Core Viewpoint - The company is expected to complete its overseas capacity relocation by the end of 2025, which may support accelerated growth in 2026 due to cyclical recovery in the industry, despite potential impacts from U.S. tariffs [1][2]. Group 1: Financial Performance - In H1 2025, the company's revenue reached $7.83 billion, a year-on-year increase of 7.1%, aligning with expectations [2]. - The net profit attributable to the parent company for H1 2025 was $630 million, reflecting a year-on-year growth of 14.2%, which also met expectations [2]. - The gross margin improved by 0.3 percentage points to 40.3%, driven by enhanced DIY profit margins and operational efficiency [2]. Group 2: Brand Performance - Milwaukee brand experienced a year-on-year growth of 11.9%, with OPE and PPE categories growing faster than the product mix average [2]. - RYOBI brand saw a year-on-year growth of 8.7%, with double-digit growth in electric tools and single-digit growth in OPE [2]. Group 3: Future Outlook - The company anticipates that by the end of 2025, overseas capacity will fully cover U.S. demand, with a cautious outlook for H2 2025 due to tariff-related inventory adjustments [3]. - The market expects a recovery in the tools industry driven by a potential interest rate cut and a replacement cycle in 2026, with Milwaukee expected to return to double-digit growth [3].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][5] Core Views - The company is expected to achieve accelerated performance growth in 2026 due to the completion of overseas capacity relocation by the end of 2025, which will fully cover shipments to the U.S. market [5][7] - The company has adjusted its net profit forecasts for 2025-2027 from $1.35 billion, $1.63 billion, and $1.94 billion to $1.29 billion, $1.56 billion, and $1.84 billion, reflecting year-on-year growth rates of 14.7%, 21.4%, and 17.9% respectively [5][6] - The company's core brands, Milwaukee and RYOBI, continue to show strong growth, with Milwaukee achieving a year-on-year increase of 11.9% and RYOBI 8.7% in the first half of 2025 [6][7] Financial Summary and Valuation Metrics - Revenue for 2025 is projected at $15.52 billion, with a year-on-year growth of 6.1% [8] - Net profit for 2025 is estimated at $1.29 billion, reflecting a year-on-year increase of 14.7% [8] - The gross margin is expected to improve to 40.6% in 2025, while the net margin is projected at 8.3% [8] - The diluted EPS is forecasted to be $0.7 for 2025, with a P/E ratio of 17.3 times [8]

Sales Performance - Global PC device sales in Q2 2025 increased by 6.5% year-on-year, reaching approximately 68 million units[5] - U.S. PC sales were about 19 million units, showing a slight growth of 0.1% year-on-year[5] - Apple performed best in Q2 with global shipments of approximately 6.2 million units, a year-on-year increase of 21.4%[5] - In the U.S., Apple sold about 2.8 million units, reflecting a year-on-year growth of 22.2%[5] Market Trends - Apple's Mac series outpaced the overall growth rate of laptops, with global and U.S. sales growth maintaining around 20% even when excluding U.S. sales[11] - Factors contributing to Apple's strong performance include an upcoming replacement cycle for PCs purchased during remote work/study periods and the 2025 student discount policy for MacBooks[12] Tariff Impact - The U.S. tariff policy could impose a 25% tariff on products from Japan and South Korea, with Taiwan's tariff situation remaining uncertain[3] - If tariffs are implemented, the cost of Mac series products could increase by at least 15% compared to the original 10% tariff[13] Risks - Potential risks include challenges in chip manufacturing processes and yield rates, uncertainty in tariff policies, and lower-than-expected PC device sales[4]

Core Insights - The African smartphone market is projected to grow by 9% year-on-year in 2024, driven by inflation easing, manufacturers expanding into emerging markets, and a replacement cycle following the peak shipments in 2021 [1][2] - Despite the growth potential, the market will face macroeconomic pressures in 2025, including high inflation and currency depreciation risks, with a forecasted modest growth of 2% [1][2] Market Performance by Country - Nigeria's smartphone market saw a 1% decline in Q4 2024, with a market share of 14%, as rising living costs offset holiday demand [2] - Egypt experienced a 12% growth in Q4 2024, attributed to a stable fiscal environment, but will impose a 38.5% import tax on smartphones starting January 2025 [2] - Algeria's smartphone market grew by 11% in Q4 2024 due to post-2020 economic reforms, while Morocco faced a 34% decline due to increased customs duties [2] - Kenya's market declined by 4% in Q4 2024 due to new regulations increasing operational costs for manufacturers [2] - South Africa's market saw a slight decline of 1% in Q4 2024, showing signs of recovery from previous declines [2] Company Performance - Transsion maintained a leading market share of 49% in Q4 2024, with a modest growth of 1% [4] - Samsung's shipments decreased by 17%, but its average selling price rose by 9% to $240, focusing on the mid-to-high-end market [5] - Xiaomi achieved a 22% growth, driven by market expansion in West African countries and promotional events in Egypt and Nigeria [5] - Realme experienced a significant 70% growth in Q4 2024, benefiting from expansion in North and East Africa [5] - OPPO increased investments in local production in Egypt and Turkey, indicating a long-term commitment to the African market [5] Future Outlook - The African smartphone market is expected to achieve a 2% growth in 2025, despite economic challenges, with inflation projected to decrease from 18.6% in 2024 to 12.6% [6] - The focus will remain on affordable products, with manufacturers enhancing price competitiveness and financing options to improve device affordability [6] - The complex business environment, including currency fluctuations and tax policy changes, poses significant operational challenges for companies [6]