Group 1: Financial Performance - In the first half of 2025, the company's operating revenue was 1.489 billion yuan, a year-on-year decrease of 18.86% [2] - The net profit for the same period was 257 million yuan, down 42.90% year-on-year [2] - Basic earnings per share were 0.4813 yuan, reflecting a 42.90% decline compared to the previous year [2] - The weighted average return on net assets was 5.99%, a decrease of 5.63% year-on-year [2] Group 2: Product Overview Refrigeration Products - The company offers a diverse range of refrigeration products, including commercial central air conditioning compressors, refrigeration compressors, and heat pump compressors [3] - The performance of screw and magnetic levitation centrifugal compressors used in data centers has shown growth in the first half of the year [3] - Taiwan Dongyuan is a key partner and customer for the company's refrigeration compressors [3] Air Compression Products - The air compressors serve as core equipment in various industries, including engineering machinery, pharmaceuticals, chemicals, electronics, and more [4] - The company is expanding into oil-free air compressor markets, which have significant potential in industries requiring high air quality [4] Vacuum Products - The vacuum products are primarily used in the photovoltaic and semiconductor industries, with plans to expand into lithium batteries, pharmaceuticals, and other sectors [5] - The company has begun small-scale supply to domestic chip manufacturers, indicating a growing market presence [5] - Although current contributions from vacuum products in the semiconductor sector are limited, future growth is anticipated as the industry expands [5] Group 3: Investor Relations Activity - The investor relations activity took place from September 22 to September 26, 2025, involving various investment firms and stakeholders [2] - The company confirmed that no undisclosed significant information was shared during the activity [6]

Core Viewpoint - The penetration rate of magnetic levitation compressors is expected to increase, benefiting Hanzhong Precision Machinery's products due to rising demand for cooling systems in data centers driven by AI computing power growth [1] Group 1: Magnetic Levitation Compressors - The collaboration between NVIDIA and OpenAI includes a significant investment of up to $100 billion (approximately 711.5 billion RMB) for building large data centers, which will drive the demand for upgraded cooling systems [1] - Traditional cooling technologies face energy consumption bottlenecks, making magnetic levitation compressors a key technology for energy-saving retrofits in data centers [1] - Hanzhong Precision Machinery offers a total of 9 models in the RTM series of magnetic levitation refrigeration compressors suitable for data center applications, indicating potential for substantial benefits in the future [1] Group 2: Vacuum Pumps and Industry Outlook - Currently, the company's vacuum pumps are primarily used in the photovoltaic industry, specifically in crystal pulling and battery cell segments [1] - As capital expenditures in the photovoltaic and semiconductor industries are expected to recover, the company is likely to benefit significantly from this trend [1] - The report maintains a "strongly recommended" rating for the company, reflecting positive expectations for its future performance [1]

Investment Rating - The report maintains a "Strong Buy" rating for the company [2][5]. Core Views - The company is expected to face short-term pressure on performance but is anticipated to reach a turning point [3][5]. - The collaboration between Nvidia and OpenAI, involving a significant investment of up to $100 billion, is likely to enhance the demand for the company's magnetic levitation compressors, particularly in data centers [3]. - The semiconductor vacuum pump segment is projected to benefit from the overall development of China's integrated circuit industry, helping the company to narrow the gap with international leaders [4]. - The photovoltaic industry is expected to see a bottoming out of capital expenditures, which will drive sales of the company's photovoltaic vacuum pumps [5]. Financial Forecasts - The company’s net profit is projected to be CNY 641.90 million, CNY 742.62 million, and CNY 858.76 million for the years 2025, 2026, and 2027 respectively, with corresponding EPS of CNY 1.20, CNY 1.39, and CNY 1.61 [5][7]. - The current stock price corresponds to PE ratios of 22.53, 19.48, and 16.84 for the years 2025, 2026, and 2027 respectively [5][7]. Company Overview - Shanghai Hanzhong Precision Machinery Co., Ltd. specializes in the research, development, production, and sales of screw compressors and vacuum pumps, with a total of 240 patents, including 35 invention patents [8].

Group 1 - The core point of the news is that Hanzhong Precision Machinery Co., Ltd. has experienced a significant decline in stock price, dropping 5.1% on September 25, with a total market value of 13.726 billion yuan and a cumulative decline of 5.88% over four consecutive days [1] - Hanzhong Precision Machinery specializes in the research, development, production, sales, and after-sales service of screw compressors, with its main business revenue composition being 72.36% from compressors, 18.57% from vacuum products, 7.88% from parts and maintenance, and 1.19% from casting products [1] - The company is located in the Fengjing Industrial Development Zone of Jinshan District, Shanghai, and was established on January 7, 1998, with its listing date on August 17, 2007 [1] Group 2 - Among the top ten circulating shareholders of Hanzhong Precision Machinery, a fund under Southern Fund has increased its holdings in the Southern CSI 1000 ETF (512100) by 368,800 shares in the second quarter, now holding 1.963 million shares, which accounts for 0.37% of the circulating shares [2] - The Southern CSI 1000 ETF (512100) has a current scale of 64.953 billion yuan, with a year-to-date return of 27.85% and a one-year return of 63.96%, ranking 1954 out of 4220 and 1325 out of 3820 in its category, respectively [2] - The fund manager of Southern CSI 1000 ETF is Cui Lei, who has been in the position for 6 years and 324 days, with the best fund return during the tenure being 137.49% [3]

Core Viewpoint - Hanbell Precise Machinery experienced a 5.02% decline in stock price, closing at 26.70 CNY per share, with a trading volume of 7.77 billion CNY and a turnover rate of 5.26%, resulting in a total market capitalization of 14.277 billion CNY [1] Company Overview - Hanbell Precise Machinery Co., Ltd. is located in Fengjing Industrial Development Zone, Jinshan District, Shanghai, and was established on January 7, 1998, with its listing date on August 17, 2007 [1] - The company's main business involves the research, development, production, sales, and after-sales service of screw compressors [1] - The revenue composition of the company is as follows: compressors (72.36%), vacuum products (18.57%), parts and maintenance (7.88%), and casting products (1.19%) [1] Shareholder Information - Among the top ten circulating shareholders of Hanbell Precise Machinery, a fund under Southern Fund holds a significant position [2] - The Southern CSI 1000 ETF (512100) increased its holdings by 368,800 shares in the second quarter, bringing its total to 1.963 million shares, which accounts for 0.37% of the circulating shares [2] - The estimated floating loss for the fund today is approximately 2.7678 million CNY [2] Fund Manager Performance - The fund manager of Southern CSI 1000 ETF (512100) is Cui Lei, who has been in the position for 6 years and 322 days [3] - The total asset size of the fund is 94.976 billion CNY, with the best fund return during the tenure being 137.06% and the worst being -15.93% [3]

Core Viewpoint - The company has begun small-scale supply of its vacuum products to certain domestic chip manufacturers, indicating a positive step towards market acceptance and potential growth in the semiconductor sector [1] Group 1: Company Developments - The company’s vacuum products have received recognition from some domestic chip manufacturers, leading to the initiation of small-batch supply [1] - The supply covers both the expansion of new production lines and the replacement of old vacuum pumps [1] - The company is conducting testing and verification in collaboration with new clients and new processes [1] Group 2: Market Potential - Currently, the usage of the company’s vacuum products in the semiconductor field is limited, contributing minimally to overall performance [1] - However, with the acceleration of domestic semiconductor industry development and market expansion, the future growth prospects for these products are very promising [1] - The vacuum products are expected to become a new driving force for the company's performance growth [1]

Group 1 - The recent investor research activity by Shanghai Hanzhong Precision Machinery Co., Ltd. involved 18 institutions, including Bosera Fund, providing insights into the company's operations [1] - The company reported a revenue of 1.489 billion yuan for the first half of 2025, a year-on-year decrease of 18.86%, and a net profit of 257 million yuan, down 42.90% [1] - Basic earnings per share were 0.4813 yuan, reflecting a decline of 42.90%, with a weighted average return on equity of 5.99%, down 5.63% year-on-year [1] Group 2 - The company's main business focuses on two core segments: compressors and vacuum pumps, with compressors further divided into refrigeration and air compression products [1] - In the refrigeration segment, the company offers a diverse product matrix, including commercial central air conditioning compressors and refrigeration compressors, with growth noted in compressors used for data center cooling [2] - In the air compression sector, the company is expanding its offerings in oil-free compressors, which have significant potential in industries requiring high air quality, such as food and biomedicine [2] Group 3 - The vacuum products are primarily used in the photovoltaic and semiconductor industries, with gradual expansion into lithium battery and pharmaceutical sectors [2] - The company has begun small-scale supply to domestic chip manufacturers, indicating potential growth as the semiconductor industry in China accelerates [2]

Group 1: Financial Performance - In the first half of 2025, the company reported a revenue of 1.489 billion yuan, a year-on-year decrease of 18.86% [2] - The net profit for the same period was 257 million yuan, down 42.90% compared to the previous year [2] - Basic earnings per share were 0.4813 yuan, reflecting a decline of 42.90% year-on-year [2] - The weighted average return on net assets was 5.99%, a decrease of 5.63% year-on-year [2] Group 2: Product Overview Refrigeration Products - The company offers a diverse range of refrigeration products, including commercial central air conditioning compressors, refrigeration compressors, and heat pump compressors [2] - The performance of screw and magnetic levitation centrifugal compressors used in data centers has shown growth in the first half of the year [2][3] - Taiwan's Dongyuan is a key partner, providing compressors that meet market demands [3] Air Compression Products - Air compressors serve as core equipment in various industries, including engineering machinery, pharmaceuticals, chemicals, electronics, and road maintenance [3] - The company is expanding into oil-free air compressor markets, focusing on applications in food, biomedicine, and electronics due to high air quality requirements [3] Vacuum Products - Vacuum products are primarily used in the photovoltaic and semiconductor industries, with plans to expand into lithium batteries, pharmaceuticals, and other sectors [3] - The company has begun small-scale supply to domestic chip manufacturers, with potential for growth as the semiconductor industry expands [3] Group 3: Investor Relations Activity - The investor relations activity took place from September 15 to September 19, 2025, at the company premises [2] - Participants included various investment firms and asset management companies, indicating strong interest from the investment community [2] - The company confirmed that no undisclosed significant information was shared during the activity [3]

Summary of Hanbell Precise Machinery Conference Call Company Overview - Hanbell Precise Machinery is a leading supplier of refrigeration compressors, holding approximately 50% market share in the domestic third-party screw compressor market and about 15% in centrifugal compressors [2][12]. Key Industry Insights - The global market for IDC (Internet Data Center) refrigeration compressors is estimated to reach approximately 10 billion RMB by 2025 [2][19]. - IDC demand is expected to drive growth in Hanbell's compressor business, with a projected revenue contribution of 1.19 million RMB in 2025, accounting for 4% of total revenue [2][20]. Core Points and Arguments 1. **Rating Upgrade**: The rating for Hanbell has been upgraded from Neutral to Buy, with a target price raised from 17.80 RMB to 34.80 RMB based on SOTP (Sum of the Parts) valuation method [1][4][53]. 2. **Earnings Recovery**: The company is expected to see a recovery in earnings driven by IDC compressor demand starting in 2026, with projected EPS CAGR of 17% from 2025 to 2029 [1][9][10]. 3. **Revenue Structure Shift**: The revenue contribution from IDC compressors is anticipated to increase from 4% in 2025 to 21% by 2029, indicating a structural shift in revenue sources [3][35]. 4. **Solar Business Impact**: The solar business is expected to decline significantly, with revenue projected to stabilize around 16% of total revenue by 2025 [10][35]. 5. **Market Positioning**: Hanbell's market share in the IDC compressor segment is expected to grow from 1% in 2025 to 10% by 2029, driven by tight HVAC industry capacity and potential partnerships with IDC solution providers [2][20][31]. Financial Projections - **Revenue Estimates**: Projected revenues for Hanbell are as follows (in million RMB): - 2025: 3,168 - 2026: 3,462 - 2027: 3,929 - 2028: 4,489 - 2029: 5,243 [5]. - **Profitability Metrics**: Expected net profit margins are projected to improve, with a forecasted net profit of 1,139 million RMB by 2029 [5][55]. Risks and Catalysts - **Catalysts**: Expansion of IDC market clients and acquisition of new orders are seen as key growth drivers [1][4]. - **Downside Risks**: Potential deterioration in the solar business and delays in IDC business progress could pose risks to the company's performance [1][4]. Additional Important Insights - **Strategic Partnerships**: Hanbell is positioned to benefit from strategic collaborations, such as the partnership with Hon Hai and TECO, which aims to capture broader infrastructure opportunities in the data center sector [29][30]. - **Market Dynamics**: The IDC market is expected to grow significantly, with a projected CAGR of 10-15% in installed capacity, further stimulating demand for refrigeration compressors [19][20]. Conclusion Hanbell Precise Machinery is poised for significant growth in the IDC compressor market, with a favorable shift in revenue structure and strategic partnerships enhancing its market position. The company's rating upgrade reflects confidence in its recovery and growth potential, despite risks associated with its solar business.

Market Overview - On September 18, the general equipment sector declined by 0.27%, with Ruina Intelligent leading the drop [1] - The Shanghai Composite Index closed at 3831.66, down 1.15%, while the Shenzhen Component Index closed at 13075.66, down 1.06% [1] Stock Performance - Notable gainers in the general equipment sector included: - Ruiqi Co., Ltd. (300126) with a closing price of 10.07, up 20.02% [1] - World (688028) at 47.60, up 13.79% [1] - Dayuan Quan Industry (603757) at 54.77, up 10.00% [1] - Conversely, Ruina Intelligent (301129) saw a significant decline of 6.16%, closing at 30.00 [2] - Other notable decliners included: - Coffee and Charcoal (688577) down 6.13% [2] - Hongsheng Co., Ltd. (603090) down 5.90% [2] Capital Flow - The general equipment sector experienced a net outflow of 1.395 billion yuan from institutional investors, while retail investors saw a net inflow of 2.65 billion yuan [2][3] - Specific stock capital flows indicated: - Chuanrun Co., Ltd. (002272) had a net inflow of 929 million yuan from institutional investors [3] - Dayuan Pump Industry (603757) saw a net inflow of 476 million yuan [3] - Ruina Intelligent (301129) faced a net outflow of 210 million yuan from institutional investors [3]