Core Viewpoint - Tiangong International is expected to see significant revenue and net profit growth in 2025, driven by its 3C titanium business and advancements in smelting technology [1][5]. Financial Performance - Revenue is projected to increase by 11.1% YoY to Rmb5.37 billion in 2025, while attributable net profit is anticipated to rise by 15.5% YoY to Rmb414 million [1]. - Revenue forecasts for 2025 and 2026 have been raised by 2.8% and 3.5% to Rmb5.37 billion and Rmb6.64 billion, respectively, with a new forecast for 2027 set at Rmb7.38 billion [5]. - Net profit forecasts for 2025 and 2026 have been increased by 13.3% and 29.6% to Rmb414 million and Rmb697 million, with a new forecast for 2027 at Rmb894 million [5]. Industry Trends - The 3C titanium business is expected to become a key earnings growth driver, with increasing demand for titanium alloys in consumer electronics, particularly after Apple's use of titanium in its iPhone 15 Pro series [1]. - Sales volume of high-end 3C titanium materials is projected to grow by 183% YoY in 2026 and 24% YoY in 2027 as demand from downstream consumer electronics sectors recovers [3]. Technological Advancements - The company has upgraded its smelting technology to produce various titanium alloy grades using green recycled materials, positioning itself as a leading supplier of 3C titanium materials in China [2]. - The establishment of titanium alloy powder metallurgy production lines ahead of competitors is expected to provide a long-term competitive advantage [3]. New Growth Drivers - The company's PM molds for integrated die-casting are anticipated to enter alternative-fuel vehicle supply chains valued at over Rmb1 trillion, potentially boosting sales volume [4]. - The company has developed a unique melting technology to control nitrogen content in high-nitrogen alloy materials, which is being utilized in high-end applications [5]. Valuation and Outlook - The company is expected to transition from a leading tool and die steel manufacturer to a high-end material supplier by 2026, leading to a valuation adjustment [6]. - The target price has been raised by 76% to HK$5.29, implying an 18.4x 2026e P/E, with a potential upside of 50% [6].
TIANGONG INTERNATIONAL(00826.HK)：POISED FOR DAVIS DOUBLE PLAY IN 2026 DRIVEN BY HIGH-END TITANIUM AND POWDER METALLURGY STEEL