Core Viewpoint - CICC has lowered the EPS forecast for QuanFeng Holdings (02285) for 2025 by 9.5% to $0.28, while introducing a 2026 EPS of $0.30, maintaining a target price of HKD 27, which implies a 20% upside potential [1] Group 1: Financial Performance - In 1H25, the company reported revenue of $912 million, an increase of 11.9% year-on-year, and a net profit attributable to shareholders of $95 million, up 54.8% year-on-year, meeting expectations [1] - The company's OPE business generated revenue of $602 million in 1H25, a year-on-year growth of 22.8%, primarily driven by revenue growth from EGO products [2] - The overall gross margin increased by 0.4 percentage points to 33.3% in 1H25, attributed to a higher proportion of high-margin EGO products, lower raw material costs, and increased sales prices [2] Group 2: Profitability Metrics - The company's expense ratios remained stable, with a slight increase in selling and financial expense ratios, while the R&D expense ratio decreased [3] - The net profit margin and adjusted net profit margin both increased by 2.9 percentage points to 10.4% in 1H25 [3] - Excluding a one-time gain from the divestiture of QuanFeng Automotive, the net profit growth for the first half of 2025 would be 23.4% year-on-year [3] Group 3: Market Position and Product Development - EGO brand market share continues to grow, with over 100 new products launched in 1H25, including top-selling categories in North America [4] - The company has solidified its position as the largest single battery OPE platform globally with accelerated sales of its battery packs [4] Group 4: Industry Outlook - The company is closely monitoring the impact of potential interest rate cuts in the U.S. on lithium battery OPE consumer demand, with a 92% probability of rate cuts indicated by CME futures [5] - The company expects that the electric penetration rate of lithium battery OPE will likely outperform the industry, driven by product advantages and increasing market share [5]

Core Viewpoint - CICC has lowered the EPS forecast for QuanFeng Holdings (02285) for 2025 by 9.5% to $0.28, while introducing a 2026 EPS of $0.30, maintaining a target price of HKD 27, indicating a 20% upside potential [1] Group 1: Financial Performance - In 1H25, the company reported revenue of $912 million, an increase of 11.9% year-on-year, and a net profit attributable to shareholders of $95 million, up 54.8% year-on-year, aligning with CICC's expectations [1] - The company's OPE business achieved revenue of $602 million in 1H25, a year-on-year growth of 22.8%, primarily driven by revenue growth from EGO products [2] - The overall gross margin increased by 0.4 percentage points to 33.3% in 1H25, attributed to a higher proportion of high-margin EGO products, a decrease in raw material costs, and an increase in sales prices [2] Group 2: Profitability Metrics - The company's expense ratios remained stable, with a slight increase in the selling and financial expense ratios to 14.2% and 0.3%, respectively, while the R&D expense ratio decreased to 4.4% [3] - The net profit margin attributable to shareholders increased by 2.9 percentage points to 10.4% in 1H25, with a 23.4% year-on-year growth in net profit when excluding one-time gains from divesting the automotive stake [3] Group 3: Market Position and Product Development - EGO brand market share continues to grow, with over 100 new products launched in 1H25, including high-demand items like push mowers and snow throwers, solidifying its position in the North American lithium battery OPE market [4] - The company has established itself as the largest single battery OPE platform globally with its 56V battery platform, showing strong sales momentum [4] Group 4: Industry Outlook - The company is closely monitoring the impact of potential interest rate cuts in the U.S. on lithium battery OPE consumer demand, with a 92% probability of rate cuts indicated by CME futures [5] - The company is expected to outperform the industry due to increased electrification penetration in the OPE sector, leveraging its product advantages to enhance market share [5]

泉峰控股发布中报，25H1 实现营收 9.12 亿美元（yoy+11.9%），期内利润 0.95 亿美元（yoy+54.6%），经调整纯利 0.76 亿美元（yoy+23.4%），符 合此前业绩预告（期内利润 0.9-1 亿美元，经调整纯利 0.7-0.8 亿美元）。 上半年收入表现亮眼，主要受益于 OPE 业务终端销售表现较好，以及客户 主动备库；利润表现优于收入，主要受益于 EGO 等自主品牌快速成长带来 业务结构优化，处置泉峰汽车带来一次性收益以及汇兑收益增加等。展望后 续，我们看好锂电 OPE 海外长期渗透率提升空间，公司品牌及产品生态优 势突出，同时加速越南产能布局，长期成长逻辑顺畅，维持"买入"评级。 上半年 OPE 收入同比+22.8%，EGO 品牌持续成长，北美表现优异 证券研究报告 1）分业务看：上半年 OPE 实现营收 6.02 亿美元（yoy+22.8%），主要受 益于 EGO 品牌快速成长，市场份额持续提升，25H1 公司自主品牌 OBM 业 务收入同比+16.2%，占总收入的 77.5%，上半年推出约 100 款新品，锂电 产品占 90%以上，锂电化进程持续推进。上半年电动工具收入 ...

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 27.06 [6]. Core Views - The company is expected to achieve a net profit of USD 90 million to 100 million for the first half of 2025, representing a year-on-year increase of 46% to 62%. Adjusted net profit, excluding non-recurring gains from the disposal of automotive equity, is projected to be USD 70 million to 80 million, reflecting a year-on-year growth of 14% to 30% [1][5]. - The company's strong profit performance is attributed to the steady growth of its proprietary brand business represented by EGO, divestiture of non-core assets, and favorable currency fluctuations. Despite external tariff disruptions, the company's operational resilience remains prominent [1][2]. Summary by Sections Main Business Operations - The company has shown resilience in operations despite concerns over US-China trade tariffs, with North American revenue expected to reach USD 1.293 billion in 2024, accounting for 72.9% of total revenue. New tariffs of 20% on fentanyl and 10% on reciprocal tariffs have been introduced since 2025. To mitigate tariff risks, the company has implemented proactive measures such as pre-stocking in overseas warehouses, adaptive pricing strategies, and accelerated overseas capacity expansion [2]. Asset Divestiture - The company signed an agreement to sell its automotive equity for RMB 570 million, which is expected to generate an investment gain of USD 20 million. The divestiture will eliminate the negative impact of equity losses from joint ventures, which amounted to USD 18.3 million and USD 17.3 million in 2023 and 2024, respectively, thereby enhancing the profitability on the balance sheet [3]. Long-term Outlook - As a leading global brand in electric tools and lithium battery outdoor power equipment (OPE), the company’s EGO brand has shown strong growth momentum, with a projected 2 percentage point increase in market share in the US for 2024. The trend towards lithium OPE is clear, driven by improved product performance and reduced total cost of ownership. The company is well-positioned to benefit from this trend, especially in the developed markets of North America and Europe, where OPE consumption is considered essential [4]. Profit Forecast and Valuation - The report maintains profit forecasts, projecting net profits of USD 148 million, USD 174 million, and USD 201 million for 2025 to 2027, respectively, with corresponding EPS of USD 0.29, USD 0.34, and USD 0.39. The target price is set at 12 times the expected PE for 2025, resulting in a target price of HKD 27.06 [5][9].