Let me share my outlook for the next two quarters.
The first key assumption: industry seasonality will persist. Historical data shows that Q2 and Q3 have consistently been the peak delivery periods for our specialty IC and FPGA businesses—the annual equipment procurement cycles and semi-annual settlement milestones at downstream system integrators are concentrated from late first half through Q3. Our internal order pipeline reflects this strong "back-loaded" rhythm, which is why I've set 2026 Q2 revenue at RMB 2.18 billion, roughly 8% YoY growth. The main logic is that FPGA domestic substitution continues to ramp, the import-replacement window is opening, and specialty SoCs and security chips are also contributing steadily. Q3 moderates slightly to RMB 1.98 billion—this follows the historical pattern, as customer acceptance slows toward the end of the quarter, pushing some deliveries into Q4 for revenue recognition.
The second key assumption: gross margin will return to the 56-57% midpoint. Q4 2025 gross margin fell to 51.4%, driven by a combination of temporary product mix shifts and year-end expense accruals; Q1 has already recovered to 52.6%. I expect that by Q2 and Q3, as the higher-margin FPGA and specialty IC segments take a larger share of the mix, gross margin can recover to around 57%. This means operating profit and net profit will show greater operating leverage than revenue—I'm modeling Q2 net profit at RMB 625 million and Q3 at RMB 590 million, basically back in line with the 2025 comparable periods.
The biggest risk, and I'll be candid here, is timing volatility around order recognition. Specialty chip delivery has one characteristic—customer acceptance milestones are not within our control, and order delays of one to two months are routine. This creates "step-function" jumps between quarters. On the competitive landscape, domestic FPGA players are increasing in number, and price pressure—while not fatal—is gradually emerging. I've built in a relatively conservative buffer in my forecast and haven't dared to push growth above the double-digit range.
Overall, this is a "steady with incremental improvement" forecast—revenue back at the historical midpoint with a slight upside, profit elasticity greater than revenue, and the core drivers being product mix improvement and the continued push of domestic substitution.