TOREAD(300005)2023-07-02 09:10Company Overview and Strategy - The company adheres to a dual-core strategy focusing on outdoor equipment and chip businesses, aiming to expand operations and enhance profitability [3] - The outdoor business emphasizes long-termism, focusing on proprietary brands and exploring domestic and international outdoor sports markets [3] - The chip business aims to become a leader in high-quality display ICs, with a focus on Mini/Micro LED display driver ICs, touch ICs, and smart equipment [3] Outdoor Business Performance - Outdoor business revenue for January-May reached 450 million yuan, a 29% year-over-year increase [4] - Sales turnover for the same period was 620 million yuan, up 48% year-over-year [4] - Gross margin improved to 49.6%, up 1.3 percentage points year-over-year [4] - Average store efficiency for January-May was 116,000 yuan, a 66% increase year-over-year [4] - Over 80% of stores were profitable during this period [4] Chip Business Developments - The company acquired G2 Touch for $38.52 million, gaining a 72.79% stake, which was consolidated into financial statements starting June 1, 2023 [5] - G2 Touch specializes in touch ICs for LCD and OLED panels, with a focus on laptops, smartphones, and tablets [5] - G2 Touch's On-Cell technology offers advantages such as higher resolution support and 25% lower power consumption compared to In-Cell technology [5] - The company also acquired Beijing Xineng, a leader in Mini/Micro LED active display driver ICs [6] Operational Strategies - The company implemented a "3 plus 2 minus" inventory management strategy to improve product turnover [4] - Strategies include reducing procurement, optimizing product categories, increasing sell-through rates, focusing on core products, and increasing flexible ordering [4] - The company aims for an 80% success rate in new store openings, balancing quantity and quality [4] Market and Competitive Advantages - The company has a strong brand presence, having won the C-BPI® China Outdoor Equipment Brand Power Award for seven consecutive years (2016-2022) [7] - It offers a comprehensive range of outdoor products, covering various scenarios and consumer needs [7] - The company has significant R&D and technical advantages, including the proprietary TIEF technology platform and participation in drafting 26 national and industry standards for outdoor products [8] Future Outlook - The company plans to expand its chip business through both organic growth and acquisitions, aiming to balance revenue contributions from both outdoor and chip businesses [6] - It is exploring opportunities in the camping market and collaborating with camping bases to enhance product adaptability [7] - The company is also focusing on international expansion for its chip business, leveraging G2 Touch's technology and market presence [9] Investor Q&A Highlights - The company clarified that outdoor business revenue and sales turnover differ due to revenue recognition and profit-sharing arrangements in joint ventures [6] - It confirmed that outdoor business does not include tourism and has no plans to expand upstream [7] - G2 Touch and Beijing Xineng have synergies in product, customer, and technology, enhancing the company's chip business competitiveness [8]