ZHEJIANG DINGLI(SH:603338) Changjiang Securities·2025-09-05 02:13Investment Rating - The investment rating for the company is "Buy" and it is maintained [8]. Core Views - In the first half of 2025, the company achieved revenue of 4.336 billion yuan, a year-on-year increase of 12.35%, and a net profit attributable to shareholders of 1.052 billion yuan, up 27.63% year-on-year. The net profit excluding non-recurring items was 1.050 billion yuan, reflecting a year-on-year increase of 21.72% [2][6]. - The company's overseas revenue continued to grow rapidly, with a year-on-year increase of 21%, accounting for 85% of total revenue. Domestic revenue declined due to industry adjustments, but the company's performance was better than the industry average [2][12]. - The company is expected to benefit from a recovery in demand in the European and American markets, with pricing adjustments planned in North America to counteract tariff impacts, which may lead to an increase in both volume and profit [2][12]. Summary by Sections Financial Performance - In Q2 2025, the company reported revenue of 2.438 billion yuan, a year-on-year increase of 1.27%, and a net profit of 623 million yuan, up 19.40% year-on-year. The net profit excluding non-recurring items was 619 million yuan, reflecting a year-on-year increase of 27.56% [6]. - The comprehensive gross margin in Q2 2025 was 32.0%, a decrease of 8.6 percentage points from Q1, primarily due to product mix effects and potential tariff impacts [12]. Market Outlook - The U.S. market is nearing a cyclical bottom, with potential demand recovery driven by the Inflation Reduction Act and possible interest rate cuts. The European market is also showing signs of recovery, with aging equipment creating a need for replacement [12]. - The company is expected to achieve net profits of 1.921 billion yuan and 2.459 billion yuan in 2025 and 2026, respectively, corresponding to price-to-earnings ratios of 14 times and 11 times [12].