Company code: 688220 Company abbreviation: Aojie Technology

Aojie Technology Co., Ltd

Summary of the 2024 Annual Report

Section 1 Important Notice

1. The summary of this annual report is from the full text of the annual report, in order to fully understand the company's operating results, financial status and future development plan, investors should go to the www.sse.com.cn website to read the full text of the annual report carefully.

2. Major risk warning

The Company has detailed the various risks that the Company may face in the course of its operations and the countermeasures to deal with them, please refer to Section III "Management Discussion and Analysis" of the Annual Report.

3. The Board of Directors, the Board of Supervisors, the directors, supervisors and senior management of the Company guarantee the authenticity, accuracy and completeness of the contents of the annual report, and that there are no false records, misleading statements or material omissions, and bear individual and joint legal liabilities.

4. All directors of the company attend the meeting of the board of directors.

5. PricewaterhouseCoopers Zhongtian Certified Public Accountants (Special General Partnership) issued a standard unqualified audit report for the company. 6. The company is not profitable and has not yet achieved profitability at the time of listing

√ Yes □ No

Because the wireless communication chip design industry engaged in by the company has the characteristics of high technical threshold, intensive high-end talents, long R&D cycle and large capital investment, and the main competitors are large enterprises at home and abroad, the low gross profit margin of products caused by continuous large R&D investment and fierce competition is the main factor that leads to the company's unprofitable performance in the case of sales scale has not reached a certain level.

7. The profit distribution plan or the plan for the conversion of provident fund into share capital for the reporting period approved by the board of directors

The 13th meeting of the second session of the board of directors held on April 7, 2025 reviewed and approved the "About 2024 Profit Distribution

In view of the negative undistributed profits of the parent company, in order to ensure the normal operation and sustainable development of the company, the company's profit distribution plan for 2024 is not to withdraw the statutory surplus reserve fund and arbitrary provident fund, and not to distribute profits. The profit distribution plan is subject to the approval of the general meeting of shareholders.

8. Whether there are special arrangements for corporate governance and other important matters

□ Applicable √ Not applicable

Section 2 Basic information of the company

1. Company profile

1.1 Company Shares

√ Applicable □ Not applicable

Company stock profile

Stock Type Stock Listed Exchange Stock Abbreviation Stock Code Stock Abbreviation Before the change

and plates

A-share Shanghai Stock Exchange Aojie Technology 688220 Not applicable

Science and Technology Innovation Board

1.2 Brief description of the Company's Depositary Receipts

□ Applicable √ Not applicable

1.3 Contacts and Contact Details

Secretary of the Board of Directors and Representative of Securities Affairs

Name: Han Min, Bai Weiyang

Address: Keyuan Road, China (Shanghai) Pilot Free Trade Zone, China (Shanghai) Pilot Free Trade Zone Section

No. 399, Building 10, 8 Floors (Nominal Floor, 9 Floors) No. 399 Yuan Road, Building 10, 8 Floors (Nominal Building

Layer 9)

Tel: 021-60336588*1188 021-60336588*1188

Fax: 021-60336589 021-60336589

E-mail ir@asrmicro.com ir@asrmicro.com

2. Brief introduction of the company's main business during the reporting period

2.1 Main business, main products or services

The company is a platform chip enterprise that provides wireless communication and ultra-large-scale chips. At the same time, it has the R&D and design strength of full-standard cellular baseband chips and multi-protocol non-cellular IoT chips, and has the ability to provide ultra-large-scale high-speed SoC chip customization and semiconductor IP licensing services. During the reporting period, the main business included chip product sales, chip customization services and related product sales, and semiconductor IP licensing.

1. Chip products

According to the different networking methods, wireless communication networks are mainly divided into cellular mobile communication systems and non-cellular network mobile communication systems. The company's main products are cellular baseband chips that support cellular mobile communication systems and non-cellular IoT chips that support non-cellular mobile communication systems.

(1) Cellular baseband chip

The company's cellular baseband chips are as follows:

Category: Series, Function, Application Scenario

It is suitable for Internet of Vehicles, smart payment, and work

It can support 2G, 3G, 4G, 5G communication standards

Baseband communication chips are the Internet of Things, smart security, and smart electricity

Quasi-communication under a variety of network standards

cellular baseband network and other scenarios

The chip supports more than 2G, 3G, and 4G communication standards

Mobile smart terminals are suitable for mobile phones, smart wearable devices,

networked communication. Voice is integrated

Chips: smart payment, smart home and other scenarios

Multimedia functions such as calls, videos, and photos

(2) Non-cellular IoT chips

The company's non-cellular IoT chips are as follows:

Category: Series, Communication Protocols, Features, Application Scenarios

Low power consumption is suitable for smart metering, work

It supports communication under the LoRa network standard and has a long time

LoRa System LoRa Industry Internet of Things, Smart Security

The communication distance and low power consumption are advantageous

chips and other scenarios

It is suitable for smart payment, smart payment

It can be used as the main control chip of smart IoT devices or only

Highly integrated WiFi/WiFi smart security, smart home to

Provide a functional chip for data network connection, realized

Non-bee WiFi chip Combo and cellular mobile broadband devices

WiFi and Bluetooth chip communication function

Nests and other scenes

Networking High integration low

The chip is highly integrated with RF transceiver, Bluetooth signal processing, and is suitable for smart wearable devices

Bluetooth BT/BLE power consumption

MCU, power management integration, smart home and other scenarios

chip

Suitable for smart wearable devices

Beidou Navigation can be used with Beidou Navigation, GPS, Glonass, Galileo

Global navigation, Internet of Vehicles, positioning and chasing

/GPS/GLONAS and other satellite positioning systems for communication positioning, covered

Positioning chip traces, industrial Internet of Things, hands

s/Galileo currently has all the world's satellite positioning systems

machine and other scenarios

2. Chip customization services and related product sales

Chip customization service refers to the design of specially customized chips for customers according to their needs. The main customers of this service include artificial intelligence algorithm enterprises, Internet enterprises, big data enterprises, industrial control enterprises, etc. The company has strong platform-level chip design capabilities, and can provide the above customers with a full set of solutions from chip architecture definition, to chip design, packaging and testing, mass production reliability certification, mass production operation, and even supporting software development, to meet their customized needs for specific chips and improve product competitiveness.

3. Semiconductor IP licensing services

Semiconductor IP licensing services are focused on verified, reusable, and specific functionality required for integrated circuit design

The modules are licensed to customers and the corresponding supporting software is provided. At present, the company provides separate authorizations mainly about the figure

Such as processing-related IP, high-speed communication interface IP, and RF-related IP.

2.2 Main business model

The company is a professional chip design company, and has always adopted the Fabless business model since its establishment. The business model is line-based

The business practice is determined by various factors such as the company's internal and external business environment, customer needs, etc., and is in line with the company's actual business development needs. 1. Profit model

The company is mainly engaged in the research and development, design and sales of wireless communication chips, and the company's product line is mainly composed of cellular baseband chips and non-cellular Internet of Things chips.

In addition, based on the chip design capabilities and IP reserves accumulated in the process of chip product research and development, the company also provides customers with chips

Chip customization and semiconductor IP licensing services. In the chip customization business, the company completes the design of related chip products according to the customer's chip customization needs, realizes chip design service income by delivering it to customers after verification, and realizes custom chip sales revenue through subsequent sales of customized chips. In the semiconductor IP licensing service, the company licenses the semiconductor IP formed in the process of product development to customers to realize revenue.

2. R&D mode

The design and development of chips is the core link of the company's operational activities, and the company has formed a standardized management from the establishment of new products, the determination of new project plans, product design, technical verification, mass production and other important links to ensure the expected research and development goals.

The specific process of the company's new product development is as follows:

(1) New product project

The company's marketing department will actively obtain cutting-edge technology information, pay close attention to industry trends, in-depth research on market dynamics, dig deep into customer needs, work with R&D personnel and operation personnel to conduct feasibility analysis of new product projects, put forward project proposals, and organize project review meetings.

(2) The new project plan is determined

After the project review meeting is passed, the marketing department, sales department and R&D personnel jointly formulate a product development plan, determine the project schedule, product specifications, software and hardware design requirements, etc., and compile the "Project Plan". Determine the project manager, select the research and design personnel from each department to form a project team, and officially enter the new product design stage.

(3) New product design

After entering the product design stage, the system architecture design engineer first conducts the product architecture design, and then each R&D team is responsible for the functional design of the corresponding part. The design of new products mainly includes circuit logic design, layout design and simulation verification. After the R&D team completes the simulation verification, the circuit design is converted into a layout and verified to ensure that the chip can achieve the expected functional requirements. At the same time, the software R&D team simultaneously completed the relevant software development and system-level simulation verification work. After all the above design work is completed, the project manager will organize a review meeting, and after the comprehensive evaluation is passed, the company will submit the chip design data to the wafer factory to confirm the tape-out.

(4) Product technical verification

After the wafer factory completes the tape-out, the packaging factory completes the packaging to form a chip sample and returns it to the company. At that time, the operation department will arrange engineering trial production with R&D personnel to test the performance of the chip. If the design is still flawed in this link, it will be returned to the R&D team for further revision of the chip or modification of the design for re-tape-out; If the expected performance is achieved, the tape-out is successful. The test results of the chip will be fed back to the project team in time so that problems can be found in time and repaired or improved quickly. Chip samples of new products will undergo repeated tests until the samples have passed all verification stages before the project can enter the customer trial production and mass production stage.

(5) Trial production and mass production

In the trial production stage, the operation department will arrange a small batch trial production of the product, and the project manager will organize the marketing department, the operation department and the R&D personnel to review the trial production results, and after the review is passed, the project product will officially enter the mass production stage. After that, the marketing department will regularly track sales, customer satisfaction and competitive product analysis, etc., and feedback relevant information to relevant R&D personnel, and work together to continuously improve the market competitiveness of products.

3. Procurement and production mode

For the chip product business, the company adopts the Fabless model, only engaged in the design and sales of chips, and does not engage in production activities.

The company is responsible for formulating chip specifications, completing chip design and verification, and providing chip design layout, so the company needs to purchase customized processing and production wafers from wafer manufacturing plants, purchase packaging and testing services from packaging and testing plants, and complete production activities such as wafer manufacturing and packaging and testing through outsourcing.

For the chip customization business, the company will confirm whether it is necessary to purchase IP from the outside according to the contract requirements signed with the customer

Purchase IP and own IP to develop the chips required by customers. After completing the design of customized chips, for businesses that have the demand for mass production of customized chips, the company will place orders to wafer factories and packaging and testing factories to produce customized chips according to the order requirements and sell them to customers as agreed.

For semiconductor IP licensing services, the semiconductor IP licensed by the company is developed by the company itself when developing chip products

Validated, reusable, and function-specific modules are licensed without outsourcing.

4. Sales model

During the reporting period, the company's chip product sales adopted the sales model of "distribution + direct sales". The company's domestic business mainly adopts buyout distribution, and overseas business mainly adopts agency distribution, and the agency distribution mode recognizes revenue after the dealer realizes sales to end customers. Based on industry business practices, combined with factors such as customer popularity, strategic partnerships, purchase quantity or amount, and cooperation stability, the company gives certain discounts or rebates to some direct or indirect customers.

The company's chip customization business adopts the direct sales model. The company understands the customer's customized needs and provides a preliminary project plan, and then formulates and communicates further technical solution details with the customer based on the discussion and evaluation of the R&D and operation departments, including design implementation, estimated schedule, budget, preliminary functional demonstration, etc. After determining the technical details, the company makes a quotation to the customer and signs an agreement to deliver the customized chip in accordance with the agreement.

The company's semiconductor IP licensing adopts a direct sales model. The company communicates with the customer to determine the other party's IP needs, including the need to realize

functions, performance parameters that need to be achieved, and the scope of application of IP licensing, etc. After the two parties reached a consensus, a formal cooperation agreement was signed, and the company delivered the IP results in accordance with the agreement.

5. Marketing model

In the company's current business model, the marketing work is mainly led by the company. The company's sales staff actively look for and visit companies with potential cooperation opportunities through their own research on companies in the industry. At the same time, the company is constantly passing

Professional exhibitions, technical forums, industry associations and other ways to improve their industry visibility. With the continuous accumulation of the company's reputation in the industry, there are also potential customers who take the initiative to communicate with the company and cooperate with the company. Once the company confirms the cooperation intention with the potential customer, the company's sales staff cooperates with the dealer to conduct business negotiations and quotations with the potential customer, and enters the sales process after reaching an agreement.

6. Management mode

Since its establishment, the company has accumulated rich experience in product development and marketing, and after years of exploration and integration, it has gradually established a management concept and management system in line with its own development.

(1) Matrix management

According to the professional division of labor, the company has set up R&D, operation, finance, human resources and other departments; Different R&D project teams have been set up according to the main R&D directions. In the process of specific product project development and customer service, the company mobilizes personnel from different departments to form a project team as needed, and a management matrix is formed between professional departments and projects.

Matrix management not only maintains the professionalism of product development and technical support, but also clarifies the overall goal of the project and the division of labor and cooperation mechanism to ensure the efficient completion of tasks.

(2) Complete quality management system

The company's quality control work runs through the entire process of product development, operation and sales. The quality control department assists other departments in formulating their operating specifications, recording and sorting out daily work documents, and supervising and guiding the work and quality control of various departments. At present, the company has established a quality management system with the quality control department as the core, and has passed the ISO9001:2015 certification, which has effectively improved the overall quality of the company's products and services.

2.3 The situation of the industry

(1). The development stage, basic characteristics and main technical thresholds of the industry

The company's main business is the R&D, design and sales of wireless communication chips, as well as providing chip customization services and semiconductor IP licensing

Serve. According to the Guidelines for the Industry Classification of Listed Companies (revised in 2012) issued by the China Securities Regulatory Commission, the company is in the manufacturing of computer, communication and other electronic equipment (C39) and information transmission, software and information technology services (I65). According to the "Industrial Classification of the National Economy (GB/T4754-2017)", the industry in which the company is located belongs to the "integrated circuit design" (code: 6520) in the software and information technology service industry. According to the "Guiding Catalogue for Industrial Structure Adjustment (2019 Edition)" issued by the National Development and Reform Commission, the integrated circuit design industry in which the company is located belongs to the encouraged industry.

(1) The development stage and basic characteristics of the industry

In recent years, the state has issued relevant plans to support consumer electronics, Internet of Things, artificial intelligence and other applications, and China's integrated circuit design industry still shows strong growth potential despite external challenges and industry adjustments. According to the China Semiconductor Industry Association,

In 2024, the sales revenue of China's integrated circuit design industry is expected to be 646.04 billion yuan, an increase of 11.9% over 2023, accounting for global integration

The proportion of the circuit products market was basically the same as that of the previous year. From the perspective of industrial structure, the sales volume of China's integrated circuit design industry accounts for China's set

The proportion of the circuit industry has increased steadily, from 34.7% in 2014 to 44.6% in 2023. Sales from chip design companies

In terms of scale, 731 companies are expected to have sales of more than 100 million yuan in 2024, an increase from 625 in 2023

106, up 17% year-over-year. On the whole, the structure of China's integrated circuit industry chain has gradually expanded upstream, the structure has become more optimized, and the industry has gradually entered a higher quality development stage.

The chip design industry is a typical technology and intelligence-intensive industry, the industry has a high technical threshold, and the overall technical level of the industry is characterized by high complexity, strong professionalism, fast iteration speed, and close integration with market demand.

1 High level of complexity

Current VLSI chips have tens of billions of transistors and can execute billions of instructions per second, and any error may affect the correctness of the program. Secondly, as the chip use scenarios extend to industrial control, cloud computing, smart cars, 5G and other fields, the security and reliability of chips have become more important than ever, putting forward higher and more stringent requirements for chip design, and all aspects of the entire chip design process, including system architecture, signal processing, communication protocol stack, and digital, analog and RF circuit design, etc., require deep technical accumulation and excellent teamwork to complete.

2. Strong professionalism

Combined with the technical paths, application scenarios and other elements of various downstream products, the chip design industry is divided into many subdivisions. Taking the cellular baseband chip as an example, it has extremely high requirements for specification formulation, logic design, layout planning, performance design, circuit simulation, layout and wiring, layout verification, etc., and is highly professional. With the development of the chip design industry, chip products in various subdivisions have higher and higher requirements for talents, and a professional team that has been researching in this field for a long time is needed to continuously iterate and upgrade products.

3. Cooperate closely with downstream application fields and iterate quickly

The product demand and development evolution in downstream application fields have brought continuous challenges to upstream chip design enterprises. Chip design enterprises, especially platform design enterprises, not only need to complete the design and development of the chip itself, but also need to support the various terminal application needs of downstream customers and provide complete solutions for their project mass production. Therefore, excellent chip design companies must take the initiative to predict the development trend of the end market

and the development needs of customers, and constantly improve the applicability and competitiveness of products in the downstream market. Especially in the field of consumer electronics and smart Internet of Things devices, its terminal products are updated quickly, prompting upstream chip design companies to quickly achieve technology iteration.

(2) Main technical thresholds

The high degree of system complexity and professionalism of wireless communication technology and integrated circuit products determines that the industry has a high technical threshold. Among them, the company's cellular baseband design technology is one of the most difficult technologies in the world to master, to successfully develop a market-recognized cellular baseband chip, not only requires billions of capital investment, years of communication technology and standard accumulation, with multi-network chip design technology, 5G chip design technology, ultra-large-scale digital-analog mixed integrated circuit design technology and other core technologies, but also to ensure the robustness and compatibility of more than 10 million tons of code in the design. To overcome the design complexity caused by the full compatibility of dozens of frequency bands, to successfully pass the testing and certification of hundreds of operators around the world, and at the same time, it is necessary to meet the extreme requirements of mobile terminals for power consumption, area, and integration, etc., with a very high technical threshold. New entrants in the industry will not be able to break through the above technical barriers in the short term.

The company has comprehensive wireless communication research and development capabilities, and has a full range of product layout. In terms of cellular mobile communication technology, it can support GSM/GPRS/EDGE (2G), CDMA/WCDMA/TD-SCDMA (3G), FDD-LTE/TDD-LTE (4G)

As well as 5G SA/NSA and other network standards, we have developed 5G multi-mode wireless communication cores that support 2G/3G/4G/5G multiple modes

Slice. In terms of non-cellular mobile communication technology, the company has successively developed a variety of non-cellular IoT chips based on different communication protocols such as WiFi, LoRa, Bluetooth and global navigation and positioning, forming a rich product layout in this field.

In years of R&D and design work, the company and its core technical team have formed a unique deep understanding of basic technologies such as system architecture, algorithms, circuits, firmware and software design, and have accumulated rich practical application experience. On this basis, the company has mastered core design technologies such as ultra-large-scale digital-analog mixed integrated circuits, RF chips, baseband RF integrated technology and ultra-low-power SoC chip design, making the company's chip products and application solutions at the leading level in the field of 4G Internet of Things in terms of process, performance, power consumption, compatibility and stability.

(2). Analysis of the company's position in the industry and its changes

At present, the company has shipped a large number of chip products mainly in the field of cellular Internet of Things, relying on high-quality, cost-effective, high-integration, and rapid iteration of multi-generation chip products, which not only successfully broke through the market monopoly of mature enterprises in the same industry, rapidly increased the sales scale, but also further consolidated the customer base and established the company's brand position.

In the field of cellular Internet of Things market, due to the complexity of the communication system, most customers can not independently solve all kinds of problems encountered in the process of terminal design, and need baseband chip manufacturers to provide technical support and solutions.

It is an important supplier of mainstream module manufacturers at home and abroad, such as Neoway, Gosuncn, Telit, etc., and has entered the supply chain system of well-known domestic and foreign brand enterprises such as large national power grid enterprises, ZTE, Hitachi, 360, TP-Link, etc. In 2024, the company will succeed in the domestic market

Continue to maintain a high market share, according to TSR 2024 global cellular IoT statistics, it has achieved nearly 50% in the Cat.1 bis field

The market share of the industry has been continuously consolidated.

The company has become one of the very few chip companies covering multi-standard cellular and multi-protocol non-cellular. In the future, the company will continue to iterate and in-depth layout of products, and strive to quickly develop the market with richer product lines, better performance and more three-dimensional business layout.

(3) The development and future development trend of new technologies, new industries, new forms of business and new models during the reporting period

(1) The development of new technologies

(1) 5G NR drives industrial upgrading

5G NR is a wireless access technology developed by 3GPP and applied to 5G mobile networks, and is also the global air interface of 5G networks

Standard. Compared with previous generation technologies such as 4G LTE, 5G NR achieves innovative breakthroughs in multiple dimensions and is committed to bringing higher speeds to users

Frequency, lower latency, and higher reliability of the communication experience. In terms of spectrum application, it covers a wide range from low-frequency bands to millimeter waves, and can intelligently match frequency bands according to different scenarios, low-frequency ensures large-area signal coverage, and high-frequency ultra-high-speed data transmission provides strong power for high-definition video streaming, VR/AR and other applications. In terms of communication delay control, 5G NR significantly reduces end-to-end communication latency through a new frame structure design and in-depth optimization of control channels, strongly supporting application scenarios with high real-time requirements, such as autonomous driving and telemedicine.

At present, 5G NR has gradually moved from the early stage of network construction to the in-depth application of the industry, covering intelligent manufacturing, Internet of Vehicles, and medical care

Health, smart city and other fields, accelerate the digital and intelligent transformation of various industries.

According to relevant data from the Ministry of Industry and Information Technology, by the end of 2024, the total number of 5G base stations in China will reach 4.251 million, a net increase of 87.4 from the end of the previous year

10,000 to complete the "14th Five-Year Plan" development goals ahead of schedule. In China, the 5G technology industry has built a complete industrial chain including communication chips, terminals, base station equipment, and facility instruments. On the B side, scenarios such as smart manufacturing, smart ports, telemedicine, and remote education fully demonstrate the great value of 5G. According to data from the China Academy of Information and Communications Technology and other institutions, in the past five years of 5G commercialization, the total economic output has been directly driven by about 5.6 trillion yuan and indirectly driven by about 14 trillion yuan.

In terms of policy, the Ministry of Industry and Information Technology, together with the Cyberspace Administration of China, the National Development and Reform Commission, the Ministry of Education, the Ministry of Ecology and Environment, the Ministry of Transport, the Ministry of Agriculture and Rural Affairs, the Ministry of Culture and Tourism, the National Health Commission, the State-owned Assets Supervision and Administration Commission of the State Council, the State Administration of Radio, Film and Television, and the State General Administration of Sports, jointly issued the "5G Large-scale Application "Sailing" Action Upgrade Plan (hereinafter referred to as the "Sailing Upgrade Plan").

The "Sail Upgrade Plan" clarifies the development goals of 5G applications. By the end of 2027, there will be 38 5G base stations per 10,000 people.

The penetration rate of 5G individual users exceeds 85%, the proportion of 5G network access traffic exceeds 75%, and the number of 5G IoT terminal connections exceeds 100 million

It has become a development pattern of "universal capability, universal application, and empowerment and inclusiveness", and fully realized the large-scale application of 5G.

In terms of industrial upgrading, the "Sail Upgrade Plan" proposes to improve the supply capacity of five key industrial links such as core industries, integrated technologies, application industries, standard systems, and application security, promote the research and development of key technologies of 5G-A and 5G millimeter wave and the maturity of the industrial chain, promote the deep integration of 5G and AI, Beidou, edge computing, cloud computing, big data and industry technologies, and improve the low-cost and high-quality supply capacity of key links such as chips/modules, converged terminals/equipment, industry virtual private networks, and solutions.

(2) The commercial process of 5G RedCap is accelerating

RedCap (Reduced Capability) is a 5G technology that aims to reduce the cost of 5G terminals through lightweight design of terminals.

It also provides high-speed and large-scale connection capabilities, filling the gap of 5G technology in medium- and high-speed IoT applications. RedCap is a 5G technology defined by the 3GPP standardization organization, which belongs to the new technology standard NR light (NR lite). It reduces equipment capacity by reducing bandwidth, the number of transmitting and receiving antennas, reducing the rate, adjusting the modulation mode, introducing half-duplex mode, etc., thereby reducing the complexity, cost and power consumption of terminal equipment, prolonging the service life, and is more conducive to large-scale commercial popularization and application in 5G commercial networks.

5G RedCap is an important evolution direction for 5G for medium-speed and large-scale IoT scenarios, which has generational advantages over 4G IoT technology

It has a cost advantage over standard 5G. Starting in 2025, the 5G RedCap industry is expected to enter the stage of large-scale application.

In a new report, Counterpoint Research predicts that 5G RedCap modules will account for total cellular IoT modules by 2030

18% of shipments. In the IoT market, smart grids, Internet of Vehicles, and video surveillance are all important RedCap application scenarios. vanish

The fee-level 5G RedCap smart wearable market is brewing, and the scale of future shipments is considerable. In April 2024, the Ministry of Industry and Information Technology (MIIT) released the "Guan

In the notice of launching the 2024 5G Lightweight (RedCap) Breakthrough Action", it is specifically proposed to "strive to break through 5G RedCap in intelligence."

The R&D and innovation of consumer electronics such as watches and on-board terminal equipment will gradually achieve new breakthroughs in 5G RedCap terminals." With the support of national policies, the upstream and downstream of the industrial chain, including operators, chip manufacturers, module manufacturers, equipment manufacturers, and terminal manufacturers, are active

Follow-up, laying a solid foundation for the large-scale application of 5G RedCap: By the end of the third quarter of 2024, China Mobile has opened the whole country

The largest 5G RedCap commercial network, with a total scale of more than 430,000 5G base stations supporting RedCap, has been implemented in all counties in China

N28 RedCap is continuously covered in the above areas, and N41/N79 RedCap is enabled as needed. China Unicom and China Telecom are in 17

The province has achieved continuous 5G RedCap coverage, and more than 120,000 5G base stations supporting RedCap have been opened. Qualcomm, MediaTek, etc

With the continued launch of the 5G RedCap chip platform, system manufacturers such as Huawei and ZTE have cooperated with chip companies to extensively test the functions of RedCap terminals, interoperability, field performance, and ZUC algorithms.

In the field of 5G, Arcjet has always kept up with the evolution and innovation of technical standards. Especially in the field of RedCap, the company is taking the lead

Invested in the basic research and development of 5G RedCap chip technology, and successfully achieved commercial mass production. At present, the company has launched the RedCap chip platform for the two major application scenarios of smart Internet of Things and smart wearables, further helping the large-scale commercial use of 5G lightweight technology.

(3) 6G technology is beginning to take shape

As the evolution and upgrade of 5G, 6G has been preliminarily established as a key technology, and it is expected that 2025-2030 will be the standard formulation stage.

After 2030, it will gradually enter the commercial stage. Compared with 5G, 6G mainly adds a variety of application scenarios such as ubiquitous connectivity, synaesthesia integration, and AI deep empowerment.

Ubiquitous connection: It aims to solve the communication problem of areas with no coverage or signal blind spots in traditional terrestrial networks, and realizes seamless coverage of all domains, all times and all dimensions through the integrated network of space, ground and sea, and is expected to be widely used in satellite Internet of Things and terminal direct connection to satellites, emergency communications, industrial Internet, smart cities and other fields in the future.

Synaesthesia integration: It aims to build an intelligent network system with data transmission, environmental monitoring, precise positioning and other capabilities through the deep integration of communication and perception functions, as well as multi-node collaboration such as multi-modal, multi-band, base station and terminal, so as to provide support for the development of low-altitude economy, smart home, unmanned driving, emergency rescue, industrial Internet and other fields.

In-depth AI empowerment: AI is introduced to adjust resource allocation in advance, optimize spectrum allocation and computing power, and achieve real-time dynamic balance of communication, sensing, and computing tasks, reducing network energy consumption.

In terms of policy, the Ministry of Industry and Information Technology has made it clear that it will increase investment in 6G technology innovation in 2025, as stated in the 2025 Government Work Report

It is indeed proposed to "establish a future industrial investment growth mechanism, and cultivate future industries such as biomanufacturing, quantum technology, embodied intelligence, and 6G", and the clear support of the policy will lay the foundation for the subsequent 6G commercialization.

(4) WiFi 7 technology

Wi-Fi 7, also known as IEEE 802.11be, is a next-generation wireless local area network (WLAN) technology that follows Wi-Fi 6 (802.11ax)

Afterwards. Its core goal is to achieve higher data transfer speeds, lower latency, greater capacity, and congestion in wireless networks

can still maintain a stable connection. Wi-Fi 7 is expected to have a theoretical maximum transfer rate of 30 Gbps, which is three times faster than Wi-Fi 6

Fold.

Wi-Fi 7 delivers significant speed improvements over previous generations of Wi-Fi technology. Its theoretical maximum speed is up to 30Gbps, far away

6Gbps for Ultra Wi-Fi 6 and 5Gbps for Wi-Fi 5. This speed advantage will greatly improve users in high-bandwidth application scenarios

Experiences such as video streaming, large file transfers, and more.

In addition, Wi-Fi 7 further expands the bandwidth. Wi-Fi 6 introduces 160MHz bandwidth, while Wi-Fi 7 increases to 320MHz.

This allows Wi-Fi 7 to transfer more data in the same amount of time, especially in multi-user environments.

With the development of WLAN technology, WiFi has become indispensable for homes, businesses, and public places as the main means of accessing the network

Missing part. In recent years, with the development of 5G and other technologies, VR/AR, 8K video, cloud computing, remote office and other new technologies

technologies and applications require higher throughput and latency, and Wi-Fi 7 came into being. WiFi 5 compared to WiFi 6 and WiFi 6/7E

INTRODUCING GREATER WIRELESS BANDWIDTH (320MHZ), HIGHER-ORDER MODULATION (4K-QAM), MORE FLEXIBLE SPECTRUM UTILIZATION (MULTI-RU), AND MORE

New technologies such as high spatiotemporal multiplexing (16*16MIMO), more link operations (MLO), and multi-AP collaboration enable Wi-Fi 7 to:

Provides higher data rates and lower latency. WiFi7's multi-link operation, multi-AP collaborative scheduling, time-sensitive networking, and enhanced retransmission mechanism make it more efficient and flexible.

(5) Satellite communication technology

Satellite communication technology is an emerging connection method in the field of the Internet of Things, which has ushered in rapid development in recent years driven by policies, standards and industry coordination. In the early days, satellite communications were limited by private protocols, high hardware costs, and closed ecosystems, and the scale growth was slow. With

3GPP introduced the concept of Non-Terrestrial Network (NTN) in the 5G R17 standard, and satellite communications were officially integrated

Entering the 5G ecosystem, the standardized 3GPP NTN can meet the open and compatible needs of the satellite communication field, and open up the air, space and ground one

A new chapter in the integrated network. NTN communicates directly with mobile phones or IoT devices through low-orbit satellites, compared to terrestrial cellular communications

Wider coverage and higher reliability with low latency and high flexibility. NTN technologies are divided into narrowband IoT NTN and wideband NR

NTN focuses on low-power and wide-coverage scenarios (such as asset tracking, etc.), while the latter supports high-speed communication (such as direct connection of mobile phones to satellites, etc.), and realizes seamless collaboration between satellites and terrestrial cellular networks through standardized protocols, significantly improving coverage breadth and connection reliability.

Satellite communication technology has a wide range of application scenarios. According to Countpoint's forecast, the number of satellite IoT connections worldwide is expected from 2020

of 3.6 million grew to 41 million by 2030, growing at a CAGR of 28%. In the field of connected cars, in-vehicle satellite communications

The equipment enables the vehicle to maintain contact with the outside world in areas without ground network coverage, and realizes functions such as remote monitoring and safety early warning. In terms of asset tracking, the tracker equipped with a satellite communication module can locate and monitor the status of goods in real time to ensure the safety and efficiency of logistics and transportation. In precision agriculture, satellite communication helps farmers remotely monitor the farmland environment, achieve precise irrigation and fertilization, and improve agricultural production efficiency. In addition, satellite communication technology also plays an irreplaceable role in the fields of public safety, disaster early warning, and marine monitoring.

(2) The development trend of new industries and new businesses

(1) Internet of Vehicles market

According to the latest report published by Counterpoint Research, global connected car shipments will exceed 500 million from 2024 to 2030

Vehicle. According to the report, two out of every three cars sold are now equipped with embedded connectivity. Between 2024 and 2030, cumulative sales of 5G embedded cars will account for nearly half of all connected car sales.

Under the general trend of intelligence and networking in the automotive industry, the global penetration rate of the Internet of Vehicles continues to rise, and the market scale of the industry is growing rapidly. According to the latest research by Counterpoint's "Global Automotive NAD Modules and Chips Forecast", the global automotive connectivity module and chip market

It is expected to grow at a compound annual growth rate (CAGR) of 13% between 2020 and 2030

shipments will exceed 700 million units within this decade.

Currently, 4G Cat 4 access technology dominates the NAD module market and can meet OEM telematics applications

However, as the demand for next-generation SDVs grows, 5G will become the first option for L3+ ADAS/ADS (Advanced Driver Assistance

5G RedCap (5G Lightweighting) will replace 4G Cat 4 and will be used primarily for L2 ADAS and beyond

Under the connected vehicle, the focus is on OEM telematics and lightweight streaming infotainment.

In terms of Internet of Vehicles, with the development of intelligent networked vehicles, RedCap technology can provide more network service functions for cars.

For example, demand scenarios such as in-vehicle intelligent driving and real-time information services. In addition, in terms of smart wearable devices, video surveillance, etc., RedCap is also able to leverage its technical advantages to continuously expand its application scope as the application scenario requirements are further refined. For example, in the field of wearable devices, it has a broad ToC market, and in the future, as the functions continue to increase and the demand for the network will also increase, RedCap will have more room to develop with its power consumption and cost advantages, and can support cost-effective, small-size, and low-power wearable devices with high or medium speeds.

(2) Smart wearable market

With the recovery of the consumer electronics industry, the wearable device market will usher in rapid development in 2024. International Data Corporation (IDC).

According to the cloth report, in the first three quarters of 2024, China's wrist wearable device shipments reached 45.76 million units, a year-on-year increase of 20.1%.

Among them, smart watch shipments reached 32.86 million units, a year-on-year increase of 23.3%; Smart bracelet shipments reached 12.91 million units, the same as the same

This represents an increase of 12.6%.

Smartwatches are likely to continue to lead the growth of the wearables market in 2025. With the help of AI, health monitoring, and connectivity

Leading brands such as Apple, Samsung, and Garmin continue to push the boundaries of wrist wearable technology. The integration of generative AI technology has brought advanced features such as health scores, personalized recommendations, and conversational virtual assistants to wearable devices, transforming them from mere data tracking tools to comprehensive health and fitness coaching, greatly improving the user experience. At the same time, upgrades to health and fitness sensors, such as ECG, blood pressure, blood glucose monitoring, and more, are revolutionizing the health tracking capabilities of wearables. These features span different price ranges, making wearables an indispensable tool for health-conscious consumers.

Emerging devices such as smart glasses and smart rings will also gain traction in 2025. With a lightweight design and an innovative healthy chase

traceability, which may reshape consumer expectations for wearable technology. There are many types of wearable devices, from common smart wearable devices such as bracelets and watches to various non-mainstream product forms such as smart clothing, school bags, shoes and socks. Most smart wearable devices rely on mobile terminals for data reception and analysis, with high performance and low power consumption. At present, smart wearables are not the same as the end

Most of the communication is based on short-range wireless communication technologies such as WLAN, Bluetooth, and RFID, and will be further connected through wide-area cellular communication technologies such as 4G/5G in the future. With the increasing requirements for end-user experience, especially in the high-quality implementation of mobile apps, intelligent analysis big data cloud platforms, calls and other functions, the dependence on cellular mobile communication chips is also increasing.

(3) Smartphone market

Research firm International Data Corporation (IDC) has released its quarterly global cell phone tracking report. The data shows that in the fourth quarter of 2024

Global smartphone shipments grew 2.4% year-over-year to 332 million units, marking the sixth consecutive quarter of growth. At the same time, the number of IDCs

According to the show, smartphone sales in China will increase by 5.6% year-on-year to 286 million units in 2024. The Chinese government has incorporated smartphones and other electronics

The inclusion of the product in the scope of the national consumption subsidy is aimed at stimulating domestic demand, which is expected to drive the growth of domestic mobile phone sales in 2025.

Generative Artificial Intelligence (GenAI) refers to the generation of machine learning algorithms

AI systems for new data, content, or models. According to a new survey released by market research firm Counterpoint Research, generative AI (Gen AI) is changing the landscape of the smartphone market at an unprecedented rate. Mobile phones in the form of edge AI will become the mainstream of the industry in the future, and the perception and computing capabilities of mobile phones will be significantly upgraded, driving mobile phone hardware innovation. According to CounterpointResearch, an AI phone can be defined as a mobile device that leverages large, pre-trained generative AI models to create original content or perform context-aware tasks. In order to achieve the above functions, the mobile phone hardware will be greatly upgraded, including the chip core dedicated to neural network computing, large-capacity and high-bandwidth memory, and the supporting power consumption and communication will also be improved to a certain extent.

Canalys expects generative AI phones to account for 16% of global smartphone shipments in 2024 and is expected to be global by 2026

The cumulative shipment of AI mobile phones will exceed one billion units. With the successive launch of the second-generation AI flagship phones of Android manufacturers and the iteration of model algorithms, the operation effect of small models on the device side has made great progress, and building an open AI service ecosystem has become the focus of many Android manufacturers' AI strategies in the next stage. The entry of industry leaders will also persuade and attract more developers to develop more AI applications and services for mobile.

(4) High-speed gateway routing market

In the future, with the continuous development of Internet technology and the increasing abundance of network applications, the router market still has a broad space for development. For example, with the rapid development and application of technologies such as the Internet of Things, cloud computing, and 5G, the router market will be further expanded. Due to the large scale of the domestic router market, and most of the market is currently occupied by foreign brands, the development potential of domestic router brands is also great. In addition, with the increasing prominence of network security issues, network security routers will also become one of the important directions of future development.

The rapid development of emerging markets such as smart home and the Internet of Things has brought new growth points to the router industry. With the popularization of smart devices and the convergence of IoT technologies, the market demand for routers, as the core components that connect various devices, will continue to grow. With the increasing influence of Chinese enterprises in the global market and the implementation of internationalization strategies, Chinese router manufacturers will actively expand overseas markets to achieve global development. This will bring greater market space and development opportunities for the router industry.

(5) Industrial control market

Industrial control systems (ICS, referred to as industrial control systems) are composed of various automation control components

and the process control components that collect and monitor real-time data, and are used to ensure the automatic operation, process control and monitoring of industrial infrastructure. It is composed of controllers, sensors, transmitters, actuators and input/output interfaces, and the core components of industrial control systems include data acquisition and monitoring systems, distributed control systems, programmable controllers, remote terminals, human-computer interaction interface devices, etc. Industrial control system information security (referred to as "industrial control security") refers to the protection of information resources in industrial control systems or information networks from various types of threats, interference and destruction, that is, to ensure the security of information. At present, industrial control systems have been widely used in nuclear facilities, steel, nonferrous metals, chemicals, petroleum and petrochemical, electric power, natural gas, advanced manufacturing and other industries.

(6) Locator market

The widespread use of IoT technology has driven the interconnection of various smart devices, which often need to obtain real-time location through locators. The locator can be widely used in many fields such as vehicle positioning and anti-theft, auto finance risk control management, enterprise fleet management, urban traffic management, asset management and so on. Users can regularly monitor the location information of vehicles or items through the cloud platform and mobile APP, and support timing tracking, Bluetooth function, power failure alarm, vibration alarm, fence alarm, remote oil and power cut, remote upgrade and other functions.

With the development of autonomous driving technology and the Internet of Vehicles, the demand for devices such as in-vehicle locators and V2X (Telematics Communication) systems is exacerbating

Increase. Autonomous vehicles, driverless delivery vehicles, and shared mobility services (such as bike-sharing, car-sharing) all have extremely high requirements for precise positioning and real-time navigation, which is also driving the rapid growth of the in-vehicle locator market.

The construction of smart cities involves many fields such as traffic management, public safety, and environmental monitoring, and locator technology plays a vital role in it. For example, intelligent transportation systems in cities use location technology to monitor traffic conditions in real time, optimize traffic signals, and reduce traffic accidents. In the field of public safety, locators can be used for personnel tracking, disaster rescue, emergency response, etc. With the advancement of smart city construction, the growth of locator demand will continue to accelerate.

Overall, the demand for locators is experiencing rapid growth, driven by developments in the Internet of Things, smart transportation, logistics, smart cities, and more. Positioner technology is developing in the direction of high precision, low power consumption, miniaturization and intelligence, and will have a profound impact on many industries in the future. With the continuous development of 5G and other emerging technologies, the locator market will usher in a broader application prospect.

3. The company's main accounting data and financial indicators

3.1 Key accounting data and financial indicators for the past 3 years

Unit: Yuan Currency: RMB

2024 2023 This year is compared to 2022

Increase/decrease (%)

Total assets 6,536,868,670.00 7,298,551,612.16 -10.44 8,323,015,546.68

Shares attributable to listed companies 5,681,778,486.35 6,355,553,914.75 -10.60 7,472,188,140.47

East's net worth

Operating income 3,385,742,818.95 2,599,916,149.57 30.23 2,140,199,744.64

Deduction and main business none

Closed business income and not 3,385,537,160.87 2,599,334,735.79 30.25 2,140,005,461.62

Receipts with commercial substance

Operating income after entry

Shares attributable to listed companies -693,013,679.18 -505,821,343.77 Not applicable -251,506,085.78

East's net profit

Attributable to shares of listed companies

Non-recurring deduction -706,619,289.08 -658,040,624.06 N/A -373,209,383.55

Net profit from profit or loss

-403,598,869.75 -677,577,950.55 -353,912,534.55 -353,912,534.55

Net gold flow

The weighted average net assets closed at -11.56 -7.27, down 4.29 percentage points or -3.58

Profit rate (%)

Basic earnings per share (RMB: -1.70 -1.22, N/A: -0.61.)

/share)

Diluted earnings per share (RMB -1.70 -1.22 N/A -0.61

/share)

R&D investment accounted for 36.68 42.92 percentage points of operating revenue, down 6.24 percentage points 46.99

Proportion of income (%)

3.2 Key accounting data by quarter in the reporting period

Unit: Yuan Currency: RMB

Q1 Q2 Q3 Q4

(January-March) (April-June) (July-September) (October-December)

Operating income 830,133,907.19 825,050,699.90 884,453,693.08 846,104,518.78

-125,285,669.54 -139,419,525.58 -147,762,537.23 -280,545,946.83 attributable to shareholders of listed companies

Net profit

attributable to shareholders of listed companies

-157,744,561.85 -142,703,145.21 -175,185,264.34 -230,986,317.68 after deducting non-recurring gains and losses

Net profit

Cash flow from operating activities -228,518,251.87 -165,513,061.58 27,990,557.85 -37,558,114.15

Net amount

Explanation of the discrepancies between the quarterly data and the data disclosed in the periodic report

□ Applicable √ Not applicable

4. Shareholders

4.1 The total number of common shareholders, the total number of preferred shareholders whose voting rights have been restored, and the total number of shareholders holding special voting shares and the top 10

shareholders

Unit: Shares

The total number of ordinary shareholders (households) at the end of the reporting period was 17,973

The total number of ordinary shareholders at the end of the previous month prior to the disclosure date of the annual report was 19,780

The total number of preferred shareholders whose voting rights have been restored as of the end of the reporting period (households) is not applicable

The total number of preferred shareholders whose voting rights were restored at the end of the previous month prior to the disclosure date of the annual report is not applicable

The total number of shareholders holding special voting shares as of the end of the reporting period (households) Not applicable

The total number of shareholders holding special voting shares at the end of the month prior to the disclosure date of the annual report is not applicable

Shareholdings of the top 10 shareholders (excluding shares lent through refinancing)

impawn

tag or

Freeze the love

Name of Shareholder Increase in Number of Shares Held at the End of the Reporting Period Proportion Holding Limited Shareholders

(Full name) Reduction (%) Number of Conditional Shares Nature of Shares

Number of copies

Quantity

state

domestic

Alibaba (China) Network Technology 0 64,557,440 15.43 64,557,440 N/A 0 African State

There is a law

person

Ningbo Jiexinrui Micro Enterprise Management 0 38,013,676 9.09 38,013,676 None 0 Others

Partnership (Limited Partnership)

Overseas

Dai Baojia 0 35,242,880 8.43 35,242,880 None 0 Natural

person

Shanghai Pudong Nova Startup 0 22,152,640 5.30 0 None 0 State-owned

Investment limited company legal person

Shenzhen Qianhai Wanrong Laterite Investment -45,407 19,848,266 4.74 0 None 0 Others

Fund (Limited Partnership)

China Merchants Bank Co., Ltd.-

ChinaAMC SSE STAR Market 50 Component -3,501,681 13,792,852 3.30 0 N/A 0 Others

Easy-to-type open-ended index securities investment

funds

GreatASR1 Limited 0 11,746,884 2.81 11,746,884 None 0 Overseas

juridical person

Shanghai Pudong Emerging Industry Investment 0 9,076,160 2.17 0 None 0 State-owned

Limited to corporate legal persons

Industrial and Commercial Bank of China Co., Ltd

SI E FUND SSE STAR BOARD 50 3,017,464 8,754,299 2.09 0 None 0 Others

Constituent ETF certificates

Bond investment funds

Shanghai Wuyuefeng Integrated Circuit Equity 0 7,498,240 1.79 7,498,240 None 0 Others

Investment Partnership (Limited Partnership)

Description of the above-mentioned shareholder affiliation or concerted action 1. Dai Baojia and Ningbo Jiexinrui Micro Enterprise Management Cooperation

Partnership (Limited Partnership), Great ASR1 Limited

be a person acting in concert; 2. Shanghai Pudong New Star News

Da Venture Capital Co., Ltd. is a new company in Pudong, Shanghai

A wholly-owned subsidiary of Industrial Investment Co., Ltd., for:

persons acting in concert; 3. In addition, the company did not answer

to other shareholders who have an associated relationship or a consistent line

The statement of the moving agreement, it is unknown between the other shareholders that is

Whether there is an affiliation, relationship, or concerted action agreement.

Explanation of preferred shareholders whose voting rights have been restored and the number of shares held is not applicable

Holders of depositary receipts

□ Applicable √ Not applicable

The top 10 shareholders in terms of the number of voting rights as of the end of the reporting period

□ Applicable √ Not applicable

4.2 Block diagram of the property rights and control relationship between the company and the controlling shareholder

□ Applicable √ Not applicable

4.3 Block diagram of the property rights and control relationship between the company and the actual controller

√ Applicable □ Not applicable

4.4 The total number of preferred shareholders and the top 10 shareholders of the company at the end of the reporting period

□ Applicable √ Not applicable

5. Corporate bonds

□ Applicable √ Not applicable

Section 3: Important Matters

1. The company shall, in accordance with the principle of materiality, disclose the major changes in the company's operation during the reporting period, as well as the events that have a significant impact on the company's operation during the reporting period and are expected to have a significant impact in the future.

During the reporting period, the company achieved operating income of 3.386 billion yuan, an increase of 30.23% over the same period last year; attributable to the owner of the parent company

Net profit was -693 million yuan, an increase of 187 million yuan from the loss in the same period last year. For the analysis of the specific business situation, please refer to the relevant content of the annual report. 2. If there is a delisting risk warning or termination of listing after the disclosure of the company's annual report, the reasons for the delisting risk warning or termination of listing shall be disclosed.

□ Applicable √ Not applicable