Lingyi Itech (01688) achieved record highs in both revenue and gross profit in the first half of the year, and is repurchasing A+H shares.

On the evening of August 28, Lingyi Itech (01688) released its semi-annual report for the first half of 2026. In the first half of 2026, the company's revenue reached a historic high of 25.149 billion yuan, an increase of 6.45% year-on-year, marking ten consecutive quarters of positive revenue growth; the net profit attributable to the parent company was 764 million yuan, a decrease of 17.88% year-on-year. In the first half of 2026, the company's gross profit amounted to 4.206 billion yuan, up 18.07% year-on-year, also setting a new record; the gross margin was 16.73%, an increase of 1.65 percentage points compared to the same period last year. The announcement indicated that the company's R&D expenses in the first half of 2026 were 1.442 billion yuan, an increase of 27.86% year-on-year. The primary focus was on technological development for new projects in AI terminal businesses, particularly intensifying investments in related projects such as foldable screen hardware, VC cooling hardware, liquid cooling for servers, server power supplies, and Siasun Robot & Automation for embodied intelligence. From the revenue structure, AI hardware-related business revenue accounted for approximately 20.464 billion yuan, representing 81.37% of total revenue. Among these, battery power supply (including end-side and AI computing server power supplies) generated revenue of 3.928 billion yuan, up 12.73% year-on-year; thermal management (end-side and AI computing server cooling) revenue reached 2.920 billion yuan, significantly increasing by 43.46% year-on-year; revenue from automotive and low-altitude economy business was 3.528 billion yuan, up 198.26% year-on-year, with a gross margin increase of about 6.25 percentage points compared to last year. End-side AI Business: Diversified Product Iteration, Foldable Screens and Thermal Management Achieve Scalable Delivery 2026 is regarded by the industry as the "Year of No Creases" for foldable screens. Lingyi Itech has heavily invested in research and development and processing technology for various advanced materials to meet the performance, lightweight, and strength requirements of foldable screen terminals. During the reporting period, the company supplied new generation core precision components related to foldable terminal products to major customers in North America, including hinge precision structural parts, screen support plates, ultra-thin uniform heat distribution plates, and flange ultra-thin stainless steel battery shell modules. In the field of thermal management, the company offers global leading technology customers integrated thermal management solutions, ranging from various materials for uniform heat distribution plates (VC) to AI terminal applications. The stainless steel, composite materials, aerospace-grade titanium materials, and 3D dual-heat source multi-configuration uniform heat distribution plate matrix developed by the company continue to evolve. During the reporting period, uniform heat distribution plates with high thermal performance achieved mass production, and the delivery scale of integrated mid-frame heat distribution plates continued to grow. Among them, the companys representative productthe 3D dual-heat source uniform heat distribution platehas been implemented in flagship models from domestic leading manufacturers to provide heat dissipation for system-level chips and camera modules. In the first half of the year, Lingyi Itech achieved revenue of 1.794 billion yuan in XR wearables, an increase of 17.72% year-on-year. The company covers core hardware products such as soft functional components, injection molded parts, thermal management solutions, and chargers for smart wearable devices, including AR, VR, MR, and AI glasses, and works closely with end brands to become a leading supplier of core hardware and key technologies in smart wearables. Physical AI and AIDC computing power businesses also achieved mass production breakthroughs, with both new tracks entering the stage of bulk delivery. As a second growth curve, AIDC computing power hardware, Lingyi Itech completed the acquisition of Readore Electronics Technology Co., Ltd. in January 2026 to enhance its capabilities in server liquid cooling hardware. Readore focuses on core hardware such as server liquid cooling quick-disconnect connectors (UQD), liquid cooling manifolds, single-phase liquid cooling modules (server liquid cooling plates and optical module cooling plates), phase change liquid cooling modules, and server uniform heat distribution plates (VC and 3D VC), continuously supplying core parts to leading North American computing power customers and delivering server liquid cooling and power supply-related products in bulk to overseas computing power companies and ecosystem partners. Meanwhile, its subsidiary Seirkons General Redundant Power Supply (CRPS) has achieved mass production, forming a complete product matrix that integrates liquid cooling + power supply. In the Physical AI (humanoid Siasun Robot & Automation) sector, the company implements a three-pronged embodied intelligence strategy focusing on "core component R&D, comprehensive hardware manufacturing services, and industrial scene implementation development" and aims to become "a top 3 global embodied intelligence hardware manufacturer." During the reporting period, the companys manufacturing bases for embodied intelligence in Beijing, Chengdu, Zhengzhou, and overseas began operations, mass-producing and delivering core components, joint modules, and complete machines for humanoid Siasun Robot & Automation, continuously enhancing its industry influence. As of now, the company has provided assembly services for thousands of hardware/complete machines for multiple leading embodied intelligence enterprises and has facilitated the application development and assembly of numerous Siasun Robot & Automation products. Among these, the Glory Siasun Robot & Automation "Lightning" won the championship in the 2026 Beijing Yizhuang Half Marathon for humanoid Siasun Robot & Automation, with Lingyi Itech providing core structural parts and surface treatment products and services for this model. Not only does the company provide complete machine support externally, but its internal embodied intelligence industrial applications have also been upgraded, deploying various industrial humanoid Siasun Robot & Automation in key production processes such as loading and unloading, AOI inspection, and CNC machining. The CNC online loading and unloading processes achieved a 40% overall labor saving through tray changes, tool changes, and IPQC sampling and size inspections, while AOI inspections saw a cost-saving improvement of 30%-50%. On June 26, 2026, the company was listed on the main board of the Hong Kong Stock Exchange, officially establishing an A+H dual capital platform. The raised funds are primarily directed toward expanding server liquid cooling capacity, upgrading humanoid Siasun Robot & Automation manufacturing bases, and developing cutting-edge precision processes. In terms of shareholder returns, the company continues to implement dividends and share buybacks. For the fiscal year 2025, it distributed cash dividends of 145 million yuan, with an intended cash dividend distribution of 162 million yuan for the first half of 2026. Regarding buybacks, as of June 30, Lingyi Itech had repurchased a total of 311 million yuan in A shares and will raise the upper limit for A-share buyback funds to 480 million yuan; as of July 31, 2026, the cumulative buyback amount reached 439 million yuan. Additionally, the companys board of directors voted to propose to the shareholders meeting to authorize the buyback of no more than 10% of the issued H shares (excluding treasury shares) at an opportune time to enhance returns for H-share shareholders.