A traditional outdoor apparel company posted a 128% net profit surge in H1 2026, with non-recurring profit growth approaching 211%—and the biggest driver was not its outdoor gear, but its chip business. This striking contrast reveals that Toread (300005.SZ) is undergoing a fundamental business logic shift from 'selling jackets' to 'making chips plus terminals.'
Inflection Point: Chip Revenue Surpasses Outdoor, Core Business Profitability Improves
According to Toread's H1 2026 performance forecast released on July 16, the company expects net profit attributable to shareholders between 46 million and 56 million yuan, up 128.92% to 178.69% year-on-year. Non-recurring profit is projected at 42 million to 49 million yuan, a surge of 166.58% to 211.01%. The faster growth in non-recurring profit indicates reduced noise from non-operating items and improved earnings quality from core operations.
The primary driver is the chip division. In Q1 2026, chip revenue hit 179 million yuan, skyrocketing 206.92% and accounting for 36.09% of total revenue—overtaking the outdoor segment for the first time as the largest revenue source. Single-quarter chip revenue nearly matched the full-year 2025 chip revenue of 230 million yuan, far outpacing the outdoor business. The announcement specifically attributed the growth to newly consolidated subsidiaries Shanghai Tongtu and Shenzhen Betterlife, both contributing profit increments. Favorable exchange rate movements also added to earnings.
Policy Tailwinds: Dual-Business Aligns with '15th Five-Year' Consumption Priorities
Toread's turnaround is not an isolated case. On July 13, the State Council released the '15th Five-Year Plan for Expanding Consumption,' targeting 60 trillion yuan in total retail sales by 2030 and designating sports, smart wearables, silver economy, and AI-integrated consumption as core growth areas. Toread's dual-business model fits squarely within these priorities.
In the sports and outdoor sector, the plan promotes camping, winter sports, hiking, and smart fitness equipment. Toread, with 27 years of professional outdoor brand heritage covering mountaineering, hiking, skiing, and camping, has supplied gear for the Kekexili ecological project and Shenzhou manned space missions, giving it a strong brand moat to benefit from the outdoor consumption boom.
For AI+smart wearables, the plan calls for expanding supply of smart wearables, VR/AR terminals, and AI applications in daily life. Toread's chip portfolio targets upstream links: G2 Touch touch ICs have entered Samsung's automotive supply chain for the Ferrari Luce; Betterlife's fingerprint chips supply Huawei and Xiaomi; Shanghai Tongtu's AI compression IP has partnered with Horizon Robotics for in-vehicle large models.
The silver economy is another key focus. The plan promotes home rehabilitation devices and lightweight smart aging equipment. Toread's self-developed second-generation Crest C3 lower-limb exoskeleton, weighing 1.8 kg and equipped with its own low-power touch and motion-sensing chips, has obtained medical device certification. During the 618 e-commerce promotion, pre-sales of this product exceeded 100 units in a single day, signaling strong demand for home healthcare hardware.
From professional outdoor gear and self-developed chips to AI compression and rehabilitation devices, Toread's dual-business covers all four priority consumption tracks of the 15th Five-Year Plan, creating a positive loop from policy direction to business execution to financial results.
Chip Portfolio Forms Closed Loop, Outdoor-Chip Synergy Builds Moat
The chip division's high growth is not mere M&A aggregation but reflects deep industrial synergy. Through years of integration and R&D, Toread has built four synergistic chip product lines covering the full chain of 'sensing-interaction-display-AI computing optimization.'
- G2 Touch focuses on automotive and consumer OLED touch ICs, verified by Samsung's flexible foldable displays and deployed in high-end automotive terminals.
- Shenzhen Betterlife's fingerprint chips have passed FBI PIV security certification and lead in smart door locks and senior health monitoring devices.
- Beijing Xinneng develops Mini/Micro LED display drivers with gross margins near 50%, sampling for automotive backlight, AR displays, and esports screens.
- Shanghai Tongtu's AI data compression IP has been licensed to over 20 chip companies, with its own compression chip moving toward tape-out.
This multi-product line diversification hedges against single-semiconductor cycle risks. Unlike most chip design firms focused on one niche, Toread can offer integrated solutions from biometric recognition and touch input to display driving and AI optimization, enhancing business stability.
The most critical competitive edge lies in the two-way synergy between chips and outdoor terminals. Outdoor and rehabilitation products provide real-world testing grounds for self-developed chips—the Crest C3 exoskeleton fully uses in-house sensor chips, achieving full supply chain control from chip to terminal. Conversely, self-developed chips enable smart upgrades for traditional outdoor products: sports monitoring, lightweight wearables, and outdoor health devices all leverage proprietary chips, reducing reliance on external processors. This 'chips empowering terminals, terminals validating chips' cycle is a moat that pure outdoor brands or standalone chipmakers cannot replicate.