On May 27, PATEO (02889) disclosed an operational update for the first quarter of 2026. During the reporting period, the company achieved a year-on-year revenue increase exceeding 100%, with a notable improvement in operating profit margin. The core growth drivers are clearly attributed to three main areas: the gradual realization of a high-end strategy for cockpit intelligence, overseas projects entering the batch delivery phase, and AI software and cloud-based intelligent services beginning to contribute new growth.

**High-End Cockpit: Volume and Value Drive Sustained Momentum** As the core revenue pillar for PATEO, the growth momentum of its intelligent cockpit solutions remains strong. During the reporting period, the company's high-end flagship products based on the Qualcomm Snapdragon 8295 platform continued to scale up among mainstream domestic OEMs, while collaborations on intelligent cockpits based on the Kirin 9610A platform further deepened, with downstream demand remaining robust. This achievement stems from PATEO's years of focused investment and accumulation in the high-end cockpit segment. The company's products primarily focus on cockpit domain controllers, with 2025 delivery volume reaching 1.3 million units, a year-on-year increase of over 40%. On the localization path, PATEO has deeply integrated with the HarmonyOS ecosystem, significantly expanding the range of vehicle models equipped with its Kirin 9610A processor-based intelligent cockpit solutions. The company is now one of the few suppliers in the market capable of providing solutions based on both Qualcomm and Kirin platforms. Looking ahead, the growth logic remains clear. PATEO is recognized as one of the few domestic full-stack suppliers capable of large-scale delivery of solutions based on both Qualcomm Snapdragon and Kirin platforms. It holds a significant cooperative position in the intelligent cockpit business for the Harmony Intelligent Mobility (HIMA) brand and is well-positioned to benefit from the ongoing expansion of the HarmonyOS automotive ecosystem. As HarmonyOS intelligent mobility models ramp up production from 2026-2027, market share is projected to rise substantially by 2030. Leveraging its "dual-core strategy," PATEO can rapidly capture the high-end market while securing orders for premium models in the coming years, combining business resilience with technological advantage.

**Overseas Market: A Qualitative Leap from 'Breakthrough' to 'Volume'** From "securing design wins" to "batch delivery," PATEO's overseas business completed a critical leap in Q1 2026, marking the formal entry into the results-realization phase of its globalization strategy. According to the quarterly performance announcement, PATEO's premium aftermarket intelligent cockpit project in collaboration with an internationally renowned luxury automotive brand has successfully passed customer acceptance, with related products set to commence sales and delivery in markets such as Europe and the Middle East. Another pre-install intelligent cockpit project for an overseas luxury brand is nearing the end of testing and verification, gradually progressing toward customer acceptance and mass production preparation. To support this global expansion, PATEO recently appointed Dr. Stefan Ortmanns, a seasoned expert in conversational AI, as Head of European Operations. With over 20 years of deep industry experience, Dr. Ortmanns led the development of conversational AI solutions adopted by the vast majority of the world's top-tier automakers. This appointment not only crucially strengthens localized operational capabilities in Europe but also signifies PATEO's entry into a new cycle of accelerating the commercialization of its overseas market value.

**AI Strategy: Sustained Breakthroughs in Commercialization** The most market-notable change in Q1 performance stems from the substantial incremental contribution from AI software and cloud-based intelligent services. Following 2025, where AI-related revenue approached CNY 100 million, surging 210% year-on-year, the company's AI business has transitioned from a "harvest period" to an "accelerated realization period," signaling that its intensified AI technology investments have entered a new phase of releasing commercial results. At the foundational technology level, leveraging the NVIDIA DRIVE AGX Thor accelerated computing platform, the company has developed an in-vehicle large language model and is actively promoting the deployment of AI BOX in vehicles. Currently, the AI BOX solution developed on this platform has secured a mass production design win for a next-generation intelligent vehicle model from a leading new energy vehicle manufacturer, marking AI BOX's official transition from technical validation to commercial deployment. Concurrently, PATEO is strategically exploring frontier scenarios such as "Physical AI," "AI Agents," and "AI Emotional Agents," investigating innovative business models like compute power billing and in-vehicle token-based billing, aiming to become a global leader in the "In-Vehicle Token Economy." This series of AI initiatives is not incidental. PATEO has established a comprehensive AI technology system encompassing edge-side model deployment, cloud service coordination, multimodal interaction, and AI Agents, achieving industry-leading full-stack AI capability coverage from underlying computing power to upper-layer applications. Notably, PATEO's deep collaboration with NVIDIA represents another strategic milestone, following partnerships with Qualcomm and Kirin, in jointly defining next-generation AI agent applications with a global top-tier chip giant. This series of strategic alliances with world-leading chip manufacturers not only validates PATEO's core position within the AI industry chain but fundamentally expands the market's perceived limits of its technological capabilities. At the ecosystem level, PATEO has recently secured several significant strategic collaborations: an agreement with the Omoway Group for joint development around high-compute cross-domain fusion and general artificial intelligence technology, jointly expanding the global Software-Defined Vehicle (SDV) domain controller and AGI application markets; and a strategic partnership with Horizon Robotics, forming platform-level solutions for global expansion in the core segments of intelligent cockpit and intelligent driving, integrating domestic and international customer resources to promote the globalization of the "China Solution." Furthermore, regarding mergers and acquisitions, the company recently reached cooperative intentions with Ping An Capital and China Minsheng Bank, securing multi-form financial support of up to USD 1 billion from Ping An Capital and an indicative credit line of up to CNY 2.5 billion from China Minsheng Bank, amassing sufficient resources for pursuing M&A projects aligned with its development strategy.

**Conclusion: Triple Growth Engines Resonate, Profit Inflection Point Nears** The combined force of these three growth engines has enabled PATEO to deliver a strong performance demonstrating strategic execution. The company stated it will continue adhering to its strategic direction of "AI technology as the core, integrating software, hardware, chips, and cloud," deepening its high-end, globalization, and AI initiatives to provide leading AI solutions for automotive and mobile terminals, while continuously building a large AI application ecosystem. As these strategic deployments progress, the company is poised to gradually realize value in subsequent operations, with the contours of a profit inflection point becoming increasingly clear.