Investor Relations Activity | Chuling Shares Hosts Online Research Session for Institutional Investors Including Wanjiia Fund and Huafu Fund

IR Event | Chuling Shares

Hosted online research sessions for institutions including Home Fund and Huafu Fund.

On 2022/11/2, Mr. Xu Ping, Secretary to the Board and Deputy General Manager of Chuling Shares, Ms. Zhu Shuangshuang, Corporate Secretary, and Mr. Tang Peng, Head of Hangzhou Miaolian IoT Technology Co., Ltd., a portfolio company, hosted an online research session with analysts from Wanjia Fund, Huafu Securities, and Hufu Fund.

During the interactive exchange, the research institution gained insights into Chulink Shares' strategic layout in Xinchuang and F5G-related businesses, as well as Hangzhou Miaolian's smart home business.

#01#

1, what is the current status of the partnership between Hualing Shares' investee, Hangzhou Miaolian, and Huawei Smart Home?

Answer: Miaolian is currently a Huawei Cloud Elite Service Provider. Its IoT module middleware and the Miaolian Smart Home Management System are official partners in Huawei Cloud's co-branded ecosystem program. Additionally, Miaolian is a partner of the Huawei Terminal (HarmonyOS) Developer Alliance and one of the key organizations involved in defining the device model standards for Huawei Smart Home. While Huawei focuses on building platforms and setting standards, Miaolian empowers more device manufacturers and individual products to connect quickly and cost-effectively to Huawei Cloud's smart ecosystem.

#02#

2 What are the specific business models of Hangzhou Miaolian and Huawei?

Answer: First, to achieve smart connectivity across the entire home, Miaolian uses IoT middleware to integrate customers into the Huawei ecosystem. Second, we develop application-specific scenarios tailored to different product features—such as elderly care, hospitality, and after-sales service. For example, while most modern smart lamps support remote control, our solution can automatically turn on when a child sits down to do homework, enabling true intelligence for lighting. Similarly, for residential building entry doors, we help equipment manufacturers create intelligent maintenance and operations scenarios.

#03#

What is the proportion of Huawei IoT middleware and application scenarios in Miaolian's Hangzhou business, what is the charging model, and what are the gross margins?

Answer: Huawei accounts for 20-30% of Miaolian's business volume. Miaolian's core business primarily stems from middleware, but its client base extends beyond Huawei to include partners such as JD.com, Alibaba, and Gree. The joint venture with Huawei commenced in 5 and 6 this year, and the growth rate of Huawei ecosystem-related business is expected to be strong in the future.

Pricing Models: 1) Revenue sharing for joint operation of intelligent scenario software; 2) One-time hardware sales of IoT module middleware. Gross margins are approximately 20%+ for middleware, while software gross margins are higher.

#04#

4: Who are Hangzhou Miaolian's competitors? How much benefit can Miaolian derive from the growth of Huawei's smart home business?

Answer: There were many competitors starting in 2014, but as the industry has evolved, few companies like Miaolian remain that offer both middleware and real-world application scenarios alongside IoT SaaS solutions. To succeed in this space, you need deep familiarity with IOT ecosystem platforms like Huawei's and years of accumulated expertise in AIOT. With Huawei's HarmonyOS smart home solution rolling out comprehensively, Miaolian sees significant opportunities ahead.

#05#

5 How has Borui's government order growth trended? Has it benefited from the broader Xinchuang (IT innovation) momentum?

Answer: Xinchuang primarily covers IT infrastructure such as CPU chips, servers, and storage; foundational software including databases and operating systems; application software like OA, ERP, office suites, and government applications; and information security solutions such as perimeter and endpoint security products. As Borui holds Class-A Classified Information Security Qualification and Military Procurement Qualification, we are qualified to provide end-to-end Xinchuang integration services and have already secured several such contracts. Our clients include government agencies, military organizations, and armed forces sectors involved in Xinchuang initiatives.

With the new comprehensive policy on domestic substitution, the overall market has expanded, and our industry is poised to benefit. The company is accelerating efforts to clarify its technical strengths and align them with relevant market demands.

#06#

6: Future strategic plans for F5G at Chuling Shares over the coming years.

Answer: Traditional factory network construction and usage face significant challenges. First, traditional factory networks rely heavily on industrial switches, resulting in complex deployments, multi-layered architectures, poor scalability, and difficult management and maintenance. Second, intelligent transformation demands ultra-low latency (below 10 milliseconds). Conventional industrial Ethernet, limited by copper transmission speed and quality, can no longer meet the industry's current requirements for low latency and high throughput.

F5G is the fifth-generation fixed network, featuring deterministic high bandwidth, massive connectivity, low latency, and zero packet loss. It delivers high-quality network connections to servers through extensive coverage.

As current industrial Ethernet speeds no longer meet future demands, deploying F5G offers significant advantages for industrial IoT. This is especially true for industries like automotive manufacturing that have high smart factory requirements, unlocking substantial potential across the sector.

In 6 this year, under the leadership of Dr. Liu Jiming, our company held a technical workshop on F5G product planning. By integrating R&D efforts across our Hangzhou, Suzhou, and Chongqing locations, we are developing competitive products, with a focus on launching FTTR and Industrial PON projects. Additionally, our company has been participating in F5G standardization work since 2020. This year, we are collaborating with operators to establish enterprise standards for F5G access, and next year...