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].
LK TECH(00558.HK)：TPI MAGNESIUM ALLOY FOR GIGAPRESS SCALE DIE-CASTING MACHINES TO CREATE A SECONDARY GROWTH CURVE