment in small models, but also, we are deploying more vertical models in terms of the opto manufacturing. In terms of the market trend, we can see that the AI technology is breaking through all different types of barriers. Our customers, they are trying to break the barriers as well. For instance, for our smartphones, they are now expanding their cells into the reality or the AR/VR domain. Many of those AR/VR glasses are actually be done by these smartphone players. And all these has boosted the development of AI and even other areas such as low altitude economies and so on. So actually, in terms of technology topology, they can be traced into almost the same origin because it's all about sensing. So for our opto sensing capability can be used -- can empower different domains. And currently speaking, the industry has reached a common ground, not all AI model needs to be deployed on cloud, especially for the edge devices. So the -- we need to have a synchronized structure in terms of the cloud deployed and edge deployed AI system. Therefore, as a key player or a vendor in terms of the optical manufacturing and parts player here in Sunny Tech, we can provide more integrated solutions to this domain. So we will use these capabilities as our core to echo the demand of the market. And also, we will keep strengthening our technological capabilities and to expand into more areas to construct more comprehensive end-to-end capability and also our product portfolio to cut it into more rising markets and also to reach breakthroughs in new domains. Now we have already adopted AI into our product -- production. Currently speaking, we are fine-tuning our own model and the result is already pretty fruitful. Now we will use our AI to better optimize our yield rate to create more value or higher value to our customers. Finally, here, I would like to put more emphasis on the values that we are trying to create here. And we -- with all of our investors, we want to create a better future for the mankind, a smarter future for the mankind. So in the past, we are the single output. We're telling you like how are we going to develop, what kind of product do we have, what trend are we catching. And now we want you to tell us more, to tell us more information in the market, more talent from the market to tell -- to give them to us so that we can reach a win-win and then we can improve our share price, right? So this is a mutual win-win. Thank you.

Thank you, Wenjie Wang, and just like you mentioned, we are shouldering the mission of creating a better world and creating a better enterprise. The restructure of the optic technology is going to give us the opportunity. And now for each business domain, we will like to invite them to give us the speech. Now first of all, we are going to invite [ Mr. Cho ] from the automotive to tell us more about Sunny. Thank you. Welcome.

Distinguished investors, good afternoon. So here on behalf of Sunny Automotive, I would like to tell you about our business. So first of all, in 2025, our smart driving, we call them a leapfrog growth in the vehicle lens market in 2025, and that is because of our EV in China, especially leading by BYD, and they have been equipped with all these new lenses that have pulled the hardware of smart drivings in the world into a new lead. So based on the statistics, we can see that in 2024, our global number of lens set per car in 2024 and 2025 is going to surpass 4.3 per vehicle. So from that curve, we can see this is being provided by TSR, a Japanese company. They estimated that in 2025 is going to only be 3.1. And based on central leapfrog growth in the Chinese market, we expect that the global market will have over 400 million pieces. And in the vehicle lens sets, Sunny Automotive Optech has maintained a very high market share as we have been pushing the limits of our technology, cost effectiveness and fast response. So in 2025, with such a quick growth and a quick changing of the market, we estimate that in 2025, our market share will continue to increase. And in vehicle lens sets, we have been closely monitoring the market trends and accordingly, make a lot of preparations in technology and professionalism, for example, smart driving ADAS and 8MP is the main form of the product and in 8MP, we have a very high market share, and it's about over 60%. And in the higher pixel level, such as 17 mega, we have been collaborating with a very famous OEM in the field of ADAS, and we started development cooperation years ago. And right now, in the mass production field, we have being ready. That means we have done a lot of tests and certification. Our plan is that by 2026, next year, we will start the mass production and supply. And we should say that this means we have the most advanced hardware solution for ADAS and also about the rapid response and delivery. Right now vehicles are more like a headset. Previously, every 2 to 3 years, there's a iteration of the product because the R&D cycle is about 2 to 3 years. And then we need to have mass production and then we can start the development of the next generation, but for the vehicles, it's about iteration per year. So in the key components and parts, we can have a very quick production of the samples, moldings and we also have the standardized and automated production lines. And we can also use AI technologies to optimize process. We have a lot of simulations, et cetera, the design simulations, so this helps us to accelerate the process of design and production. So in the second half of last year, domestic EV has an 8 mega project, and they were really urgent need. So we propose that we can do it and it only took about 4 to 5 years to reach the mass production. So this is the Chinese speed. This is the Sunny speed. And versus the price competition, we also provide a lot of cost-effective technologies. For example, the gas aspherical technology, we are still the leading providers in this. And we have the most cutting edge processing, for example, the non-edge grinding, about 2 to 3 years ago, we had applied this technology to almost all of the products. But now our peers or competitors only have a small proportion of the products being able to use this technology. And also, it's about how to actually turn the materials of the glass into the injection molding. So this can help us to reduce the cost. And then now we have made breakthroughs in our technology and apply it massively. And also the hybrid glass, plastic lenses, we have a lot of applications. And now we have massive supplies of the 8 mega lens. And cumulatively, the ADAS hybrid lens has been reached over 40 million pieces. So although there is ferocious price competition and the competitors can -- you can see that on the market, the competitor's operation is not so good, but for Sunny, we still maintain a good margin level. And when we are facing the trend of high pixel and the upgrades of the technologies, the functionality and the trust of the product matters a lot. So we believe that the stability and the quality of ADAS is extremely important. In this part, we also have a lot of preparation in technology, and we have been launching those technology to the market step by step. For example, the ultra low reflection technology has been well applied in the very famous domestic EV and not long ago in their product. At the same time, the LiDAR business is not only about the vehicles, but also can be applied in robotics and the industry field because technology-wise, it's very similar, and we had actively extended the applications. And right now, over 20 projects has been nominated for mass production. And for the new projects, because in the total volumes of the LiDAR, we still need to follow the market trends going forward, and we need to follow the trend, right? So right now, we already gained a lot of nominations. I believe that the total volume had to be over 1.5 billion. So in terms of the market trend of LiDAR, the first is the miniaturization and the second is the rapid delivery and the third is the high cost effectiveness. So we have seen the quick cost down of LiDAR. And some of the customers already say that for the main camera, LiDAR should cost by only USD 100. So we have been evaluating whether it's possible or not, and we don't think there is a bigger gap. So in terms of the miniaturization, we have a very precise optical folding technologies and some other special technologies, and we can deliver the very compacted design with a significant size reduction under the same solution. So we can see the demand from the customers, and they have a very diversified needs for the formats and the sizes. So going forward, in order to meet such diversified demand from different customers, we have been actively enhancing the production capabilities and standardize the technology and modularize so that we can put together different modules so that we can quickly meet the demand of the customers that vary a lot, and we can also reduce the R&D cost. So in terms of the last feature, high cost effectiveness, we also boasts some industry-leading patching technologies to be placed at the conventional integrated revolting prisms and also some mature technologies such as the hybrid plastic and hybrid technologies are applied in the LiDAR. So the transceiver chips also require the high-precision COB bonding technologies. And in some of the projects, we had made it possible, and we already have the small size, small scale supply. And we also have some software developed active alignment AA technologies, and all of these are some of the latest development of LiDAR technologies. Now this part, it's about the smart headlight of the vehicles. For the headline, the market is huge and the main function of the headlight is to provide illumination and the EDB retinal control. So for Sunny Automotive, we had been closely focusing on the digital and the pixel based headlight. So it's about thousands or tens of thousands level. Only with that, we can showcase the value of optical technologies. And although the automotive industry is quite competitive, but for this kind of headlights, the development speed was a little bit hindered. However, speaking of the future development trends, we are very optimistic. And the market share of Sunny Automotive in the pixel headlight, we expect to have further growth. So last year, it was about 18%. This is the projection headlamp market share. And so we believe that going forward, it can be further increased to about 30% or even more. And with the higher penetration of the projection headlamp, we believe that it will definitely play a key role for the business growth of Sunny. And we believe that the market size or the TAM may even bigger than that of the vehicle lens sets or at least the gap will not be big. Last but not least, let me talk about the development of HUD. So among HUD, we focus on the AR HUD and the mainstream is still TFT. But AR HUD, well, although the scale is not big now, but the development trend is very promising. So recently, we have again some extra nominated projects of DLP and the PGU HUD projects. At the same time, years ago, we have made a lot of technology preparations and with the AR HUD and the reflectors in terms of the stability and the quality, there are some challenges. Therefore, we use the glass curved mirror to replace the plastic ones. And in terms of performance and cost, it's better. And we have been well received by the market. And in terms of the thermal curving glass mirrors, we have got a lot of projects. And we believe that with this kind of glass freeform mirror, which is a very key part, we are able to get more PGU AR HUD projects so that we are able to enhance the growth of business in AR HUD and HUD as a whole. So that is from my part. Thank you very much.

Thank you, Mr. Cho for your excellent sharing, whether in the continuous innovation of automotive lens or the technological breakthroughs in LiDAR or sustained efforts in automotive lighting and HUD markets, Sunny Optical's achievements demonstrate that the evolution of the automotive intelligence opportunities outweigh challenges. We are convinced that Sunny can navigate the competition with the composure, maintain its leading position and to make a sustainable condition to the industry's healthy growth. As another critical hardware component in intelligent driving systems or ADAS, vehicle lenses are facing a multibillion-dollar R&D market and leveraging Sunny's accumulated technological expertise in optoelectronics, we are leading the innovation and have achieved rapid development. And the next let's welcome General Manager of Zhejiang Sunny SmartLead Technologies, Mr. Zhang, Kouwen to share with us his presentation.

Good afternoon, dear investors. So here, I'm going to make an introduction about our automotive cameras. Now I'm going to talk about from three perspectives. First of all, I'm going to talk about our market insights. Now I'm going to talk about a track of RMB 100 billion jointly shaped with by policies and consumption. So on the left-hand side, as you can see, in this pie chart that is from 2023 to 2030, the gray part and the green part, there's L2 and L3, the market share will increase significantly. On the right-hand side, that is L2, L3 cameras onboarded ratio. So the 8 mega pixel will have more vehicle be equipped with this type of camera module. In terms of the regulations, now as you can see, European Union, CSR, and they require a mandatory request for regulations to have ADAS systems. So these camera sensing is mandatory as well because of these regulations. And in terms of standardization and qualification that put us more explicit in strict standards. So in terms of our customers' demand, now the preference is actually changing because they want safety first and they want experience to put into priority. So as all these car brands, they do need to have smart cockpit like DMS, OMS system and gesture recognitions, all these innovations can improve our user experience in terms of visions and you have a stricter request for the resolution and reliability. Second, I'm going to talk about the leading technical perspective. So as you can see from different parts of the world, we have different requests from the market. In terms of European, American market, they have E-NCAP, right? They have higher requirements for low-end regulations and also in terms of protocols, they have ASA, MIPI-APHY, and in terms of industrialize upgrade, they have automatic production lines, dual track supply chain, global production base and so on. In terms of the Chinese market, it's actually driven by technology innovation like 18 mega pixel, ultra-high pixel, variable aperture, OIS, image quality enhancements and ALD coatings, super black for flare mitigation, COD ultra high conformity, low-cost request and also for functional innovations like chassis testings, side-view multi-functions. In terms of Japanese and South Korean market, they need all weather operations, active heating, withstand ultra-high ambient temperature working conditions, night vision enhancements and also in terms of supply chain risk resistance capabilities, they need overseas factory supply, prompt response, localized support. In terms of sore points, as you can see, it's actually technology duration is actually driven by sore points. And the detection range can have improvement because of the 18 mega pixel 1.4um ultra high pixel wide angle, 12 mega pixel 2.1um long focal length modules and MEMS-OIS consumption. In terms of the contrast ratio improvement under low high illumination, we have self-adaption variable apertures, LOFIC-HDR technology. Also in terms of flare, ghost interference avoidance, we have ALD coating, super black painting can reduce the optical system interference. So in terms of camera fusion, as you can see, we have front view two-in-one, side view two-in-one, sense surroundings and so on. Also rain, snow, fog penetrations. And so chassis testings, we have Pi cameras of chassis testing. In terms of our cost downs, we have the integration of Serdes and CIS chips to reduce the cost. And also in terms of material wise, we have hybrid lenses used, aluminum-magnesium alloy outside structure. In terms of chip ceiling, we do adopt COB, CSP+ chip sealing to reduce the cost and improve the performance. And third, I'm going to talk about hard technology plus strong ecology. So as you can see for these products, performance improvement for better all sensing capability. Self-adaption, variable aperture to improve nighttime imaging, solve day time overexposure. Also we have active heating technology of defogging and de-icing. Standardization of vehicle body data interaction to continuous optimization of APHY and ASA. In terms of image quality sharpness improvement, we use MEMS and OIS auto focus friction to enhance the resolution, also we use ALD coating process to reduce wide-angle reflection. And also, we use image clear without flare. We have super black painting technology on the PCB to avoid internal flare. So in terms of our scenarios, so for summon demand, though the L3 functions that the camera module for chassis testing has now become a demand. So we're doing the summons, we can avoid animals or obstacles. And also, we have risk-free sensing to penetrate winds and fogs, withstanding storms. And also, we want to reduce the amount of the cameras installed. So we do have side view cameras integration and front view camera integrations. So besides for the hardware, our ecology system is something we are investing as well. So we do cope with the main players in the market, to cope with their portfolios, to reduce the R&D time and challenge. So as you can see, we do receive certificates from these main platforms. So that will be all of my sharing. Thank you so much.

Thanking you so much, Mr. Kouwen. And so after hearing the stories from these two General Manager, I do believe that you have better understanding to our automotive industry as well of our company. Now we're coming into the next domain, an important domain in Sunny as well, that will be our smart handsets. So in this area, some investors are worried about that because this is a very competing -- fierce competing market, in pressure. But Madam Mingzhu might think it that way. Now we're going to invite Sunny Optical Tech General Manager, Wang, Mingzhu to make her introduction. Please.

Dear investors, hello, everyone. Now I'm going to share with you here smartphone-related products. So first of all, let's take a look at the overall market and imaging industry trends in 2025. So here, the global economy is recovering rather slowly. And so Sunny Optical focus that the global smartphone sales in 2025 will be approximately 1.175 billion units, a slight increase Y-o-Y, 0.2%. So under that circumstances, we can see the table down here. So this is the imaging module market size trends in value. So this benefited from high-end camera modules demand is growing. So that bring us more value in that, more revenue in that. So although we only have 0.2% of increase in global smartphone market, but the Chinese market is outperforming other markets, that the growth of Chinese market reaches 2.2%. And why is that the volume-wise is increasing, that has benefited from the demand of high-end products, including miniaturization, ultra-thin and the high-performance video capabilities requirements. So let's take a look at each of them. In terms of affordable models, ultra-thin models and also small screen models, the demand of these are increasing. And also, the image quality is upgrading. There is a demand for extreme miniaturization, ultra-thin. So with further increase of the image product difficulty, the demand for miniature camera is actually growing. That's first one. So second, so as that -- for short video shooting and professional video shooting that puts higher request for all IS performance. So on one hand, we can see that -- on one hand, the flagship main cameras, they have improved towards larger OIS angles, more precise as well to that trend. And on the other hand, OIS application is now coming into mid-end or low-end models so that the OIS camera module demand is increasing, that's second. And third is that for telephoto imaging. In telephoto imaging, track has now become a key player for various brands to improve or differentiate themselves from their competitors. So for more powerful telephoto, larger sensor, apertures and it's moving towards that way. And also, this coupled with the periscope technology into broader mid-end and low-end modules. So the demand for telephoto camera modules continues to rise. So this is about the opportunity of the preparation of our own products and portfolios. Next, we're going to talk about imaging development trends for smart mobile devices. As I mentioned, three main paths: one is extreme miniaturization. So from the appearance of our smartphones, they want to become ultra-thin like the S26 Edge version of Samsung, you only have 5.8 millimeter. And also for the foldable phones, they want to improve their battery life. So the image modules, XY miniaturizations have better demands as well. At the same time, we want to improve the image capability, larger aperture, larger sensor size and so on. We want to integrate all these in. So the miniaturization of modules designs, high integrations, actuator lens and so on, they put higher requirements for these ones. And in the video era, we have a clear path, that is professional video experience. So for professional video experience, whether it requires variable aperture, variable focal zooms and so on. So by improving dark imaging sensing, OIS requires more angles, improve OIS performance, speed and precision. At the same time, it requires wide dynamic range of cinematic portrait video. They want high dynamic range, low power consumption and also low noise. So on the left-hand side, that is our full focal length experience. So from portrait focal length to tele focal length, we want to cover all this perspective. And then double telephoto that is periscope will double its volume. And also, we do offer continuous power zooms something we offer as well. And also in terms of professional macro photography, it needs to be done by telephoto macro. So this can -- come featured the -- our main target even more clear. So all these optical system needs to be a better refinement. We need lens edge tramming, straight light/ghosting control and also the advance of prism technology applications, all these technologies needs to be adopted into this. So this is the overall imaging developing trend. So here in Sunny, we do have -- we are capable with all the core technologies and demand. So in terms of the automatization of this smart handsets. So here in our technology, our technological bonus will expand. So this is a benefit to us. And just now we talked about module actuators and the lens and in each of the fields, we're taking the lead in the industry. So we have this kind of integrated technology for capability. And it will allow us to help us to provide more integrated solutions. And so the moat of the Sunny, the profitability and the industry position will be further improved. And next, let's speak about -- at the products. So the first one is still about the main camera. And just now, based on these main trends, so you can see on the left hand side and in the middle, we're talking about the ultra-low shoulder height and the XY-miniaturized technology. So actually, we not only have the one layer ultra-low shoulder actuator and we have entered into the fourth generator of the packaging technology, which provides a smaller size. And at the same time, it gives us the higher reliability and the thermal dissipation capability has been improved as well. But at the same time, we are still the only company in the industry that has the mass production capability in this. And on the right-hand side, it's about the solution for the shooting of the professional videos and we need higher stability, especially in the low light situation at night and the large angle stabilization is necessary. So we have the piezo Gimbal technology, and we're able to reduce the power consumption. So this kind of piezo technology is very useful because we have to self-lock, auto lock, and there is no magnetic interference as well. So this is something we are very optimistic about. We believe that it will become the new form of the actuator. And next, let's talk about the telephoto. There are four -- three forms which are the most typical. And on the left hand side, it is more suitable for the large aperture and low-load periscope, for example, 1 over 1.5 or above, so this is the large aperture, larger focus periscope, and because it's a large base, so we really need to reduce the power consumption and reduce the weight. With our technology, we can make it a more lightweight in the center, so without compromising the performance and the function of aperture, we're able to achieve that. So I believe that very soon, we will have a good result. And in the middle, this is a vertical standard lens sets, and we have the multifold prism attached to it. So it's more suitable for the high focal lens requirement. But at the same time, we need a very thin lens set. So for the multi folding prism and the dynamic control of the actuator, there is a high requirement. And on the right-hand side, if we wanted to cover all the focal lens, we not only need to have the two periscope as a solution or we can have two periscope, then we can cover two different focal lens. So we need to have the group moving of these lens. So we need to have the low-moving tilt actuator technology. So we use the prism technology and multigroup optical alignment and also the long range and low dynamics actuator technology. Just now I showed you the products and the corresponding technologies. And next, let's talk about the core platform technologies to support such typical product trends. So first, let's start with the modules and actuators. So we need a high-precision optical level assembly technology. Now we have AOA. Right now it is a very important technology, and we had broken the bottlenecks of the conventional optical assemblies for the high sensitivity and the high precision. Optical assembly, this is very important. And also, we have the group alignment of the focus or the continuous optical change, multi-group assembly. This is also very important and we already have 406-plus proprietary patents. That means that we are the most mature technology provider, and we have the most cutting-edge technology. And the second one is about actuator technology. And I put a scope of the periscope actuator. It means that we need to have a smaller size, a smaller number of the parts and the higher performance. So this is the only movable key part. So we also needed a high-precision insert molding technology and we can build in a lot of parts and components, and it's not only about the conventional insert molding like the metal ones are built in, in the coils and some driver IC are built in or embedded. That means that the insert molding had transferred from a plastic piece to a more complicated telecommunicate packaging test piece. So we are one of the fews that can provide mass production of these kind of technologies and products. So on the right hand side, you can see the self-developed driver IC technology. And just now we talked about the videos, and we have to have frequency and wide bandwidth stabilization. So we do not have a fixed frequency of stabilization. Sometimes we need the high frequency, sometimes low. So we really need to have to mixed solution with the wide coverage of different frequencies. So there is a bigger amount for the debugging. And when the time flows in the video shooting process, we need to reproduce the different forms of the videos and from different angles and different frequencies, we need to optimize the stabilization. So here, you can see that we have a very comprehensive actuator and OIS driving systems. So we have the right algorithm and debugging capabilities. So all of the modules for any actuator, we can have a very high stabilization performance. Next, I'd like to introduce the core platform technology about lens. So for lens, what I must mention is the glass-plastic hybrid technology. And just as I had mentioned, for minaturization, we must use glasses to enhance refraction rate. And also for the normal focal lens, we need to have very complicated ultra-low refraction coating technology and a lot of the simulation technologies put in. So for the hybrid technology, we can reduce the aperture and to solve the thermal drift issues of the telephoto, we have a lot of different applications. And based on our own data, the growth of the hybrid technology, so it's about 400% year-on-year growth. So this is something we are really advantageous about. So in hybrid technology, especially for the more premium ones, we have a big advantage and taking the lead a lot. So there are some limitations for the processing of the glasses. So with the conventional plastic forming, there is some differences. So what is the application of the glass, we must use the AA technology. So this is a must. So with the active alignment and we are able to showcase the strength of the glasses and to reduce some of the disadvantages in terms of processing compared with the clusters of materials. So another key part about the platform technology is about the prism and folded optics. So in Page 1, I already mentioned that for the camera, the market size has increased and a lot of share comes from the periscope and there is a higher focal lens, but the size is smaller. So that means that in the very limited space, we need to have a very long focal lens. It means that we must have multiple times of the refraction and the deflection and/or the combination of it. So there's a high requirement for the periscope. It means that we not only need to have multiple times of the refraction and deflection. So we also need to reduce the street light and the ghosts, that means that the prism technology of Sunny is taking absolute leads and the market share in Android system is almost 50%. So the periscope market share this year having really increased compared with last year. And I also need to mention about the multi-fold prism. So that one in the previous slide, we launched this technology as a first. So for the high deflection glass prism, we really need to have the high precision laser slotting technologies. And for the low refraction technologies, we need to have the low refraction and the high precision testing inspection technologies. And lastly, I'd like to emphasize on the process capabilities, and this is extremely important for the handset businesses. So first I'll start with the left-hand side. Now we talked about the larger base of the chips and the higher pixels. And now we even have a [ 200 million ] pixel for the periscope. So for 1 pixel, it's about 0.5 to 0.6 ml visible light wavelength, that means that we need to have the better management of the particles. It is because of the higher requirements that the manufacturing quality needs to be enhanced and the management principles need to be changed. And at Sunny, we have the most advanced, the whole process automated plants because just now we had emphasized on the vertical technologies for these key components, so from insert molding to actuator to lens and to the modules, for there is whole process we are able to make it completely automated. So this is for my part. Thank you very much.

Thank you, Madam Wang, Mingzhu for your thorough introduction. And we believe that there is a clear understanding of the potential for the smartphone lens sets and looking to the future, we still have a lot of possibilities. And I believe that the purpose of the visitors attending today's Investor Day is because that you wanted to peek into our emerging business. So in order to meet your demands, we have invited two executives to introduce you, the representatives of the two emerging fields, that is the XR and the robotics. And first of all, let's welcome Deputy General Manager of Zhejiang Sunny Optical Intelligent Technology, [indiscernible] to introduce you the industry outlook and the company development of XR.

Dear investors and analysts, good afternoon. So I am [indiscernible]. I will be on behalf of our group to introduce you our development and plans for XR business. But before I start, I'd like to say thank you to Wang Wenjie who have showcased the XR products in person. And I believe that with his leadership that there is unlimited possibilities for the XR business of Sunny. So at this time, we believe that it's the first time that we have set aside introduction of XR business. It's the first time that we have an independent session for it. So just now I mentioned that it's the first time that we have invented presentation of XR business on the Investor Day. So in today's era, just as the title had suggested from the technological pivot to the business breakthrough, this is the golden era. And next, I will go through these different parts and introduce to you our development and plans for the XR business. So these are the content. The first is the market trend, technology and then the future. So these are the different parts of my presentation. I will introduce you how Sunny can create higher value in the XR business from these perspectives. So before I officially start, because it's the first time for us to have the XR presentation. So we need to take a look at the product definitions. So we have AR/VR. MR/XR, we also have the smart glasses, the goggles, headset, et cetera. So before we start, we can clarify the definition of MR. So in this presentation, MR is defined as the headset in VR. So the smart glass means that we had integrated the features of audio camera display and AI-powered assistance. It can have a display or not. So first of all, let's take a look at the XR market. The XR market is now accelerate into the fast lane. So as you can see, this is from IDC and WellsennXR statistics. So as you can see, in the future 10 years, that XR is going to keep a fast-growing lane, and let's take a look at some certain key points. Now '25 to 2026, MR and smart glasses will surpasses 10 million pieces. What does that mean? That means this market is now coming into a big volume. Now it can becoming a self close loop ecosystem. In the future, a few years, as you can see, XR and MR's development is going to grow with the technology. So the devices themselves will become smarter. And this is not just for gaming, but this is for recreation plus productivity tool. And so the CAGR will be 30% to 40%. Now let's see 2030 that the smart glasses shipment will be higher than 50 million. In 2035, that will be 150 million. What does that mean? That means the market of glasses -- overall glasses market, the global market share will be 1.5 billion globally. That will be 10% of penetration rate. So in this smart developing market, XR will certainly bring us a multibillion opportunity. So what is optic mean? Optic means a knife that cuts through this cake in this domain. Now let's take a look at technology as the driver. How optics defines the upper limit of XR experience? First of all, let's take a look at the optics components inside XR. Now MR and smart glasses that separate them. Within MR, the -- we have 2 types of optics. One is the interaction and second is about display. So for -- in terms of SLAM module, VST module, DTOF module, these are for space sensing, gesture recognition, eye tracking and so on. In terms of display modules, including our aspheric lens, fresnel lens, now we have pancake and display system modules. Now within MR, our optic components is around 30 -- 40% to 60%. In smart glasses, optic components will increase. So in terms of interactions, we have all different types of camera modules, including all the cameras being used to shoot and recognize. One is our display optical engine, LCOS or micro-LED. That includes other components in them like prisms and so on. And also, we have other things like VID lens, optical waveguide, electrochromic and so on. These add-up can take around 70% of the optical components in smart glasses. So optics in XR takes a lot of position in XR. And interaction and display is two of the key functions in user experience in the development of XR. Let's take a look how can optics improve its own value in this market. Now let's take a look at MR. PC-based and all the way from Meta Quest 2, we have a lightweight all-in-one with built-in processing and VisionPro, natural interactions. And then in the future, we're going to have a diversified applications with further miniaturization equipment. So within this process, interaction and display will boost its own development from original 6DOF to 6DOF, VST eye-tracking DTOF. All these modules will add up, and then in viewing from our fresnel lens to pancake plus LCD or MicroOLED. And then in the future, we'll have a miniaturized Pancake plus MicroOLED technology. So as you can see, the value of optics is improving. Now in smart glasses, the same as well, as you can see from basic audio, voice assist, video shootings and so on, the interaction components and viewing components has becoming playing more, more part in this. So we have miniaturized demand is even higher than the smartphone demands of miniaturization. So the players with the ability of miniaturize these components will win the most market, like the waveguide of this one. So currently speaking, this is the ceiling of optics industry in waveguide, light source, and all the experience that we've accumulated in the past can play a pivotal role in this. Now let's take a look how optics defines the upper limit of XR user experience. Now 80% of the XR equipment is too heavy because of its optics solution. Now those equipment has only become lab use. So optics see its opportunities in that. So who can play this part well, who can win the customer. So in terms of viewing, as an example, we have Birdbath and Waveguide. So as you can see, we have two different types of experience. For Birdbath, thickness is 20 to 30 millimeter. If we use Waveguide, it can log in at 3 millimeter. So we can have a totally different user experience. For -- by using Waveguide, we can have very different user experience as well. That is because of the choosing of semiconductor and materials. So again, that emphasize optics defines the user experience of XR. So in optics, what has Sunny invested in, what's our -- and also, what have we improved more in that? One is the optical XR strategy and strength, a full coverage of XR optics solutions with the full optical solution coverage, a multidimensional vertical integration and scalable production. Just like I mentioned, the XR modules, all these interactions, modules, space, sensings, eye-tracking, DTOF and all the viewing or display modules. And with all the optics components, they play pivotal roles in these types of products. And besides that, we can make another step that is our overall ODM. So by covering all these different types of products, so that does it mean that we can do this -- we can make this product. That means we can be an important player in that, that is not necessary a 100% because we need a good synchronization between the technology and the product itself. So we need to have the ability of vertical integration from optical components to our overall device integration from lens to pancake to display from Waveguide to our LED optical engines. We need to have this multiple vertical integration capability, and then we can cover all these technical perspectives. By having all this, does that mean a close loop of business operation? No, that's not enough. What's important also is scalable production. By having a commercial scalable production, we can have that business close loop. So here in Sunny, we -- based on our years of experience in scalable production, we can cover all these components and OEM, ODM, we can all achieve scalable production. So now let's take a look in the other niche, not just about totally covering, but we want to be a top player in different reach. One is the interaction modules and lenses as well miniaturization. So Sunny have more than 10 years of experience in this. Through our high-precision molding technology, miniaturized technology, we can now realize the XR module #1 shipments in the world. So also for our other technologies in lens and so on, that bring us more value and competitiveness in this domain. In terms of our MR display modules and lenses, our goal is to achieve leading position across the entire XR optics industry through our coating, lens molding, lens coating, lens funding, so we can achieve this in terms of pancake within the industry. We are now the #1 player in this because we bring more competitiveness in the story. So in terms of optical engine, comparing to the handsets optical engines, optical engines can play a more important role in this domain. So now in terms of LCoS' optical engine, we already achieved ECC level. Super miniaturized, colored, LED and monochrome optical engine. Through molding technology, we can miniaturize our optical engine more than 30%. Through our AA technology, we can have 3x more precision than the normal technology. And next is our -- the bottleneck of the industry that is Waveguide. So this is achieving a leading position across the entire XR optics industry in smart glasses display module and Waveguide now we are using a high performance enhancement in lightweight R&D using full color optical waveguides. Now it's just not the silicon grade optical waveguide solution, but we have a fully laminated optical waveguide solution, including pull lens, AR Waveguide, EC-Dimming and push lens. So in terms of the fundamental materials, we are covering all of them. In terms of the VID lens, we are achieving the thinnest in the history and the lightest. Now the last one, through our overall R&D, this is our complete device ODM. In terms of hardware, software algorithm R&D and manufacturing and process control, we have this overall integration capability. All these can give us our own unique competitiveness in full device ODM. So talking about technology and manufacturing capabilities. We have another important thing that is our customers. So through our customer tech and scale production that gives us a sustainable growth. So in key technology areas like SRG waveguide, semiconductors, materials, manufacturing sustainablization, we are going to make ourselves more competitive than our competitors. So after our customers give the technological levers in our technological competitiveness, it can provide us a better market. And in terms of our scale production growth, our cost will -- can lower our cost. So quality, tech and cost, we have these three dimensions. This will keep us the #1 player in the market. And finally, so within this fast-growing domain, Sunny is going to anchor on the core optical technologies for XR and to seize the optical dividend and the window of opportunity through optical, through vertical integrations, we are going to reach the collectors and the value into scale growth. So if we say XR/VR is the boat and the engine will be the optics. We're not only building the engine but also to lay down new rules for the new era to boost the golden era coming from the XR.

Thank you, Mr. [ Xi ] for your wonderful sharing. Five chapters, one topic surrounding in the XR domain. You give us the value of this future market. And also the investment of the company in this domain give us a solid foundation for the future growth. So XR will definitely be another important engine of growth for this company. Besides XR, robotics is also a key -- clear key domain. And in this domain, Sunny actually invested a lot of technology and experience as well. Also we have already realized some key breakthroughs. Now let's listen the next sharing from Mr. Wang Zhongwei from Sunny Robotic. Now let's welcome Mr. Wang Zhongwei.

Dear investors, good afternoon. So I'm going to share with you our latest development and capacity building as well as the business status of the robotics business of Sunny. So what you're familiar with is this logo. So you know that we have the handset lens sets and the handset camera modules. And you also know about our vehicle lens sets, the modules, et cetera, and just talked about XR business as well. So actually, in robotics business in the previous sharings, we had mentioned a little bit about it but not much. So in this field, in robotics at Sunny, we have a team of 2,000 optical intelligence technology and we have a made a long-term in-depth work in that. And in terms of the richness of the product line, we do have many varieties from the modules to systematic solutions, we have all that. And in terms of the niche market, we have become #1 in multiple niche markets, such as the vacuum robot and the mowers and also the food delivery robot as well as the cleaning robot. And another one, in terms of the scene coverage, we are also very versatile. For example, at home and at the commercial scenes and as an industrial scenes from indoor to outdoor, we have order solutions. So you may know that for robotics, the system framework can be divided into 5 parts. And the first one is the main control and the computing, and the second is driving and actuation, and the third is perception and interaction, and the fourth is power management and the fourth (sic) [ fifth ] is the structure and appearance. So in terms of perception and interaction, it's more about the vision. It accounts for about 80% and vision is the most vital perception. And while we are building our technological capabilities in robotics and having our cases, it's a very long period. And it's not to say that we only started in recent years. And we started actually back in 2014 as we started with the vacuum robot and then the drones or the UAVs, and we have the lightstream positioning module, and we have been doing that in the early time, and we have been constantly upgrading the vacuum robot. For example, the wide-angle RGB type. And later, we have the linear TOF modules, then we have the outdoor application of the delivery robot covering the last mile of delivery and also the home company and the mid- and long-range TOF modules as well as the cleaning robot, food delivery robot, et cetera. And right now, in the next stage, in AMR, we have made substantive progress of the project with the customers. And then in mowers, in Europe, we have gained the trust of the global leaders, and all these projects have a long duration. So we have a plan of the coming 5 years. So we are the core solution provider for these key customers. And with those projects, we had built up our capacity step by step. Here, you can take a look at our capability matrix. From the perspective of the product technologies, we have the interface technology, for example, the built-in actuation, driving operation and the general loss interface and SDK architecture. And in terms of the algorithms, we have the multisensor integration and the object avoidance, robotic arms, grasping and sorting and also the AR environment perception. And in terms of the solution, we not only have the modules, but also the mobile robot vision solutions and operation mobile solutions. We also have the AI vision solution as well as embodied intelligence solution. So if we wanted to implement those technologies in the end, we need to construct the supply chain and manufacturing capability as well. And going forward, what can we do more? What else can we do? We know that when we talked about the functional robotics, we would emphasize SLAM, for example, the obstacle detection, navigation and obstacle avoidance, et cetera. But now one more, we had been focusing on the industry automation with the vision capabilities. And in our company, we also have the technologies of robotic arms, mechanical arms and the vision-guided positioning or localization. So we already have great progresses and won some projects. And also, we have the remote control dexterous hand technology. I believe that for automation and precision operation, this will be very useful. And it includes the location identification, multimodal perception and high-precision recognition and positioning. And of course, at the edge, we have the brain, eye and hand system of AI. And in the end, if we can put them all together in the embodied robots, it will become a very important part. And at Sunny Optical Intelligence Technology Company, we are a manufacturer-based robotic solution provider. So that is to say a lot of the products we produce now are focused on the applicable and high-function robotics. And of course, we had been actively engaged in R&D of the embodied robots. And for the Six Little Dragons in Hangzhou, so they have a monthly shipment of only about 1,000. And I believe that this smart gear cannot fully support this development of manufacturers. So what we value more about is here, that is from vision sensing to the robot system solution co-creation. And in this part, we had built a lot of capacities. And on the one hand, it's about the complete robot calibration and the second part is about robot simulation testing and also about the software system design. So previously, in our understanding, Sunny Optical Intelligence Technology may focus more on the vision sensing. But actually, right now, we already have the whole robot solution. And in this part, the orders we have and the projects we have, I should say, projects, the total value had exceeded RMB 2 billion. So I believe that in a very short time, you will be able to see more such products with high function. So with this kind of transformation, the purpose is that, in the past, we focus more on the product itself. The value mainly comes from the product itself and we reduce the BOM cost and manufacturing costs. But right now, we will value more about the customer application scenes. We wanted to create value for those applications. It's about what kind of a convenience can we bring to the customers? How much money can we help them to save? And previously, we call ourselves the robotics vision provider. But now what we want to do is that based on the vision system, we can become the robotics systematic solution provider. So far, we have made a substantive progresses and along, the recognition of the customers. And we also hope that the Sunny Optical Intelligence Technology can bring more surprises to the investors in robotics.

Thank you, Mr. Wang Zhongwei, for your wonderful sharing. And we also expect that Sunny Optical Intelligence Technology can continue to make progress and to achieve the larger-scale commercial application together with the customers. So this is all of the presentations we have. And next, we will have the Q&A. But before we start, please take a short break, and then we will rearrange the stadium. So please move to the room next door and to enjoy some refreshments and about to chat in 10 minutes, that is 5:35, please come back and we will have a Q&A. Thank you. [Break]

Okay. So before the Q&A begins, I would like to reiterate again that our exchange today in this event does not involve financial data, but also mainly focuses on market developments, technology trends and company business dynamics. First of all, now I would like to take questions from our investors on site. [Operator Instructions]

I'm from [indiscernible]. And first of all, my question is to Mr. Wang. You've mentioned in the past that you planned for the company that you'll have some change in the company. So I would like to ask you like what kind of transformation have you already been applied to the company? And in the future, what would be the direction of the transformation? That will be the first question. And the second question is that every time, each time investors was asking about some key clients or top players in North American markets, can you share with us some of the insights on that?

In terms of the transformation here, so through our video account, you can check on that because for each time, we have already mentioned this. So I would like to reiterate again. First of all, this is to satisfy our clients' demand to create value for our clients and the changes for that. And so we need to put out the vitality of the organization. And also, when I was introducing the company, there's a slide I showed you that the sky, tree and ground structure. So this time, we will strengthen the core competitiveness and the core platform capability building. These are our basic thoughts. The goal is to keep our organizations thrive again and to put up the best competitiveness of the company. So for the leaders of each business domain, they have demonstrated their own competitiveness in their own business and departments. Second question, in terms of the big clients in North America, I cannot tell you -- I can't tell you something specifically, but I'll say it's in good shape. It's in good trend. And in the future, we'll have more business in the future with them.

Okay. Now we'll take the second question from our investors on site.

I'm Huang Leping from Huatai. And I've got 2 questions. First of all is also the slide of sky, tree and ground, that PPT. There's 2 sentence in that PPT that is facing the future. We are going to focus our resource and strength into doing good things and then to optimize our resources to improve our efficiency. Help me understand that. Are we looking on some good business opportunities already? What's that big event about? And as you can see in the past, Sunny optics development for each department is relatively independent when developing. So in the future, how do they coordinate with each other? And the next question is about our robotic business, because as you can see, the positioning of the robotic business actually changed slightly. The supplier of video solution, I think that quote actually changed of the definition of the company. Does that change our development of the -- change the development of the company? So what about our future revenue, future business opportunity? What does it change?

Okay. So that is the expansion of the first question -- the previous one, right? So first of all, you need to be clear about our change. Our change is not based on our business, but our change is based on our clients. So we are emphasizing this all based on our clients. If we can provide value to our customers to better satisfy the demand of our customer, and then that is one of the reasons why we need to concentrate our focus. And more specifically, we probably will use our vertical integration capability. But why do we need to change our structure? That is we need to change internally the way of operation. As you can see that the -- our main -- the change of our main structure and department is to change the way of coordinations within the organization. So the -- Mr. [indiscernible] of XR made the introduction about XR and VR. That is also one of the reasons why we are concentrating our resources on certain domains and to reuse our resource. So in terms of specific blueprint and for -- we will provide different solutions to different clients.

Next, I'll ask Mr. Wang Zhongwei from Sunny Optical Intelligence Technology to answer this question.

Okay. Actually, what we deliver to the clients is in multiple forms. So I'd like to explain a little bit here. So the previous positioning of us is that we provide the vision system solution provider. And now it's the vision-based robotics system solution provider. That means the anchor of us is still vision, but we have made further expansion. Why? In essence, it is still about the demand of the clients because as time goes by, a lot of the clients realize that if we have the boxes of obstacle avoidances and all these modules hand over them, then they have problems in calibration of the whole system. So actually, the reason for us to provide the whole system solution is not because of the revenue, it's because of the demand trend and now we provide multiple forms of deliveries and another 2x. And the first is the box with end-to-end functions, for example, navigation or avoidance of the obstacles. And the other one is the whole robot.

All right. The next question will be from the online investors, and I have seen some hands [indiscernible] calls and ask the question. And the question goes, what is the R&D plan for the coming 5 years? And what are the key directions?

In the coming 5 years, what are the R&D direction? Okay. Actually, during the presentation, I already mentioned about that, and maybe it's a bit too general. So going forward, we have a very clear direction of the R&D. That is from the optical perception, the decision-making and to control. So this is the whole process. And based on data, we can form a closed-loop. This is our general plan. So part by part, we have the lead that is on a lot of basic technology challenges. And generally speaking, in optical perception, we need to improve the optical technologies. And definitely, we need to enhance the transfer of the information after we have obtained them and also the decision-making based on the data as well as the control. So at Sunny, our Research Institute will set up some technological platforms for the development. But for more specifics, you can refer to the technology plan, which we will release in the future.

Thank you very much, Mr. [indiscernible]. And now we will have the on-site investors asking the questions. [Operator Instructions]

I am from CLSA. So about the hybrid glass and plastic lens introduced by Madam Wang Mingzhu, we know that we have got a lot of projects from the main clients. And why is that so? Why we have an application of this hybrid lens this year? And in order to have the wider adoption, what are the challenges? Is it about the yield? Or is it about price? So compared with the plastic lens, what are the barriers for the wider application of the hybrid lens? So maybe some of the details are a bit sensitive.

So for the first part of the question, you asked about why? This year, we have a sudden expansion of the application of hybrid lens. So it is based on the trend I introduced just now. First, we have a high focal lens. So because it is a long range, so we are very sensitive to the thermal drift. So because of the glass property, we can have a very stable usage for controlling the thermal drift. So if you don't use a glass, then it's impossible for you to have accurate control. So what does the high focal lens change mean? That means that 6x or 8x, so this is the first application. And the second thing is about the thinning of the main camera, but the aperture should not be retracted. For example, from 1.1/3 to upgrade it to 1.1/2, that means that the base had been [indiscernible] and the height cannot be increased. It means that we need the property from the glass, that is that higher deflection, higher reflection. So in brief, it means because of the properties of the glass, we are able to bring forward better structure of the optics, we can compress the structure of the optics. So we can make it thinner and not compromising optical performance, especially with the larger aperture, we're able to do that. So with the thinner and larger aperture to upgrade the images, we can use the hybrid lens. And this is the trend we have observed this year. So miniaturization, thinner large base, a large aperture upgrades and the high zoom ratio, meaning the bigger change of the focal lens, we are able to have the better application of the hybrid lens and we have a 400% year-on-year growth. This is the first part of the question. And the second part, you talked about what are the technological aspirations we have? Or what are the barriers? In the industry for the wider application of hybrid lens, as I mentioned, for glass, it's about 300 to 400 degrees of forming. So we need a very high temperature for forming the glasses. And for the mold, there is also a very high requirement, especially for molding glass. And because of this conditional requirements, the precision of the glass surface is a bit different from the plastics. And the molding glass position of Sunny is the best in the industry. So what kind of technologies can we use to supplement the gap in the precision that is the optical component level active calibration. It means that we can do the automatic calibration. It means that in a simple piece of the lens, let's say the over -- difference of the image is no longer a problem. So we can use it to supplement the other part. So this is about the aberration. So the aberration is longer a problem. So maybe we can have several parts, and we need to assemble these parts. So this is about the stability of the assemble. So there should be no deviations or changes after the assembly. So we need to accumulate a know-how in that. So about the molding glass in the premium hybrid lens, Sunny is taking absolute lead in the industry whether it's about spec or the number of shipment.

So thank you very much for the questions. So I have still seen some of the hands from the investors. So keep raising your hand, you can continue to ask the questions.

So my question is, firstly, about the XR. So we have interviewed some of the XR goggle manufacturers, and we try the products and the optical wavelength effect is very good. And we wanted to try to use it, but they say that they don't have enough products, and they mentioned that Sunny is the provider for them and it's out of supply right now. So for the wavelengths, what is the variance and the plans for the capacity and the yield? So for the devices and for the whole product, what is the mid- and long-range plans?

Thank you very much for your question. So the first part is about the optical waveguide and what is the development status right now. So for optical waveguide, the Tier 1 and Tier 2 difference are big. And in Sunny, I believe that we are taking the lead. So for the implementation capabilities at the engineering level or at the project level, we are very good at it. And also, the 8-inch wafer is developing into the 12-inch wafer. So right now, we are still improving the technologies and we collaborate with the top-tier clients, and we had conducted several important projects already. So I believe that our capabilities is indeed taking a lead in the industry, but I'm not going to disclose the specific data. But what I can say is that we are still taking a lead. And the second part of the question is that from the device or component to the whole product, what's our plan and the status? So it's not just about the waveguide. So actually, the component is the basis of our capability. And just as I had introduced in my presentation, we really wanted to be the single champions in each field. So at the whole product level, we had already become the champion. So at the lens and display and other field, we also wanted to become the single champion. And at the whole product level, we are still making development. And among the top-ranking companies in China, we are taking the absolute lead, ahead of the second followers. So with the integration capabilities, we have won the favor of a lot of the top brands. So we have vertical integration capabilities and the strength of the components, and I believe that it gives us a lot of edge. And I believe in the coming years, we will have a better development.

So I have a follow-up question from online, which is about the silicon carbide and what is the application in AI of this material? Are there any challenges and are going to develop the material yourself?

So still me to answer this question. About the silicon carbide, we believe that it represents the future of the industry. And actually, we don't see any real commercialization of this material. And in Orion of Meta, which targets on the developers, we have showcased this material for the first time. But for the whole market, we haven't seen any devices that have been entered into the mass production. But this is a core part of our business and the biggest barrier for silicon carbide is still the cost. The technology is good because we are able to have the large FOV, we can have the big reflection rate. But what we like now is the capability of the mass production. So we have communicated with the top clients, and there have been some progress. We believe that going forward, in silicon carbide, we can continue to take the lead.

Thank you, Mr [ Xi ]. Now I will give the next question opportunity to the on-site investors. [Operator Instructions]

I am [ Chandan from POE International ] and there are 2 directions in my question. The first is General Manager Wang, in your presentation, you introduced the AI capabilities, including the big model development and the debugging capabilities. So I would like to learn about the application of these small models. And what are the areas of operation that we can apply? Do you have any specific cases to share with us? When we are debugging the AI models, how much should be the investment and what kind of talent preparations should we make? So going forward, how would you plan to improve the efficiency of the corporate operations? So this is the first question. Second question, I still wanted to know all about the vehicle business because there are 2 directions. The first is the vehicle camera module because in handset camera module and lens sets and in vehicle lens sets, we are #1. So are we #1 in vehicle camera modules? And when can we do that if we are not yet? So how to do that? And the second part is about the LiDAR. So I heard from your presentation that we already have 2 billion backlog of orders, so it's a big number. And what is the duration of the orders? When will you be able to fulfill the delivery? And compared with, are you competitors or are you partners? And for LiDAR and the camera modules of the vehicles, are these businesses synergistic with each other?

So I'm going to answer the first question. And the rest of the question, we'll give it to [ Mr. Ko ] and Mr. Qiu. For AI empowerment, overall speaking, we've got 2 directions. One is AI is empowering on our product, including from the design of the product to the formation of the product, and we are going to do it closely with the clients' demand. And so we're just starting to do it this way. So in the overall planning, I mentioned that from sensing to decision-making and control, we are going to create value upon these important not points. And second is about AI empowering manufacturing. So for us, it means some -- does have some practical meanings. And so within -- internally, we are always emphasizing that if AI can empower our manufacturing business, it is going to improve our manufacturing capability and it demonstrates in yield efficiency and the improvement of the agility. So the investors ask us about breakthroughs. Actually, we do have it in some manufacturing technologies and the testing of the product assembly of the products. We have already have some clear breakthroughs. The improvement of the yield rate efficiency and so on is a certainty as well. In terms of the investment, it's not really significant. Now what we do have is some fundamental computing capability. That's what we have. This is a long-term investment. It requires a certain development. But we all think that currently speaking, we still need better statistics, filter them out. Having those statistics, we use AI to optimize them. So overall speaking, we are doing some small models and then to link them by using big models. So how can we connect our AI with our equipment and our manufacturing capabilities? All these are the domains that we are making our deployments right now. So we haven't came up with our specific path for that. And it's an important investment though. And for other questions?

Okay. In terms of our vehicle lens set, I'll answer those questions. Now in terms of SmartLead, we have now 3% of global market share because we have a relatively later start. So we are not #1 in the world. Now standing at 2025, now the top market share is 13%. So in terms of rooms for improvement, SmartLead has a certain room of improvement. And we are going to use 3 to 5 years. First step is to grow to top 3 player in vehicle vision players. In terms of the path, one is that our product portfolio now SmartLead is making our emphasis on the 8-megapixel environment sensing. Now we do have higher than 40% of global market share. In terms of market trend, as L2, L3 is coming, no matter is about the amount is increasing or the megapixel is increasing, we are improving ourselves as well in terms of portfolio in the cabinet. We already have some new European and Japanese clients project. So in terms of environment sensing -- expanding from environment sensing, we're going to expand to the cockpit. And second point, in terms of the regions for now in SmartLead, our major clients is still mainly our Chinese customers because the Chinese EV is developing relatively fast trend. It's taking around 90% of our overall projects or clients. And for our overseas clients, only 10%. Now in the American and European market, they are growing very fast as well. We do believe that we'll have extra 5% of growth. So the client structure will be optimized as we go. And third is that SmartLead is growing based on this technology lead by the technology. So in certain user environment like summon or the chassis cameras and so on, we call the Pi camera, right? And for the demand of high resolutions like the 18-megapixel one. So we will be lead by new technology to create the real value of our product and technology. These are the path we are going to take. In terms of LiDAR, probably we're going to ask Mr. Qiu to answer that.

In terms of LiDAR, you mentioned 2 questions. One is the project we already acquired and how can we hand over in a few years, right? Because LiDAR-wise, the mass production is around 3 to 5 years of mass production lifespan. Some of them got longer lifespan. Now it's within 3 to 5 years, we can make a full handover. And in terms of and Hesai because our own positioning is to empower LiDAR players, so Hesai and [indiscernible], all these players, they are our clients. And we do have projects making cooperations with them as well. Thank you.

Okay. Now I do have another online question here. This investor is asking for the 8-megapixel ADAS vehicle lens that is taking off this year. What about 12 megapixel to 18 megapixels? And what about its time frame of taking off? Do you have that?

So for this one, no matter it's 12 or 18 megapixel, we do have our own R&D progress. Looking at the market, we really need to take a look at our clients' own planning, but our internal pace is that within 2 years, 12 megapixel can pass all the certifications, can get all the certifications. And for -- if for the mass production of 18 megapixel, that'll be 4 years later. That's my own opinion.

I think we do have other on-site questions. Please do keep your hands up, and we'll hand the microphone to you.

Okay. I'm from Morgan Stanley. And I've got one question, that is about the robotic. We all know that robotic is a hot concept this year. And Mr. Wang mentioned some of the robotic business in Sunny. So within the robotics features, so within Sunny's own vision solutions, in terms of the market share comparing to smartphones and other business domains, are we having more competitiveness in this robotic domains? And coming to other clients, what is it like? And also, can you further share with us the -- for one camera module, its value comparing to cleaning robots or smartphone products, was it like how many lens set has been installed into 1 unit can bring us more revenue for Sunny?

I'm going to answer this question. So for the robotic and we have a shared concept that is when it entered the market, and we don't -- it's not really a fast market entering. So we cannot make full analysis about market shares and so on or the shipments. But this is a relatively large concept. I've mentioned the shipment of a certain customer. I think they are relatively doing pretty well. It's around 1,000 per month, more than 1,000 per month or other robotics. They are still in its growing stage or start-up stage. In terms of the application of this kind of robotic, currently seeing, it's about our own national strategy that they need to develop this type of product. Now if we really need to go into our consumers' domain or industrials domains, and it does not require very human-like robot. But the key is to solve your problem, do jobs for you. So it will probably be hand, eye, brain system. So you can imagine that if you have a very smart robot in your home, you feel unsafe, right? If it's too dumb, and then you don't think it's valuable. What you need is a robot that can fully cook for you, do the laundry for you. And industrial-wise, is going to help you to relieve workers from repetitive works. So for this type of robotic you're mentioning, it's very hard for me to make analysis about what's the market volume or the market share. I don't think it's meaningful for doing that. In terms of hardware, you can see the drone market. If you're only doing hardware, you really -- you won't have a high price in the hardwares because in the smartphone industry, we already tell us the cost should be down, but within the robotic, the modules, that's been adopted into them. I think the volume in terms of the modules stepped into them will have more volume, not just about in its hand or its value and also in this chassis and on hand, we'll have more modules. And also in terms of the requirements to 3D of point cloud structuring, we'll have more high requirements for that. So here in Sunny, what we're looking prosperous are those already mature functional robots like lawn mowers. You can check them out. For lawn mowers, I think we have around 200 million lawns need to be mowed. You need to have machineries to deal with that. In the past, it's manual, right? Some need to drive it, some is that we need to push it to mow the lawn. But it is a hot demand. If there's about 120 million of lawns we need to do mower, and we have more than 100 millions of these lawns, lawn mowers each year. So for this equipment, they were taking gasolines, right? And now it's just like EV industry is they're all electrified right now. Now it's equipped and is ready for being -- turning them into smart devices and the amount of them will grow as well. So the value is increasing. So that will be my answer for you. Thank you.

Next question, now we'll be taking questions on site.

I'm from [indiscernible]. My name is [indiscernible]. I've got a question that is our handset optical upgrade sustainability for the upcoming 3 years because we mentioned that in periscope, we have this multi-life folding path and continuous powering or zooms system. But in the future, what will be our breakthroughs and innovations be like? And besides miniaturization, OIS in the future 3 years, what will be our upgrade driving force?

All right. To answer that question, one is that we have mentioned the upgrade of our optic system, the sustainability of the upgrade of optical performance system. We mentioned one, we're talking about telephoto zoom. What does that mean? That means full focal lens coverage. Now we've got 4 camera modules in our hand phones. We have got the periscope, we have got the portrait, and we have got 0.5x, 1x and 3x of zoom. Now some cell phones, they're covering 1 and 5x Zooms being covered in the headphones, some is 0.5, 1x, 6x, 8x of the Power Zoom. So for full focal lens coverage will certainly be a development in the future. If not covering them, we say that in the cell phone videotography, we need to -- they are becoming more professional to film cinematic like professional video, not just amateur short video, but a cinematic like professional grade video. And from the camera lens equipped on our phones right now, they are just for stills or photos. For the still photos to the cinematic videos, actually still got a long way of development. It is a very in-depth track and from our mobility developing to professional.

So I just talked about the whole coverage of the focal lens. It requires the increase of the number of lens. And in order to be able to cover more focal lens rangers in a smaller space, the components complexity will be increased exponentially. So for example, the prism, we have 1 reflection to 5 reflections and it's just an example. People say that because of the enhancement of the complexity, there is a lot of increase of technological development, and it's not a linear development. It's much steeper line. So it means that we do need to have integration capabilities because we cannot expand the space anymore. But the cinematic video shooting capability is something we all want and we will invest a lot in that. So I only talked about the focal lens coverage. We not only have that, but also have the continuous zoom of the apertures or variations of the aperture. So now for every handset, this is a fixed aperture. For example, previously, we have large aperture such as f/1.6 and f/1.4. But we need to cover from 1.4 to -- 4.0 continuous variation of the aperture and the complexity further increases. And we not only have the higher hardware complexity, but also the software complexity that is the control. So we need to do so many switches and continuous variations. We also need to pay attention to the control of that. So -- there is a lot of growth there. I am very optimistic about it. So apart from prism or periscope, what are the other development potentials. And when we talk about this topic, we will transfer from photo taking to video shooting. So the growth of the video demand, we have seen the need for the change of components forms, for example, the optical stabilization. So previously, we have the 1-degree stabilization. But now if we wanted to have a more stabilized video shooting process, we need to increase the degree to negative and positive 5 degrees, then -- let me give you an example. If you move horizontally, we need stabilization. We need to stabilize the lens and chips, and we cannot reduce the performance in the same time and we will have the macro gimbal and then it may be built inside this handset. So I believe that in total, the higher demand for video shooting is something we must pay attention to, and we have already been making a lot of investment and development. So I have a question from online. You have more and more overseas clients and do they have a new need for Sunny's overseas deployment? And how to respond to such needs?

So we have more and more overseas clients. How to make a new overseas arrangement? So actually, these are 2 different things. We have the global business, but it doesn't mean it will affect our overseas development. Even though we only have the company or a factory in China, we are able to cover the whole world's market. So if you ask about the overseas [Audio Gap] we have those in Vietnam and India. So suppose there's need to expand the overseas [ traction ] base, we will consider that, but we need to go through very complicated review and discussion process. And it involves the multilateral trade relations, but the overall thinking is that we still need to build our core capabilities. Suppose the digitalization and management capabilities of Sunny had to be improved, then it will be easier for us to have the overseas development. And automation capability is also achieved because the biggest problem now is the local team, local people. So with automation, we don't need that many talents, right? So for overseas development, we also want to collaborate with the local partners and it will support our overseas success that will support our overseas development a lot.

All right. Thank you, Mr. Wang. And any more questions from on-site, we can continue asking.

Hello, management. So I'd like to quickly follow up on the ADAS business because from the PPT presentation, I have seen that you have moved it forward, and I can see that the management really value this business. So at the industry level at the beginning of the year from the launch of the product from BYD, there have been a lot of the secondary market investment, but we have seen some fluctuations of the shipment and the ramp-up. But based on my own market investigations led by BYD and also followed by Geely and the Chery with further actualization development, will you change the pace? For example, for overseas clients, will you change the pace because you already have the production capacity in Vietnam.

So I don't understand you. Can you keep it brief and clear? Can you make it short? So you have such a long description. I don't know the key part, what's the focus?

Sorry. So my question is for ADAS clients, what should be your plan for the second half of the year and the next year? So for example, the orders from BYD or some other overseas clients?

Well, I can take this question. You talked about ADAS. So BYD had launched the product of ADAS and also Geely is [indiscernible] And this indeed has greatly advanced the specs, upgraded specs of ADAS cameras. But in terms of the number of cameras we provide, we are not the largest supplier. So we need to look at this issue from 2 perspectives. Well, apart from BYD, we also pay attention to the models of Chinese companies sold overseas. It means we need to improve the quality. So this is my answer to your question.

And about the lens [ sets ], maybe Mr. [indiscernible] can answer your question as well.

Because of the ADAS business of BYD, we got a lot of orders for the lens. And I think BYD not only drive the development of ADAS in China, but also that of the world. And we had collaborated with so many Tier 1 OEMs. And I believe that Geely is the most active one of the follow the trend. And some overseas clients also had paid more attention to the development of ADAS. And I believe that with the new launch of BYD, it will definitely drive the higher demand for the sensors. And in 2025, the demand for the vehicle lens has been increased by 20% year-on-year at a global level. So this is a big increase much faster than the previous years. And personally speaking, I think it's a good business.

So due to the interest of time, we will have the last question from the on-site investors.

I have a question because in the previous years, there have been some of the fluctuation in the handset market, but the competitor from Taiwan, they still maintain a very high level. So my question is that in the coming 3 to 5 years, do you think that we should try to reduce their market share or increase our market share because a lot of people are very curious why their margin -- net margin is still so high, especially with such a ferocious competition, why their net margin is so high. So do we need to increase our net margin as well?

What's the question, again?

Let me repeat my question. Keep it short. The Taiwan competitor has maintained a very high level of net margin. So what's our countermeasures? Do we need to try to reduce their margin level or increase our own?

So Largan is a great company, and we have been learning from them all the years. So technologily, we have been benchmarking against them. And every time they have a new product launch, we do a lot of technological research and analysis. So Largan has become the #1 company for many years, and we have been a follower. We are chasing them. So step one, in terms of the number of the shipments in the presentation, we already had shared with you our development. Right now, we had surpassed them because -- but in terms of the revenues, we are still following them. So in the coming few years, we will make plans. In terms of the sales numbers, we want to exceed them as well. And in terms of the technologies, I should say we need to go deeper in technology development. So in the underlying logics and basic technologies, such as the mold technologies, we need to have more intense development. And the market share have increased because of that. This is one thing. And another thing, I said in terms of the number of products we sell, we had exceeded the Largan, but the sales revenue is not. So in the flagship of main products, previous rate of proportion is relatively low. But in recent years, after we figured out the basic technologies and ideas, now we have a higher and higher percentage in the sales of the flagship [indiscernible] products. So in [ Android ] flagship models, our share has been much higher than that of the Largan. And the only thing is that for the A company, their share is much larger than ours because we only started to collaborate with the A company in very recent times. So they have made a very long-term development in collaborating with the A company in terms of the gross margin because Largan has the better say in the technology bargaining. So in the future, we will have a more differentiated strategy in the competition. For example, we have the 1-inch product, whether it's for the handset or non-handset products, we have a very high market share. For example, the periscope lens and in terms of the bargaining in these areas, we can compete with Largan as well. So going forward, in the handset or lens sets, we will also try to increase our gross margin. That's my answer. Thank you.

So I have something to add to this question. You talked about how to make the selections, whether we increase the margin or reduce their margin. Definitely, it's the first idea. We will increase our net margin. And I can share with you my perspective. The first is the plastic lens, for the full plastic lens, we're going to have a very big breakthrough high-precision assembly technology and also molding technology. So for plastic lens, we are going to have a more optimized solution. And also for the hybrid lens technology, no matter it's in the aspherical lens, we are leading our competitors in this perspective. And third is that in the future, we are going to have more lens assembly in different groups of lenses is going to need to have a very precise AOA technology. We have more than 400 patents in this perspective. And also we are the leading player in the industry that can achieve mass production. And the next perspective is that to tackle with limited space, squeezing space and also at the same time, we need to upgrade the sensor size, larger apertures and focusing capabilities is going to give us something that is lens plus actuator plus prism plus ceiling is going to have a lot of variations. We have a more comprehensive systematic accumulation that is without doubt because we have our optic solutions throughout the years, there are history. So in order to face the changes for the systematic challenge in the future, we are more prepared. And also to face the 4 digitalized factory investments. In this perspective, we are doing our best as well. So in terms of digital management, not just about factory, but starting from the optical design to R&D to digital full length -- to full path of digitalizations, our investments will demonstrate a further capability. So from all these 5 perspective, we will be a more optimized solution provider. All right. Due to time limitation, we cannot take all the questions from our investors. And -- but don't worry because we have dinner gala. And during that time, please do make exchanges with our management. So we'll stop the Q&A session here. Now please move to the ballroom and to have dinner and follow the instructions of our staff. Thank you.