Core Insights - The Shanghai Die Casting Exhibition, themed "Strengthening the Foundation and Promoting Development," took place from July 16 to 18, attracting over 580 leading companies in the high-pressure die casting and non-ferrous alloy special casting industries [1] - Lijin Group showcased its innovations in magnesium alloy thixotropic forming, special casting, and integrated die casting, emphasizing breakthroughs in smart manufacturing and green casting [1][6] Company Developments - Lijin's exhibition highlighted four core equipment and technology solutions: TPI magnesium alloy semi-solid thixotropic forming machine, cold chamber die casting machine E-PRESS850, gantry five-axis machining center GU-2616D, and horizontal extrusion casting machine SCHB400, reflecting the company's grasp of industry trends and providing new solutions for stability, efficiency, and safety [3] - Since 2000, Lijin has been a pioneer in the magnesium alloy die casting field, developing China's first magnesium alloy hot chamber and cold chamber die casting machines, as well as the leading TPI semi-solid thixotropic forming technology [6][7] - Lijin has played a significant role in establishing four national standards and two industry standards in the magnesium alloy sector and has partnered with Tsinghua University and Shanghai Jiao Tong University [7] Technological Advancements - In 2024, Lijin achieved a major breakthrough in its TPI semi-solid magnesium alloy forming technology, winning the International Magnesium Association's "Excellence in Process Award" for its advantages in energy consumption, product performance, and production efficiency [7] - The company has launched three product series based on TPI technology: Micro series for 500-1000 ton die casting machines focusing on small precision parts, Super series for 800-2500 ton machines targeting medium to large parts, and Giga series for 3000-7000 ton machines, potentially becoming the largest magnesium alloy semi-solid die casting equipment globally [7] Strategic Collaborations - At the exhibition, Lijin signed a strategic cooperation agreement with the University of Debrecen in Hungary, focusing on smart manufacturing talent cultivation, technology transfer, and the establishment of a "European Innovation Machinery Center" [8] - The collaboration includes setting up a practical base for students, jointly developing specialized courses in smart manufacturing, and accelerating the industrialization of technological achievements in the Central European market [10] - This partnership aims to enhance Lijin's service capabilities in Europe, address the talent gap, and promote a deep integration of education, research, and industry, thereby increasing its competitiveness in the global market [10]

Core Viewpoint - LK Tech's performance has missed forecasts due to international investment uncertainties, but the company maintains a "Buy" rating due to potential growth from new TPI magnesium alloy products [2][3]. Financial Performance - FY2025 revenue was HK$5,825 million, a slight decline of 0.2% YoY, primarily due to a decrease in die casting revenue, which fell to HK$3,867 million (down 8.9% YoY), while PIMM revenue increased to HK$1,758 million (up 23.3% YoY) [4]. - Operating margin decreased by 1.5 percentage points YoY to 9.5%, with die-casting operating margin at 12.2% (down 0.4 percentage points) and PIMM operating margin at 5.2% (down 0.8 percentage points) [4]. - Domestic revenue improved, with mainland China revenue rising to HK$4,951 million (up 9.3% YoY), while overseas revenue dropped to HK$904 million (down 32.3% YoY) due to international uncertainties [4]. Future Projections - FY2026 revenue forecast is lowered to HK$6,144 million (down 6.8%), while FY2027 revenue is increased to HK$7,223 million (up 2.7%). FY2028 revenue is introduced at HK$7,758 million [2]. - FY2026-FY2028 EPS forecasts are HK$0.251 (down 30.9%), HK$0.373 (down 13.0%), and HK$0.352, respectively [2]. Product Development - The TPI magnesium alloy technology is identified as a key driver for future revenue growth, with targeted magnesium alloy usage per vehicle expected to increase significantly by 2025 and 2030 [5]. - The competitive advantage of magnesium alloys over aluminum alloys is highlighted due to their superior material performance and reduced pricing ratio, which has reached a historically low level of 0.75 since 2025 [5].

Group 1 - International investment banks are optimistic about Chinese assets, with Goldman Sachs raising its target for Chinese stock indices twice in May and UBS predicting net inflows into the Chinese stock market [1] - Southbound capital has seen significant inflows, with net purchases reaching 610.739 billion yuan in the first five months of the year, surpassing 80% of the total for 2024 [1] - Goldman Sachs has revised its forecast for southbound capital flows in 2025 from 75 billion USD (approximately 587.3 billion HKD) to 110 billion USD (approximately 861.5 billion HKD) [1] Group 2 - The company reported revenue of 5.82 billion HKD, with a significant 24.5% increase in the second half compared to the previous period [2] - The gross profit reached 1.6 billion HKD, with the gross margin remaining stable compared to last year [2] Group 3 - Emerging markets in Southeast Asia have shown strong performance, with sales in Vietnam and Indonesia increasing by 54% and 39% year-on-year, respectively [3] - The demand for machinery in Southeast Asia is driven by rapid economic growth, infrastructure expansion, and manufacturing upgrades [3] Group 4 - The company's die-casting machine business achieved revenue of 3.87 billion HKD for the fiscal years 2024-2025, with a notable 38.3% increase in the second half [4] - Profitability in this segment improved by 80.9% quarter-on-quarter, indicating a significant recovery trend [4] Group 5 - The company has established strategic partnerships with leading manufacturers in the automotive industry, enhancing its market competitiveness [5] - Stimulus policies have led to a rapid recovery in consumer demand for 3C and home appliances, supporting sales of the company's small die-casting machines and injection molding machines [5] Group 6 - The die-casting process is increasingly applied in the electric vehicle sector, expanding the market potential for the company's products [7] - New applications in low-altitude aircraft and humanoid robots are emerging, with significant market opportunities projected for the future [8] Group 7 - The injection molding machine segment performed well, generating revenue of 1.76 billion HKD, a year-on-year increase of 23.3% [10] - The company has tailored solutions for various customer needs, resulting in revenue growth across multiple sectors, including consumer goods and packaging [13] Group 8 - The company is positioned at the forefront of the materials revolution, focusing on magnesium alloys and other new materials that are essential for various industries [15] - The company's proprietary TPI semi-solid magnesium alloy forming technology has received recognition for its efficiency and performance [16] Group 9 - The company has launched three product series based on its TPI technology, targeting different market segments and needs [17] - The company has established a comprehensive service network with over 60 localized sales and service centers to enhance customer support [18] Group 10 - The company is expected to benefit from the ongoing global re-evaluation of Chinese assets, driven by its technological leadership and global expansion efforts [19] - The demand for die-casting processes in sectors like electric vehicles and humanoid robots is anticipated to drive future growth [19]

Financial Performance - Total revenue for the year ended March 31, 2025, was HKD 5,824,959, a slight decrease of 0.2% from HKD 5,837,373 in 2024[2] - Gross profit increased by 0.6% to HKD 1,597,207, with a gross margin of 27.4%, up from 27.2%[2] - Operating profit decreased by 18.7% to HKD 535,720, resulting in an operating margin of 9.2%, down from 11.3%[2] - Net profit for the year was HKD 403,041, a decline of 22.2% compared to HKD 517,739 in the previous year, with a net margin of 6.9%[2] - Basic and diluted earnings per share fell by 27.2% to HKD 25.7 from HKD 35.3[2] Assets and Liabilities - Total assets increased by 9.2% to HKD 11,914,252, compared to HKD 10,905,823 in 2024[2] - Total liabilities increased to HKD 7,797,698 thousand in 2025 from HKD 6,889,724 thousand in 2024, a rise of 13.2%[7] - Cash and cash equivalents decreased significantly by 34.3% to HKD 1,560,253 from HKD 2,375,176[2] - Total borrowings increased by 19.9% to HKD 2,148,860, up from HKD 1,792,919[2] Segment Performance - For the fiscal year ending March 31, 2025, the total revenue from external sales in the CNC segment was HKD 5,824,959, with contributions of HKD 3,866,558 from die-casting machines, HKD 1,757,520 from injection molding machines, and HKD 200,881 from the machining center[16] - The segment performance for CNC showed a profit before tax of HKD 475,801, after accounting for corporate expenses of HKD 18,636, financing income of HKD 18,124, and financing costs of HKD 65,923[16] - The total employee costs for the CNC segment for the fiscal year ending March 31, 2025, were HKD 1,008,530, with HKD 737,272 from die-casting machines, HKD 238,418 from injection molding machines, and HKD 32,840 from the machining center[24] Cash Flow and Investments - Operating cash flow showed a net outflow of HKD 224,810 thousand in 2025, compared to a net inflow of HKD 65,939 thousand in 2024[8] - Investment activities resulted in a cash outflow of HKD 828,216 thousand in 2025, up from HKD 505,103 thousand in 2024[8] - Financing activities generated a net cash inflow of HKD 250,977 thousand in 2025, a significant decrease from HKD 2,225,304 thousand in 2024[8] Research and Development - Research costs increased to HKD 113,337,000 in 2025 from HKD 89,859,000 in 2024, reflecting a growth of approximately 26.1%[28] - The company focuses on customized R&D to address industry pain points, having developed the world's first 6000T die-casting machine for large components[68] Market Trends and Strategic Initiatives - The automotive industry is undergoing a transformation towards electric vehicles, with long-term positive prospects despite a slowdown in growth due to macroeconomic uncertainties in 2024[43] - The company is strategically positioning itself for future market trends by reserving advanced technologies for the next 5-10 years[69] - The company aims to deepen its innovation ecosystem by collaborating with top institutions in material science and exploring new business directions[70] Dividend and Shareholder Information - The group plans to propose a final dividend of HKD 0.045 per share for the year ended March 31, 2025, totaling HKD 61,398,000[34] - The board proposed a final dividend of HKD 0.045 per share for the year ending March 31, 2025, down from HKD 0.05 per share in the previous year[79] Compliance and Governance - The company has maintained compliance with the listing rules and corporate governance codes throughout the reporting period[82] - The audit committee reviewed the consolidated financial statements for the year ending March 31, 2025[84]

Stock Options - As of April 1, 2023, the number of stock options available for grant was 85,786,500, representing approximately 6.23% of the company's issued shares[3] - As of March 31, 2024, the number of stock options available for grant increased to 88,226,500, representing approximately 6.41% of the company's issued shares[3]

Core Insights - The 2025 CHINAPLAS exhibition, themed "Transformation·Collaboration·Co-creating Sustainability," attracted over 4,500 exhibitors, showcasing advancements in the injection molding industry towards sustainability, intelligence, and precision [1][3] - Major companies like KraussMaffei, Arburg, and Wittmann Battenfeld demonstrated innovations such as AI energy optimization, high-performance electric motors, and automated processes, indicating a shift towards energy efficiency and technological integration in the industry [3][11] - The global injection molding market is projected to grow from $16 billion in 2025 to $20.1 billion by 2029, highlighting significant growth potential [3] Industry Developments - The exhibition featured specialized zones for injection molding solutions, covering an area of 53,000 square meters, indicating a strong focus on this segment [1] - Approximately 150 countries and regions participated, with over 20% of buyers being international, showcasing the global interest in injection molding technologies [3] - The presence of over 980 "specialized, refined, distinctive, and innovative" exhibitors, including 260 national-level "little giant" enterprises, underscores China's growing strength in high-end manufacturing [3] Technological Innovations - The POTENZA-A series PTA250 servo energy-saving injection molding machine from LKK Technology reduced the production cycle for thick-walled automotive lens to 240 seconds, addressing traditional manufacturing challenges [5] - The ELETTRICA-S series ELS400 electric high-speed thin-wall packaging injection molding machine achieved a 20% efficiency improvement and a 20% reduction in energy consumption compared to traditional models [8] - LKK Technology's sandwich injection technology allows for the incorporation of up to 50% recycled materials in products, promoting both environmental sustainability and performance [9] Market Trends - The successful turnout at CHINAPLAS indicates a robust future for the global injection molding industry, with a focus on continuous innovation as a key to sustainable development [11] - The shift from cost advantages to technological innovation reflects a transformation in the industry, emphasizing the importance of resilience in supply chains [11]

Group 1 - The low-altitude economy is experiencing rapid development, with significant interactions between the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area [1] - A delegation from the Hong Kong Low Altitude Economy Association visited Shaoxing, Zhejiang, to explore local policies and representative companies in the low-altitude economy sector [1] - The Hong Kong government has launched a regulatory sandbox pilot program consisting of 38 projects related to the low-altitude economy, indicating a proactive approach to market opportunities [1] Group 2 - Lijin Technology is strategically transitioning from "precision manufacturing" to "low-altitude empowerment," leveraging its expertise in die-casting and injection molding to enter the low-altitude economy supply chain [1][2] - The company has established deep collaborations with various low-altitude aircraft manufacturers in core component development and cross-border scenario validation, enhancing its competitive edge in the low-altitude economy [2] - Lijin's advancements in new material applications, particularly in carbon fiber technology, align with industry trends and are expected to lead to significant market opportunities [2] Group 3 - Lijin's initiative to extend die-casting technology from ground transportation to three-dimensional space represents a strategic choice aimed at becoming a core supplier in the low-altitude economy supply chain [3] - The company's focus on technology reuse, policy alignment, and ecosystem building aims not only for short-term order acquisition but also for establishing itself as a foundational infrastructure provider in the low-altitude economy [3] - Successful execution of this strategy could unlock a trillion-level market space, marking a significant leap from high-end manufacturing to "three-dimensional intelligent manufacturing" [3]

Core Viewpoint - The magnesium alloy die-casting technology is emerging as a new trend in the industry, with companies like LKK Technology (00558.HK) showcasing innovative solutions such as the TPI semi-solid thixotropic forming technology at the upcoming die-casting annual conference [1] Group 1: Industry Trends - The demand for magnesium alloy materials is increasing due to the industrial manufacturing shift towards lightweight and high-strength materials, positioning magnesium alloys as ideal substitutes in the die-casting industry [1] - The upcoming die-casting annual conference aims to explore whether magnesium alloy die-casting will become the next industry trend, gathering leading experts to discuss technological advancements and market trends [1] Group 2: Company Innovations - LKK Technology will present its TPI magnesium alloy semi-solid die-casting technology, which is a revolutionary process that enhances the company's technological capabilities and provides innovative momentum for the industry [1] - The TPI technology offers significant advantages in cost control, forming speed, product quality, energy efficiency, and safety, making it highly flexible for various production scenarios [1] Group 3: Market Demand and Growth Potential - The automotive industry's push for lightweight materials is expected to significantly increase the demand for magnesium alloys, with projections indicating a need for approximately 175 million tons of magnesium resources by 2030 if China's vehicle sales reach 39 million [2] - Emerging industries such as humanoid robots and drones are also expected to drive demand for magnesium alloys, with the humanoid robot market projected to require substantial quantities of lightweight materials for improved mobility and performance [2] - The eVTOL (electric vertical takeoff and landing) market is anticipated to grow exponentially, further boosting the demand for magnesium alloys, with a projected compound annual growth rate of 178.95% from 2018 to 2026 [3]

Financial Performance - For the six months ended September 30, 2024, the company's revenue was HKD 2,594.4 million, a decrease of 5.8% compared to HKD 2,753.7 million in 2023[8]. - Gross profit increased by 3.3% to HKD 744.6 million, with a gross margin of 28.7%, up 2.5 percentage points from 26.2%[8]. - Operating profit decreased by 20.6% to HKD 216.5 million, resulting in an operating margin of 8.3%, down 1.6 percentage points from the previous year[8]. - Net profit for the period was HKD 165.9 million, a decline of 19.1%, with a net profit margin of 6.4%, down 1.1 percentage points[8]. - The company reported a decrease in earnings per share to HKD 10.9, down 26.8% from HKD 14.9 in the previous year[8]. - Total comprehensive income for the period was HKD 173,742,000, significantly up from HKD 35,800,000 in the previous year, driven by a foreign exchange gain of HKD 7,819,000[79]. - The profit attributable to equity holders of the company was HKD 156,204,000, compared to HKD 35,800,000 in the prior year, indicating a substantial increase[79]. - Operating cash flow for the period was negative at HKD 166,811,000, a decline from a positive cash flow of HKD 175,721,000 in the same period last year[86]. Assets and Liabilities - The company's total assets increased by 2.2% to HKD 11,145.4 million, while net assets rose by 0.8% to HKD 4,049.1 million[8]. - Total liabilities rose to HKD 7,096,298,000, compared to HKD 6,889,724,000, indicating an increase of 3.0%[73]. - The company’s equity totaled HKD 4,049,114,000, up from HKD 4,016,099,000, marking a growth of 0.8%[71]. - The total outstanding borrowings amounted to HKD 1,709.0 million, with approximately 86.8% classified as short-term loans[27]. - The company’s total liabilities include both secured and unsecured bank borrowings, with unsecured borrowings at HKD 1,501,127,000 as of September 30, 2024[175]. Cash Flow and Financing - Cash and cash equivalents decreased by 26.5% to HKD 1,746.7 million, indicating a significant reduction in liquidity[8]. - The company recorded cash and cash equivalents of HKD 1,746.7 million as of September 30, 2024, down from HKD 2,375.2 million on March 31, 2024[27]. - The company raised new bank loans amounting to HKD 572,034,000 during the period, while repaying HKD 656,415,000 in bank loans[86]. - The company incurred capital expenditures of HKD 261,962,000 for the purchase of property, plant, and equipment, compared to HKD 171,066,000 in the previous year[86]. Business Segments - The company’s die-casting business revenue was HKD 1,622.8 million, a decline of 18.7%, while injection molding revenue increased by 30.1% to HKD 881.3 million[16]. - The CNC machining center business generated revenue of HKD 90.4 million, an increase of 13.7% compared to the same period last year[20]. - The group reported segment performance with die-casting machines generating HKD 169,093,000, injection molding machines HKD 51,265,000, and CNC machining centers HKD 5,708,000, totaling HKD 226,066,000[118]. Employee and Shareholder Information - The total employee cost for the review period was HKD 544.4 million, compared to HKD 511.4 million in 2023, reflecting an increase of approximately 6.4%[31]. - As of September 30, 2024, the company had 5,294 full-time employees, indicating a stable workforce size[31]. - The major shareholders include Girgio, holding 849,078,004 shares, representing 62.23% of the total equity[42]. - The company has provided various employee benefits, including mandatory provident funds and stock option plans, to enhance employee retention and performance[31]. Stock Options and Incentive Plans - The company granted a total of 27,540,000 stock options to 390 employees on September 24, 2021, as part of its stock option plan[30]. - The exercise price for the stock options was set at HKD 18.9, with a market price of HKD 19.86[55]. - The stock option plan is effective for 10 years from September 8, 2016, aimed at incentivizing eligible individuals for their contributions to the group's performance[157]. - The total number of stock options held as of September 30, 2023, is 25,520,000, with no options exercised or forfeited during the period[163]. Market Outlook and Strategy - The company anticipates a recovery in market conditions in the second half of the fiscal year 2024/25, supported by easing inflation and lower financing costs[14]. - The company aims to deepen its globalization strategy, having successfully opened production bases in the USA, Japan, Mexico, and Europe, with plans to expand further in Southeast Asia[22]. - The company plans to continue its market expansion strategy, focusing on new product development and technology advancements[54]. - The company has outlined a strategic plan for potential mergers and acquisitions to bolster its market position[54]. Research and Development - The company is focusing on the development of magnesium alloys, aluminum alloys, and high-performance composite materials to lead innovations in the manufacturing of new energy vehicles[25]. - Employee costs for R&D activities amounted to HKD 67,492,000, up from HKD 60,234,000 in 2023, indicating an increase of 20.5%[196]. - The research costs incurred were HKD 55,342, significantly higher than HKD 26,862 in 2023, representing a growth of 105.5%[196]. Compliance and Governance - The company has complied with the corporate governance code as set out in the listing rules during the review period[63]. - The audit committee reviewed the unaudited condensed consolidated interim financial information for the six months ended September 30, 2024[64]. - The board confirmed compliance with the standard code for securities transactions by directors throughout the review period[63].

Financial Performance - Revenue for the six months ended September 30, 2024, was HKD 2,594,448, a decrease of 5.8% compared to HKD 2,753,733 in the same period of 2023[2] - Gross profit increased by 3.3% to HKD 744,623, with a gross margin of 28.7%, up from 26.2%[2] - Operating profit decreased by 20.6% to HKD 216,520, resulting in an operating margin of 8.3%, down from 9.9%[2] - Net profit for the period was HKD 165,923, a decline of 19.1% from HKD 205,202 in the previous year[2] - Basic and diluted earnings per share were HKD 10.9, down 26.8% from HKD 14.9[6] - The total comprehensive income for the period was HKD 173,742, compared to HKD 35,800 in the previous year[11] - The company reported a net profit before tax of HKD 234,394 thousand for the period, reflecting operational efficiency despite revenue decline[39] - The profit attributable to equity holders was HKD 148.4 million, down 27.7% year-on-year[75] Assets and Liabilities - Total assets increased by 2.2% to HKD 11,145,412 from HKD 10,905,823[2] - Total liabilities decreased by 4.7% to HKD 1,709,041 from HKD 1,792,919[2] - Total liabilities increased to HKD 7,096,298 thousand, up from HKD 6,889,724 thousand, representing a growth of approximately 3.0%[16] - The total non-current liabilities reached HKD 2,803,113 thousand, an increase from HKD 2,734,139 thousand, reflecting a growth of approximately 2.5%[16] - The company’s total liabilities as of September 30, 2024, were HKD 2,436,486,000, compared to HKD 2,358,306,000 as of March 31, 2024[64] Cash Flow and Cash Management - Cash and cash equivalents decreased by 26.5% to HKD 1,746,722 from HKD 2,375,176[2] - Cash flow from operating activities showed a net outflow of HKD 166,811 thousand, compared to an inflow of HKD 175,721 thousand in the previous year, indicating a significant decline[18] - Cash and cash equivalents decreased by HKD 630,592 thousand, down from an increase of HKD 84,936 thousand in the previous year[18] - The cash and cash equivalents at the end of the period stood at HKD 1,746,722 thousand, down from HKD 666,635 thousand in the previous year[18] Segment Performance - Revenue from the die-casting segment was HKD 1,622,828 thousand, while injection molding generated HKD 881,269 thousand, contributing to a total revenue of HKD 2,594,448 thousand[29] - The total operating profit for the segments was HKD 226,066 thousand, reflecting a decrease compared to the previous period[29] - The CNC machining center generated revenue of HKD 90,351 thousand, contributing to the overall segment performance[29] - The revenue breakdown includes HKD 1,622,828 thousand from die-casting machines, HKD 881,269 thousand from injection molding machines, and HKD 90,351 thousand from machining centers[37] Costs and Expenses - For the six months ended September 30, 2024, the cost of raw materials and consumables was HKD 1,727,827,000, an increase from HKD 1,576,578,000 in 2023, representing a growth of 9.6%[42] - Employee costs for the same period rose to HKD 544,427,000 from HKD 511,355,000, reflecting an increase of 6.5%[42] - Research costs significantly increased to HKD 55,342,000, compared to HKD 26,862,000 in the previous year, marking a substantial rise of 105.5%[42] - The total sales cost for the period was HKD 1,849,825,000, down from HKD 2,033,245,000, representing a decrease of 9.1%[42] Dividends and Shareholder Information - The company declared an interim dividend of HKD 0.03 per share, totaling HKD 40,932,000, compared to HKD 61,938,000 in the previous year[57] - The interim dividend declared for the six months ending September 30, 2024, is HKD 0.03 per share, down from HKD 0.045 per share in 2023[94] Future Outlook and Strategies - The company plans to enhance its market expansion strategies and invest in new product development to drive future growth[39] - The company is actively engaging with several new energy vehicle manufacturers to establish cooperation, which is expected to drive future revenue growth[76] - The company is developing a dual-pressure die-casting machine and TPI semi-solid magnesium alloy die-casting machine, both of which are industry firsts[77] - The company is actively expanding its global footprint, having established production bases in the US, Japan, Mexico, and Europe, and is enhancing its sales network in Southeast Asia[84] Audit and Compliance - The audit committee, consisting of four independent non-executive directors, is responsible for reviewing and supervising the financial reporting process and internal control systems[99] - The audit committee has reviewed the unaudited condensed consolidated interim financial information for the six months ending September 30, 2024[101] - The interim results announcement will be published on the company's website and the Hong Kong Stock Exchange website[102]