A traditional outdoor equipment company's half-year earnings forecast has pushed profit growth into triple digits. Toread's July 16 announcement projected H1 2026 net profit attributable to parent between RMB 46 million and 56 million, up 128.92% to 178.69% year-on-year; core profit growth was even higher at 166.58% to 211.01%. These numbers reflect the payoff from a multi-year strategic transformation that is now visible on the financial statements.
Chip Business Becomes Core Profit Engine
The key driver behind the profit surge is two acquisitions completed in late 2025: Shanghai Tongtu and Shenzhen Betterlife, consolidated from January 2026. Q1 data tells the story: the chip segment generated RMB 179 million in revenue, soaring 206.92% year-on-year, and its revenue share jumped from 16.65% at end-2025 to 36.09%. This means the chip business is now approaching half the scale of the outdoor segment, with much faster growth.
Betterlife holds the top market share in fingerprint recognition chips, and its touch-control chips have entered the supply chains of multiple leading notebook brands. Shanghai Tongtu specializes in image and video processing, with its core IP licensed to over 20 mid-to-large chip companies. These are not mere financial additions; they bring mature technological barriers and customer bases.
The outdoor segment posted Q1 revenue of RMB 315 million, up 8.02% year-on-year, steady growth on a high base. The company has increased R&D and operational investment, temporarily impacting outdoor segment profits, but this is structural spending for dual-strategy synergy.
Smart Exoskeleton Commercialization Validates Synergy
The 'chip-empowered outdoor' concept is no longer theoretical. The self-developed Crest C3 exoskeleton weighs just 1.8 kg, has a 10:1 thrust-to-weight ratio, and is priced at RMB 7,699, offering strong value versus international competitors. During the 618 pre-sale period, daily sales exceeded 100 units, signaling that smart wearables are moving from professional circles to the mass market. Consumer groups have expanded to non-first-tier cities, indicating a viable space between price sensitivity and functional need.
On the technology side, Shanghai Tongtu's three-layer full-stack data compression technology can efficiently compress input data, model intermediate states, and trillion-parameter models without retraining, enabling plug-and-play use. In June, the company formed a strategic partnership with a leading domestic automotive AI chip firm to develop in-vehicle large-model compression solutions, extending applications to autonomous driving, robotics, and computing centers. Industry estimates show China's edge-AI market growing from RMB 600 billion in 2026 to RMB 2.1 trillion by 2030—a far higher ceiling than outdoor equipment alone.
FX Factor Amplifies Short-Term Volatility, but Core Profit Quality Is Solid
A non-negligible factor in this profit surge is foreign exchange: the company recorded FX gains this period versus losses a year ago, directly amplifying net profit growth. However, core profit growth outpacing net profit growth indicates that underlying profitability is the real foundation. Huaxi Securities maintains a 'buy' rating, and CICC has significantly raised full-year revenue and profit forecasts, reflecting consensus on the dual-strategy growth path.
On a longer view, the company has paid cash dividends for three consecutive years, totaling nearly RMB 39 million from 2023 to 2025, exceeding 30% of average annual net profit over that period. Returning value to shareholders during a transformation phase signals management's confidence in cash flow and sustainable profitability.