HGTECH(SZ:000988) Guoxin Securities·2025-08-17 05:20Investment Rating - The investment rating for the company is "Outperform the Market" [4][6][26]. Core Views - The company reported a revenue of 7.629 billion yuan for the first half of 2025, representing a year-on-year growth of 44.66%, with a net profit attributable to shareholders of 911 million yuan, also up 44.87% year-on-year [1][9]. - The rapid growth in the company's connectivity business, which generated 3.744 billion yuan in revenue, saw a significant increase of 124% year-on-year, driven by the surge in computing power demand from domestic internet and equipment manufacturers [2][11]. - The company is actively expanding its international production capacity and is well-positioned to benefit from the increasing demand for high-speed optical modules and silicon photonics technology [3][19]. Summary by Sections Financial Performance - In Q2 2025, the company achieved a revenue of 4.274 billion yuan, marking a 41.04% increase year-on-year, and a net profit of 501 million yuan, which is a 49.62% increase year-on-year [1][9]. - The gross margin for the first half of 2025 was 20.24%, a slight decrease of 3.4 percentage points year-on-year, primarily due to changes in product mix [3][19]. Business Segments - The connectivity business is the largest segment, with a revenue of 3.744 billion yuan in H1 2025, driven by the successful delivery of 400G and 800G optical modules [2][11]. - The sensing business generated 2.154 billion yuan in revenue, a 16.8% increase, benefiting from the growth in the electric vehicle market [2][11]. - The intelligent manufacturing segment saw a slight decline in revenue, down 3% year-on-year, but orders from the commercial aviation sector increased by 220% [2][16]. Future Outlook - The company has adjusted its profit forecasts upwards, expecting net profits of 1.914 billion yuan, 2.435 billion yuan, and 2.964 billion yuan for 2025, 2026, and 2027 respectively [4][26]. - The current stock price corresponds to a price-to-earnings ratio (PE) of 27, 21, and 18 for the years 2025, 2026, and 2027 [4][26].