PATEO CONNECT Technology (Shanghai) Corporation reported interim results for the six months ended 30 June 2026, marked by surging top-line growth driven by smart-cockpit and AI-solution demand, but offset by heavier spending and rising finance costs.

Revenue and Profitability • Group revenue soared 105.10 % year on year to RMB 2.23 billion, led by robust vehicle launches and new design wins. • Gross profit grew 64.70 % to RMB 257.13 million, yet overall gross margin slipped 2.9 percentage points to 11.5 % as new projects entered early ramp-up phases. • Statutory net loss widened 35.10 % to RMB 307.23 million, mainly on a 288.5 % jump in share-based payment expenses (RMB 202.20 million). • Excluding share-based payments and prior-year listing expenses, adjusted net loss narrowed 35.20 % to RMB 105.02 million.

Segment Trends • Smart cockpit solutions remained the core growth engine, contributing RMB 1.99 billion—or 89.2 % of revenue—up 97 % year on year, propelled by mass-production programmes on Qualcomm 8397/8797 and Kirin 9610A platforms plus new AI-cockpit wins. • AI-related solutions expanded more than six-fold to RMB 208.76 million, representing 9.4 % of revenue, as OEM demand for model development, testing and computing infrastructure accelerated. • Vehicle-connectivity support services declined 32.50 % to RMB 29.88 million amid lower user-support revenue. • Other sales fell to RMB 1.89 million.

Cost Dynamics • Cost of sales climbed 111.90 % to RMB 1.97 billion, mirroring volume growth and start-up costs on new contracts. • R&D expenditure increased 33.50 % to RMB 148.22 million, reflecting platform adaptation for high-end chips and AI products; the Group has filed 6,000+ patent applications, with over 2,000 grants. • Selling expenses rose 38.90 % to RMB 83.07 million, while administrative expenses nearly doubled to RMB 303.45 million, largely owing to additional share-option grants. • Finance costs advanced 16.20 % to RMB 32.01 million as borrowings expanded to fund working capital and manufacturing capacity.

Balance-Sheet and Cash Flow • Cash and cash equivalents stood at RMB 1.54 billion at 30 June 2026 (31 Dec 2025: RMB 1.44 billion). • Net operating cash outflow totalled RMB 526.98 million versus an inflow of RMB 80.34 million a year earlier, driven by higher inventories and receivables. • Bank borrowings climbed to RMB 2.97 billion (31 Dec 2025: RMB 2.18 billion); gearing ratio increased to 66.0 % from 63.1 %. • Capital expenditure reached RMB 255.70 million, mainly for new lines at Ruian, Neijiang, Xinchang and Xiamen plants, adding 400,000 units of annual capacity.

Strategic Progress • Secured multiple design wins: three new models on Qualcomm 8295 and five models on Kirin 9610A; first AI Box mass-production order on NVIDIA Thor; cockpit project with a European luxury brand passed acceptance. • Advanced AI Box development and device-cloud integration; expanded AI server and efficiency-tool deployments with external customers. • Pursued vertical integration via proposed RMB 1.40 billion acquisition of 70 % of Chengdu Meenyi, a high-speed optoelectronic chip designer, and agreed to purchase 20 % of Guangzhou Seagull Kitchen and Bath Products for RMB 800.00 million. • Raised HK$495.23 million (approx. RMB 431 million) through a targeted share subscription and placement to fund expansion and strategic initiatives. • Plans under way to convert 71.70 million Domestic Shares (44.31 % of total) into H-shares, subject to regulatory approval.

Outlook Management expects the mass production of on-device AI cockpits, overseas project ramp-ups and the integration of semiconductor assets to underpin medium-term growth, while ongoing investments in R&D and capacity aim to reinforce the Group’s position in high-end intelligent cockpit and AI solution markets.