Unilumin Technology was surveyed by 93 institutions: The company is the first domestic company to obtain Hollywood DCI movie screen product certification. It has been deeply involved in the movie sc

Unilumin Technology released an investor relations activity record form on August 14. The company was surveyed by 93 institutions on August 11, 2023. The types of institutions were QFII, insurance companies, others, fund companies, securities companies, and sunshine private equity institutions. Introduction to the main contents of investor relations activities: 1. Introduction to operations in the first half of 2023 In the first half of 2023, the company achieved total operating income of 3.299 billion yuan, an increase of 4.21% over the same period last year, of which the company achieved net profit attributable to the parent company of 221 million yuan Yuan, a year-on-year increase of 81.33%; net profit after deducting non-attributed profits to the parent company was 266 million yuan, a year-on-year increase of 123.72%; net cash flow from operating activities was 350 million yuan, a year-on-year increase of 10,942.66%. During the reporting period, the company achieved overseas revenue of 1.820 billion yuan, a year-on-year increase of 3.43%, and domestic revenue of 1.479 billion yuan, a year-on-year increase of 5.20%. The domestic business gross profit margin was 18.99%, the overseas business gross profit margin was 38.68%, and the overseas business gross profit margin increased by 6.13 percentage points year-on-year. Thanks to the company's years of hard work on sound operations, management effectiveness is gradually reflected in performance. As the market picks up and the economy recovers, overall downstream demand, especially domestic business demand, is gradually released. The company will rely on its advantages in professional subdivisions, such as XR virtual photography, virtual digital people, "AI+LED" integrated solutions, digital assets and other first-mover advantages, Mini/Micro LEDThe forward-looking product layout, as well as the technology and experience accumulated in the field of LED ultra-high-definition display large screens for many years, and the rapid response after-sales service have fully benefited from the dividends of the recovery in industry demand.

2. Investor communication session

Question: What is the reason for the decline in net profit in the second quarter compared with the first quarter?

Answer: Net profit in the second quarter was higher than that in the first quarter.The decline is mainly due to the demand of the international high-end market with higher profit contribution (1) longer purchase decision-making cycle, (2) increased sensitivity to product prices, which has greatly affected the company's high-end sub-brand Radio. In response to the above situation, the management of Radiodio, the company's wholly-owned subsidiary, has made product response plans to adapt to changes in market demand. Radiodio's performance contribution will be repaired and improved quarter by quarter.

Question: What is the revenue share of each overseas region of the display business in the first half of the year?

Answer: The distribution of overseas revenue of the company's display business in the first half of 2023 is basically consistent with previous years, with the Americas accounting for more than 40%, and Europe and Asia and Africa accounting for nearly 30% each. In the first half of 2023, the display business revenue in the Asian and African markets has increased significantly, with a year-on-year increase of approximately 25%.

Question: What is the outlook for overseas and domestic markets in the second half of the year?

Answer: At present, the domestic market demand is gradually recovering, the order conversion rate has increased, and the gross profit margin continues to improve. Overseas market demand has become more sensitive to price, the high-end market decision-making cycle has become longer, and the mid-to-high-end market demand remains resilient. At the same time, the strong US dollar exchange rate has a certain positive impact on the gross profit margin of overseas business.

Question: What is the development prospect and plan of Mini/Micro LED technology?

Answer: Mini/Micro LED is the future development trend of the industry and the company's focus. As the pitch continues to decrease, the industry application space will continue to open up and the growth potential is huge. At present, the company has launched a variety of micro-pitch products. The company firmly chooses the technology path of co-existing COB and MIP packaging methods, equipped with the company's unique UIV image quality engine and self-developed control system. The overall performance is excellent in terms of display effect, lamp surface temperature rise, contrast, flatness, ink color consistency, etc. The screen energy saving is increased by 50%, and the reliability of the lamp beads is increased by 10 times. In the future, the company will comprehensively lay out the COB and MIP technology routes and products, implement solutions and applications, and simultaneously develop COG and silicon-based Micro In LED technology research and development, we always seize the development opportunities of cutting-edge technology, steadily increase market share, and prepare technical reserves for entering the civilian-level market. In addition, in view of the huge potential of Mini/Micro LED in many new application fields in the future, the company actively develops various products, with LED display products as the core, providing products and services such as systems, software, content, and design, and creating full-process solutions, such as movie screens, conference all-in-one machines, XR virtual shooting, CAVE immersive art spaces, etc.

Question: COB as Mini/Micro New process technology of LED, price trend of COB products?

Answer: At present, the price of COB products has dropped significantly compared with the past, and it is expected to maintain a downward trend in the second half of the year. The room for price reduction mainly comes from the price reduction of raw materials (especially the price of Micro chips) and the improvement of the yield and efficiency of its own production process. With the development of the industry and changes in technology,As the market continues to mature, cost reduction will bring significant substitution effects. P1.2 products will gradually replace P1.5 products, and P0.9 products will gradually replace P1.2 products. The company will continue to work hard on Mini/Micro LED products to promote continuous iterative upgrades of industry products.

Question: What are the future development prospects and company layout of movie screens?

Answer: The company is the first domestic company to obtain Hollywood DCI movie screen product certification. It has been deeply involved in the movie screen field for many years. Currently, it has 4 products that have passed DCI certification, and it is also the company with the most certified products in the industry. This year, the movie market has seen frequent hits and is recovering rapidly. Cinema consumption and occupancy rates have increased significantly, which makes cinemas more willing to upgrade hardware or make new investments. Compared with existing high-definition movie machines and screens, movie screens have unique advantages in display brightness, contrast, color gamut, ultra-high resolution, etc., and may become mainstream equipment in high-end movie theaters in the future. With further iterative optimization of the process, combined with the scale effect of manufacturing, the movie screen will form strong competitiveness. The company is also confident to simultaneously promote the movie screen market and reap the dividends of the movie screen market.

Question: What are the current applications of XR virtual shooting technology and the development of the company’s related businesses?

Answer: The company has performed well in the overseas virtual shooting market in the past few years, with Radiodio ranking first in global market share. Overseas virtual studios are mainly focused on film and television production and high-end commercial advertising business, with the characteristics of high investment, high cost and high technical standards. Driven by various successful overseas cases, the domestic XR virtual shooting market demand has continued to emerge this year. The demand for domestic XR studios is wider, such as film and television bases, TV studios, live broadcasts/press conferences/performances, exhibitions, practical training and teaching, etc. In China, lightweight, easy-to-use, and cost-effective are the main demands. At present, domestic talents for virtual shooting in the early, middle and late stages are scarce, so high requirements are placed on the full-process solution capabilities of LED hardware suppliers. The company has a first-mover advantage in this field. In addition to hardware, the company has also laid out various key technologies such as control systems, content production, and special effects rendering. The self-developed XR control system has been applied in multiple projects; the self-developed rendering server solves the problem of high costto solve problems and provide customers with cost-effective solutions; the company is building its own digital asset platform and has currently established hundreds of digital assets with completely independent intellectual property rights.

Question: How does the company view the virtual digital human industry? How will AI and virtual digital humans be combined?

Answer: Virtual digital people are a market worth hundreds of billions, starting from the large AI modelSince its launch, the market has developed very quickly, with many outstanding companies participating. The company mainly focuses on the field of AI applications and develops AI applications according to its own business needs. It is the leader in the implementation of AI applications in the LED industry. With the development of the LED display business, the company has gained insight into customers' needs for content display and information interaction. Therefore, it has established a dedicated content team to develop various scenarios, character IPs, etc., developed virtual digital people, and entered the digital asset track. Related products have been widely praised by B-side customers. Based on its position in the LED industry and related R&D capabilities, the company has been recognized by leading companies in the fields of artificial intelligence and virtual digital humans, and has established a variety of partnerships, such as ISV certification between Microsoft and Dell, and technical and business cooperation with companies such as Baidu and iFlytek (002230). Virtual digital people and digital assets are an important part of the company's "hardware + system + software + content + interaction" full-process solution. With the help of existing AI tools, content production efficiency and intelligent interaction levels can be greatly improved. AI injects "interesting soul" into virtual digital people. This type of "AI+LED" integrated solution will effectively increase the added value of the company's hardware products, build a new business ecosystem, and create a new performance growth curve.

Question: What is the company's positioning and development plan for the AI ​​virtual digital human business?

Answer: At present, virtual digital people and digital assets are still sold as part of the project as an overall solution, which not only increases project profits and added value, but also strengthens brand influence and customer reputation. In the future, depending on business development, the business model may also shift to more diversified services and charging models. In the future, relevant virtual scenes and virtual digital people will all be operated on the company's digital asset platform to provide customers with more convenient services and build an openThe content production and consumption business ecosystem will quickly penetrate among B-end customers, promote the continuous evolution of the smart display business, and contribute an important force to the birth of the "Metaverse". During the communication process of the meeting, the company's reception staff had full exchanges and communication with investors, strictly followed the relevant system regulations, and there was no leakage of undisclosed major information.