Investment Rating - The report maintains a "Strong Buy" rating for the company [3] Core Views - The company has experienced rapid growth in its high-temperature alloy business, with an increasing proportion of overseas revenue [6] - In H1 2025, the company achieved operating revenue of 829 million yuan, a year-on-year increase of 15.72%, and a net profit attributable to shareholders of 53.04 million yuan, also up 15.53% year-on-year [6][7] - The company is focusing on international expansion, with plans to establish production bases in Singapore and Malaysia, and has signed long-term agreements with several overseas clients [6] Financial Performance - The company reported a Q2 revenue of 485 million yuan, reflecting a year-on-year growth of 21.30% and a quarter-on-quarter increase of 40.97% [6] - The revenue from high-temperature corrosion-resistant alloys reached 603 million yuan, with a year-on-year growth of 17.98% [6] - The gross profit margin for domestic revenue was 15.34%, while for overseas revenue it was 17.22% [6] Profit Forecast - The company forecasts net profits attributable to shareholders of 99 million yuan, 129 million yuan, and 162 million yuan for the years 2025, 2026, and 2027, respectively [6][7] - Corresponding PE ratios are projected to be 54, 41, and 33 for the same years [6][7] Market Position - The company is well-positioned to benefit from the increasing global demand for high-temperature alloys, particularly in the aerospace and gas turbine sectors [6] - The report highlights the ongoing shift of supply chains towards China, which may present significant opportunities for the company [6]

Group 1: Global Gas Turbine and Aerospace Engine Demand - The demand for gas turbines is expected to surge, with GE Vernova projecting a backlog of 60GW by the end of 2025, with orders signed until 2028 [3][4] - In Q1 2025, GE Vernova added 7.1GW in new gas turbine orders, a 44.9% year-on-year increase, primarily from heavy-duty gas turbine orders [3][4] - The aerospace engine market is experiencing robust demand, with Boeing reporting a net addition of 300 aircraft orders in May 2025, raising its backlog to 5943 aircraft [5][6] Group 2: High-Temperature Alloy and Chromium Salt Industry - The growth in gas turbine and aerospace engine demand is driving the need for high-temperature alloys, with domestic manufacturers poised to benefit from supply chain constraints [9][13] - Companies like Zhenhua Co. and Sry New Materials are expanding their production capabilities and reporting significant revenue growth from overseas markets [9][10] - The high-temperature alloy sector is rated as "recommended" due to the increasing demand for core components amid supply chain shifts towards China [13] Group 3: Coal Industry Dynamics - In May 2025, China's industrial raw coal production reached 400 million tons, a year-on-year increase of 4.2%, indicating a recovery in the coal supply [15][18] - The industrial electricity generation in May 2025 showed a positive shift, with coal-fired power generation increasing by 1.2% year-on-year, reversing a previous decline [19][22] - The coal market is witnessing a gradual improvement in supply-demand dynamics, with coal prices stabilizing and inventory levels decreasing [21][23] Group 4: Real Estate and Land Market Factors - The land market's performance is influenced by five key factors, including financing environment, new housing market stability, inventory reduction, sales model changes, and land supply rules [24][27] - The first quarter of 2025 showed a significant recovery in the real estate market, with new housing transactions positively impacting land market activity [29][30] - The land market is entering a "dual concentration" phase, with significant activity concentrated in major cities and among top real estate firms [25][26] Group 5: Company-Specific Developments - Xiaogoods City (600415.SH) is leveraging its position in Yiwu to enhance its global trade capabilities, with a projected revenue growth of 25% from 2025 to 2027 [36][39] - Huayi Group is diversifying its operations across five core business areas, reporting a revenue increase of 9.3% in 2024 [40]