Ladies and gentlemen, welcome to Horizon Robotics 2025 Interim Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Mrs. Xuan Jiang, VP and Board Secretary and Head of Investor Relations of Horizon Robotics. Thank you, Xuan. You may begin. Thank you. Good evening, ladies and gentlemen. Welcome to the investor call and audio webcast for Horizon Robotics. On today's call, we have Dr. Kai Yu, Founder, CEO, and Chairman of the Board, and Mr. Lei Wang, Acting CFO and Head of Capital Markets of Horizon Robotics. We will begin with Dr. Yu sharing our latest strategic and business developments. This will be followed by Mr. Wang's review of the company's financial performance in the first half of 2025. We will then proceed to the Q&A session. Before we start, we want to remind you that this call may include forward-looking statements, which are underlined by a number of risks and uncertainties, and may not be realized in the future for various reasons. Information about general market conditions comes from a variety of sources outside Horizon Robotics. This presentation also contains some unaudited, non-FRS financial measures that should be considered in addition to the company's financial criteria. I will now turn the call over to our CEO, Dr. Yu. [Foreign Language] Good evening, dear investors. [Foreign Language] I am Dr. Kai Yu, Founder and CEO of Horizon Robotics. I am pleased to be here to share with you our business performance over the past six months. [Foreign Language] First of all, I would like-- Yes, please go ahead. First of all, I would like to share with you some of my recent thoughts on the intelligent assisted driving market in China. In the first half of 2025, sales of domestic car brands surged, with their market share exceeding 63% of the Chinese passenger car market. At the same time, the penetration rate of intelligent driver assistance in domestic brands rose from 51% at the end of 2024 to 59% in the first half of 2025. Under the combined influence of these factors, we rode the momentum in the first half of this year, achieving a doubling in shipment volume. We believe that as the level of intelligence in domestic brands continues to rise, it will bring us sustained growth potential. [Foreign Language] In addition to the increase in volume, we are also seeing an important structural change. The intelligent driving market is moving towards the high end. In the first half of this year, vehicles equipped with the mid-level to high-level assisted driving features, such as Highway NOA and Urban NOA, accounted for 32% of all intelligent vehicles, up from 20% at the end of last year. This means that out of every 10 new passenger vehicles sold in China, more than six are equipped with intelligent assisted driving features, and more than two of these possess advanced functions. We believe that enhanced user experience, more stringent regulatory frameworks, and the thriving democratization of intelligent assisted driving technology will further drive the higher end of intelligent assisted driving systems and reshape the value chain, delivering a higher dollar content per vehicle for Horizon. [Foreign Language] Against the backdrop of rising volumes and prices, I'm delighted to share with you some significant milestones achieved by Horizon in the first half of this year. [Foreign Language] First of all, in the first half of 2025, we maintained our leadership in the ADAS basic assisted driving market, with a market share of 45.8%, and secured the top one position once again in the overall intelligent assisted driving computing solutions market among Chinese domestic brands, with a market share of 32.4%, further strengthening our leadership in the Chinese market. [Foreign Language] Second, the company shipped approximately 2 million units of automotive-grade processing hardware during the reporting period, more than doubling year on year. What is even more noteworthy is that around 1 million units of processing hardware supporting our mid-level to high-level intelligent driving solutions have been shipped, already accounting for half of our total shipments in the first half of the year, which is 6x more than the same period last year. This growth has been mainly driven by our next-generation Journey 6 series products. This validates our assessment that the intelligent driving segment is moving up market, with mid to high-level intelligent driving becoming the core engine driving our business growth. [Foreign Language] Our 6B processing hardware, serving next-generation basic ADAS solutions, has also been successfully launched. Its highly integrated design boosts the performance of next-generation ADAS systems by more than twofold, while significantly optimizing system cost, power consumption, and size. This accelerates the popularization of intelligent driving, helping customers reduce costs and improve efficiency, and it will subsequently become our main product for entering the overseas ADAS market. At present, during the performance period, we have already secured model nominations in the international market from two Japanese car manufacturers. We estimate that these two projects will bring us shipments exceeding 6.5 million vehicles over their full life cycle. We believe that subsequently, the 6B will achieve cumulative shipments in the tens of millions in the global market. At this point, Horizon has become the world's only intelligent driving technology provider to have completed a full product portfolio across high, middle, and low-end segments, covering both domestic and international premium and mainstream markets, providing strong support for the company's future revenue growth. [Foreign Language] Thirdly, by the first half of this year, we have secured nearly 400 new model nominations in total, among which more than 100 models are equipped with mid to high-level intelligent driving functions. In the first half of this year, more than 15 vehicle models equipped with our mid to high-level intelligent driving solutions have successfully entered mass production and have been launched in the market. [Foreign Language] In addition, in terms of internationalization, apart from the nominations of the two Japanese car makers we have just mentioned in the global markets outside China, including the world's largest and second-largest automotive groups, there are a total of nine joint venture car manufacturers in China with 30 vehicle models nominating our solutions, some of which will begin mass production at the end of this year. This demonstrates that following our partnership with Volkswagen, we have successfully expanded our international product footprint and enhanced our global brand influence. [Foreign Language] These positive business developments enabled us to record a revenue of RMB 1.57 billion in the first half of this year, representing a year-on-year increase of 67.6%, with a gross profit margin of 65.4%. After deducting the cloud computing expenses for model training, our operational efficiency has steadily improved. However, as we mentioned at the beginning, moving towards a higher level is the main theme of the next stage in the intelligent driving industry, and the demand for cloud services driven by advanced algorithms and software of high-level intelligent driving solutions is steadily increasing. We are advancing the development of the all-scenario urban assisted driving solution, Horizon SuperDrive, i.e., HSD, and we firmly believe that HSD will become the technological foundation for the future robotaxi, autonomous taxi. Therefore, we strategically increased investment in cloud services, resulting in an adjusted operating loss of RMB 1.11 billion. We believe this part of R&D investment will help the company seize the major trend of upgrading product structures towards the high end, bringing tremendous growth opportunities, while enabling us to accelerate our transformation into the infrastructure of the entire industry in the era of intelligent driving. [Foreign Language] Next, I would like to give you a detailed introduction to Horizon' s two revenue streams from automotive solutions, as well as IP licensing and services. [Foreign Language] The increase in the proportion of mid to high-end solution shipments in the company has resulted in the average selling price, ASP, of solutions in the first half of the year increasing by 70% compared with last year. Combined with the overall shipment volume doubling during the reporting period, the company's revenue from automotive products and solutions reached RMB 780 million, which is 3.5x that of the same period last year, of which mid to high-end solutions contributed over 80% of the revenue. This fully reflects our growth logic of both rising volumes and rising prices. [Foreign Language] We also leveraged world-class algorithm capabilities to drive the intelligent transformation from automobiles to software-defined vehicles. During the reporting period, we licensed a series of algorithms, software, and tools to more than 30 automakers and partners, assisting customers in achieving shorter product development cycles and reducing upfront development costs, generating IP licensing and service-related revenue of RMB 740 million, representing a year-on-year increase of 6.9%. [Foreign Language] We are very pleased to announce that after the reporting period and as of now, the cumulative shipments of our Journey series processing hardware have exceeded 10 million units, making us the first intelligent driving technology provider in China to achieve this milestone and setting a new benchmark for the industry. [Foreign Language] Looking ahead, we expect that as the penetration of advanced features such as urban assisted driving continues to rise, the cost structures improve, and the market goes to the lower-tier segments. We anticipate that the price range for the models equipped with urban assisted driving solutions will further decrease to RMB 150,000 segments. Product upgrading and market penetration are jointly driving intelligent driving to accelerate its reach into more sub-segments and price ranges, while also helping to raise our future ASP to a higher level. [Foreign Language] At the end of this year, Horizon HSD will make its debut on the Chery Exeed E05, commencing mass production and delivery. We believe that based on our industry-leading one-stage end-to-end architecture and reinforced learning capabilities, we will bring more users a safe, professional, and comfortable all-scenario assisted driving experience with HSD. Recently, quite a few professional media have tested and also drove our HSD and have highly praised it as China's FSD. We will be hosting pop-up events in several cities, and we welcome everyone to come for a test-ride experience before mass production. [Foreign Language] We have also observed quick progress in the evolution of intelligent driving technology from L2 to robotaxi. Technological advancements, the cutting-edge practices of overseas peers, the continued improvement of the policy environment, and the participation of new market entrants are bringing new opportunities for growth to this industry. Relying on the company's expertise in advanced algorithms and leading-edge processing hardware, we expect to advance cooperation in the second half of this year with certain operating enterprises in the robotaxi sector, providing them with underlying technological support and jointly building and enhancing core competitiveness. [Foreign Language] Finally, Horizon will remain committed to innovation and open collaboration, pursuing a holistic approach, integrating hardware and software, and increasing investment in next-generation solutions. We will continue to expand our global footprint, deepen partnerships with leading international automakers and partners, and further develop a global intelligent assisted driving ecosystem. [Foreign Language] Thank you. Now, let's invite Horizon's Acting CFO, Mr. Wang Lei, to give everyone a brief overview of more detailed numbers for the first half of the year. All right, thank you, Dr. Yu and everyone. I will now present our P/E financial results for the sixth quarter, month ended June 30th, 2025. To be mindful of the length of this call, I will focus on the main items in my discussion today. I encourage participants to refer to our earnings release, which was posted on our IR website, for additional details. Our total revenue for the first half of this year amounted to RMB 1.57 billion, representing an increase of 67.6% compared to the same period of last year. This growth was primarily driven by our automotive solutions, which achieved a robust growth of 67%. Our revenue from automotive solutions is comprised of revenue from product solutions plus license and services. Revenue generated from product solutions surged by 250% to RMB 777.8 million. This exceptional growth stemmed from deliveries volume more than doubling, which was fueled by the industry-wide democratization of intelligent driving and our significantly improved dollar content per vehicle due to a higher mix of pricing hardware that supports highway and on-way features. The revenue generated from license and services increased by 6.9% year-on-year to RMB 738.5 million. We maintained steady in our IP licensing businesses as clients increasingly integrate our IP into their software stacks. Both ongoing and completed service projects generated additional revenue driven by our growing number of design wins, and also the associated technical collaboration to accelerate the deployment of intelligent assisted driving features. Our overall gross margin was 65.4% in the first half of this year, keeping that very strong position compared with other automotive solution providers. Moving on to the expenses, our R&D expenses reached RMB 2.3 billion, representing a 62% increase year-on-year. As Dr. Yu just explained, we strategically increased our R&D investment to intensify the development efforts on Horizon SuperDrive, our advanced solution designed to handle more complex driving scenarios. Its advanced algorithm and also software increasingly demand cloud resources. We are convinced that this investment will empower the company to harness the profound structural shifts in the intelligent driving businesses and also translate them into substantial growth opportunities. The administrative expenses increased by 26.3% year-on-year to RMB 307.2 million. Selling and marketing expenses increased by 37.1% to RMB 272.1 million. Both SG&A expenses grew at a rate far below our revenue growth rate, reflecting the enhanced efficiency of Horizon 's daily operations. This resulted in our operating loss of RMB 1.6 billion. We defined adjusted operating loss as operating loss for the period adjusted by adding back SBC share-based compensation, which are non-cash in nature. We also adjusted by adding back the capital raising expenses, which mainly related to our recent top-up placement. Our adjusted operating loss was RMB 1.1 billion as compared to RMB 824 million for the six months ended June 30 last year. Last but not least, moving further to the bottom line, accounting for equity-method investment losses and also losses on fair value change to the preferred shares, we recorded a net loss of RMB 5.2 billion versus a net loss of RMB 5.1 billion for the same period of last year. This concludes our maintenance presentation. I will turn the call over to the operator to facilitate the Q&A session. Operator, please. Thank you, management. Now we will start the Q&A session. If you want to raise a question, please press star one. If you want to cancel a question, please press star two. Please feel free to raise any questions. To participate in our written Q&A, just type your question into the Ask a Question text area, then click the Submit button. If you are a Mandarin speaker, please ask your questions in Chinese first, then follow with English translation. Thank you. We will now take our first question from Tim Hsiao of Morgan Stanley. Please go ahead. [Foreign Language] Our first question is about the volume sales and the sales rate. Because we noticed that Dr. Yu just mentioned that volume sales had a doubling%, with mid to high-end solutions increasing sixfold compared to the sales during the same period last year. Could the management team elaborate a little bit more about the major customers for your mid to high-end products in the first half of this year? In the meantime, could the management teams also provide guidance on the full-year shipments and the proportion of the mid to high-end sales into the second half? Thank you. [audio distortion] Sorry, we couldn't hear you. [Foreign Language] Thank you, Tim, for your question. In the first half of this year, our shipment for our automotive solution has witnessed a rapid growth. BYD is the largest customer of Mono Series solutions based on our Journey 2 and 3 processing hardware. Thanks to the democratization of intelligent driving at the beginning of this year, quite a few vehicles based on the Horizon Mono Series solutions have been upgraded to the ADAS solution based on Journey 6M processing hardware. In the first half of this year, BYD and AutoLeaf are the largest customers for us in terms of shipments. Actually, both of them are also the early customers for this solution. In terms of the shipment, they are also the largest for our mid-level and high-end products, accounting for more than 50%. [Foreign Language] In addition to the BYD Golf ISE and AutoLeaf AD Pro putting into mass production in the first half of this year, many of our customers are now going to launch their models in the second half of this year, such as Geely, Chery, and Changan. Therefore, we are very optimistic about our global shipments. We are also confident that we can achieve the shipment of around 4 million units, including the low-end, mid-end, and high-end solutions, accounting for half to half. In essence, our business will not rely on some single brands. Actually, we are relying on the uptrend of the entire market. [Foreign Language] We are also convinced that thanks to the mass production of HSD by the end of this year, we estimate that the shipment of Journey 6P and HSD will also achieve around 10,000 units this year. [Foreign Language] My second question is about the high-end solution the J 6P. Could the management team briefly comment on the outlook of the long-term or immediate revenue contribution from J 6P plus the Horizon SuperDrive, HSD in the following years? What kind of revenue contributions you can achieve? That's my second question. Thank you. [Foreign Language] Thank you, Tim, once again for your question. The ASP for J 6P and HSD will be much more expensive than the price of J 6E and M. Our products will move in uptrend, up market, and move into the high end. This is also one of the core reasons why we can witness both rising volumes and prices in the second or in the first half of this year. We are convinced that very good product experience can deliver the customers and the consumers with real values. In the end, we can achieve all win results between consumers and automakers and also our solution providers. When we look ahead into the future market mix, the intelligent driving will also be penetrating into the mainstream market. Currently, maybe for the ADAS and HSD will become the standard installation in the next two to three years. In the future, even those segments between RMB 100,000-RMB 150,000 will also become the standard, and car models equipped with urban NOA, including HSD. In China, the passenger cars and above RMB 100,000 account for 80% of the total sales of passenger cars. That is about 20 million vehicles. For each single model, we are convinced that we can achieve several hundred US dollars in that. Because of this higher ASP and also uptrend in the market, we are going to see very huge room for our future growth. It is believed that in the next probably two to three years, we are going to achieve millions of dollars in this market through our HSD solutions. Thank you very much for sharing all the details, and congratulations on a great result again. Thank you. Thank you, Tim. Thank you. We will now take our next question from Bin Wang of Deutsche Bank. Please go ahead. [Foreign Language] My question is about the volume and the ASP guidance. You actually have been doing very well in the volume growth, doubling the volume, and we see that also ASP see a very fast growth. Can you provide a guidance for the second half of this year or maybe 2026? Thank you. [Foreign Language] Thank you for your question, Mr. Wang. In the first half of this year, we can see that the sales and the volume of Chinese domestic brands has been increased by 7.5% points year-on-year. Also, the penetration rate of the intelligent assisted driving of Chinese domestic brands has also been improved by nearly 8% points compared with the end of last year. Based on such a high base number last year, our market share continues to rise. This is a very important booster for our high growth of the shipment in the first half of this year. Looking ahead, I think the following factors will continue to promote our shipment. First of all, the implementation and also the launch of our products in China's domestic and high-end market. As I mentioned just now, our HSD will be mass produced by the end of this year. Also, next year, it will continue to be mass produced, which will continue to improve our market share in the high-end market. Second, the products, our products to be installed in the Volkswagen vehicles in China, and they will be mass produced by the end of this year. We will continue to be launching in other joint venture and brands. These are also the breakthroughs, as I mentioned just now. We have also received the vehicle model nominations by Japan's largest auto group, including nine joint ventures and 30 vehicle models. This is also going to increase our market share and shipment in China's JV market. Thirdly, the international market. We have already been nominated in the international market by two Japanese automakers. Just for these two projects, the total shipments in the entire lifecycle is expected to exceed 7.5 million units. In the overseas market, there's no new competitor for us. Also in China, based on our best-in-class products and technologies, we are already the leader in this segment. We are also convinced that in the international market, we are going to duplicate our China's success story. We can continue to achieve the shipments totaling to maybe tens of millions of units in the global market. As to the ASP, as we mentioned just now, thanks to the democratization of intelligent driving in the first half of this year, and our new generation products accounted for nearly half of the shipments, which has also made ASP into a new height. Looking ahead, the middle level and also the high-end products will be becoming the mainstream. Thanks to the mass production of our HSD in the second half of this year, we are going to provide consumers with a very safe, professional, and comfortable all-scenario assisted driving experience. We also believe that when J 6P and HSD are increasingly adopted, our ASP will also be increased to a new height. In the next 5- 10 years, we believe that the entire industry will also move towards the era of all-delivery autonomous driving, which will continue to drive the ASP to reach a new height. We are also going to provide more values for the entire industry and our customers. [Foreign Language] My follow-up question is about your global customer. You just mentioned you have nine global joint ventures in China and two Japanese automakers with your solution. Can you know what's the detail about the names of these nine JV and two global names? The other ones, what's the solution they choose from you? If you for overseas market, what's the detailed country you will be using your solution? Thank you. [Foreign Language] Thank you once again for your question. I have to refrain from disclosing the names of these customers. However, I can say that they are the global number one and number two in automotive groups and also some car makers from Japan and South Korea, as well as the joint ventures in China and with the U.S. car makers. Currently, we are providing our solutions. Part of them are based on the ADAS and basic intelligent driving solutions. That's primarily dedicated to the international market. For the other parts, they are based on our new generation J 6 series processing hardware for the middle end and also high-end solutions. That's mainly dedicated to the Chinese market because currently Chinese consumers can embrace higher-end solutions more than the international market. I still believe that globally speaking, the consumers will also embrace such high-end solutions. It's just a matter of time. It is a definite megatrend. We are very convinced that based on our excellent products performance and also our quick customer response, we are able to grab more market share. We believe that we can become one of the leaders in the international market. Actually, we are also working with other international partners, for example, Bosch and Continental and also Denso from Japan. We are working with them in various manners. We are working with them in order to really penetrate into the international market. This is also a very good example for our global partnership. For example, as a Chinese intelligent driving technology provider, we are working with Tier 1 suppliers from Japan and also from Germany. Actually, while we are working with these international partners, for example, we are helping them with their model production, for example, for the Indian market. In terms of the entire lifecycle, we are going to serve millions of vehicles for them. We believe that going forward, we are going to see more examples of such a collaboration. Our collaboration with them will also go deeper with them. Thank you. [Foreign Language] Thank you. We will now take our next question from Ming Chun from Citi Group. Please go ahead. [Foreign Language] My first question is regarding the company just mentioned the possibility of collaborations with others related to Robotaxi. Does the company anticipate the actual deployments of Robotaxi within this year? Additionally, the government is currently working on formulating L2 standards in China. Could you share the company's perspective on this matter? Thank you. [Foreign Language] Thank you very much for your question. Maybe let me reply to the question about L2 first. The relevant national authorities are actively promoting the development of the standards for L2 intelligent driving. As one of the leaders in this segment, we are also very actively participating in the discussion of such standards. We are welcoming and also supporting the development of very strict standards. The unified industry standard will be very important for the entire ecosystem of intelligent driving. For example, why the trains, why the locomotives can be running faster than the cars is because they can be standardized. Second, regarding the robot and also for the L2 standard development, in order to be in the high-end market, it means that we require higher and more computing powers, which will continue to raise the ASP. That is beneficial for us. Second, regarding the robotaxi, when the high-end solutions are getting more mature technologically, and also when we see the robotaxi, which is also accelerating its deployment in some regions, for example, in the United States, we can see that Tesla has also launched their FSD, maybe millions for the robotaxis based on the NOA. I think this is a very good way to collect the data related with the robotaxi and working conditions and road conditions. They can validate these data and improve their simulation system. In Texas, for example, Tesla has already made their local deployment for them to collect and fetch data in a very quick manner. When it comes to Horizon, in the next three to five years, we are going to launch the robotaxi installed with HSD, maybe totally into tens of million. That is very beneficial for Horizon to collect and validate the relevant data, and then we can empower the robotaxi. This is also one of the reasons we are also establishing very close collaboration with some robotaxi operators. We also believe that we are going to launch our robotaxi technologies and projects very quickly. We are going to announce the projects, the collaborative projects, in the near term. [Foreign Language] My second question is about the R&D. We noticed a significant increase in the company's R&D expenditure in the first half. Could you provide some insights into the plans regarding this area and the forward-looking intensity on the R&D spending? Thank you very much. [Foreign Language] Thank you for your question. Looking ahead, currently the middle level or even the advanced level products will be becoming the mainstream. We remain committed to the investment on the HSD R&D and for the all-scenario urban NOA. We have also made a lot of cloud computing resources for model training and iteration, and I can give you some numbers. This year, in terms of the expenditure for the cloud-based computing training, it's more than 3x that of last year. If we deduct this part of the additional expenditure for the cloud computing, we can see that our company's operating efficiency has been higher. For our future investment, we believe that such an expenditure is part of our strategic investment. It can enable our company to really capture the structural transformation for the intelligent industry through this strategic investment, which can also be translated into massive revenue growth. I think this is really a flagship solution for us, which is very conducive for the future ASP and also the customer value and also the entire industry. We are also convinced that going forward, Horizon can also become one of the enablers and then also one of the transformers in terms of the infrastructure for intelligent driving. [Foreign Language] [Foreign Language] Thank you once again. We are looking for you to test and drive. Thank you. Thank you. As we are reaching the end of our conference call now, I would like to turn the call back over to the company for any closing remarks. Due to time constraints, we will now conclude today's call. Thank you again for joining us. If you have any further questions, please feel free to contact our IR team. Thank you. This concludes today's call. Thank you for joining. Goodbye.