Core Viewpoint - The report by China Galaxy Securities on Hongfa Technology indicates a positive outlook for the company's performance, driven by improving demand across various sectors, leading to stable growth in revenue and profits. The company is rated as a "buy" for the first time. Financial Performance - In the first half of 2025, the company achieved revenue of 8.35 billion yuan, a year-on-year increase of 15.4%, and a net profit attributable to shareholders of 960 million yuan, up 14.2% year-on-year. The net profit excluding non-recurring items was 930 million yuan, reflecting a 17.9% increase year-on-year. The gross margin was 34.2%, down 0.54 percentage points year-on-year, while the net margin remained stable at 15.3% [2]. - In the second quarter of 2025, the company reported revenue of 4.36 billion yuan, with year-on-year and quarter-on-quarter increases of 15.5% and 9.6%, respectively. The net profit attributable to shareholders was 550 million yuan, showing a year-on-year increase of 13.3% and a quarter-on-quarter increase of 34.5%. The gross margin improved to 34.7%, remaining stable year-on-year and increasing by 0.9 percentage points quarter-on-quarter [2]. Market Demand and Growth Drivers - The overall demand in downstream sectors is improving, leading to a return to revenue growth for the company. In the consumer electronics sector, products like power relays and signal relays are benefiting from consumption promotion policies, resulting in rapid growth. The industrial equipment sector is experiencing a recovery in demand as major clients deplete their inventories, with expectations for continued recovery in the second half of the year [3]. - In the electric power sector, the demand for power relays is stable year-on-year, although it is expected to decline in the second half of 2025 due to a cyclical drop in smart meter installations in North America. The automotive sector is seeing rapid growth in low-voltage automotive relays, driven by domestic market expansion and increased market share of domestic brands [3]. Strategic Initiatives - The "75+ strategy" is being steadily advanced, with new growth areas being cultivated. In the first half of 2025, the low-voltage electrical market faced slight declines due to a downturn in the domestic construction distribution market and tariff impacts on overseas shipments. However, film capacitors grew by 31%, current sensors increased by 36%, and the ceramic DC fast fuse HPE509 received UL certification, with efforts to onboard benchmark clients and new customers [3]. Investment Recommendations - As a leading global player in the relay industry, the company has significant strategic advantages, with promising growth in high-voltage DC relays and strong cash flow from power relays. The company is also actively exploring new product categories and markets, indicating potential for future growth. Revenue projections for 2025-2027 are 16.2 billion, 18.4 billion, and 19.9 billion yuan, with net profits of 1.8 billion, 2.1 billion, and 2.7 billion yuan, respectively. The expected EPS for these years is 1.3, 1.4, and 1.8 yuan per share, corresponding to PE ratios of 19x, 16x, and 13x [4].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's performance in the first half of 2025 met expectations, with significant growth in high-voltage direct current and industrial control sectors [8] - Revenue for the first half of 2025 reached 8.347 billion yuan, a year-on-year increase of 15.43%, while net profit attributable to shareholders was 0.964 billion yuan, up 14.19% year-on-year [8] - The company is expected to maintain a revenue growth rate of over 40% in the high-voltage direct current relay segment due to increased sales from domestic and international clients [8] - The industrial relay segment is also anticipated to see growth as overseas clients begin to replenish inventory, particularly in Europe [8] - The company is experiencing strong demand in the new energy, automotive, and signal relay markets, with expectations of continued growth in these areas [8] - The company's strategic focus on high-quality development and diversification is expected to drive long-term growth [8] - The financial outlook remains positive, with projected net profits of 1.985 billion yuan, 2.316 billion yuan, and 2.689 billion yuan for 2025, 2026, and 2027 respectively, reflecting year-on-year growth rates of 21.72%, 16.67%, and 16.12% [8] Financial Summary - Total revenue is projected to reach 16.679 billion yuan in 2025, with a year-on-year growth of 18.27% [1] - The latest diluted EPS is expected to be 1.36 yuan per share in 2025, with a corresponding P/E ratio of 17.36 [1] - The company's gross margin is expected to remain stable around 36.27% in 2025, with a net profit margin of 11.90% [9]

股票代码：600885 公司简称：宏发股份 公告编号：临 2025-035 债券代码：110082 债券简称：宏发转债 一、持续聚焦主业，全面实施'75+'战略，努力打造强大实力 报告期内，公司坚持宏发经营特色，以提升市场份额为中心，把握新能源及 汽车产业发展机遇，在宏观经济不确定性高，材料价格快速上涨，部分行业竞争 加剧的外部环境下，主要经营指标继续实现良好增长。报告期内，公司实现营业 收入 83.47亿元，同比增长 15.43 %；实现归属于上市公司股东的净利润 9.64 亿元，同比增长 14.19%；实现归属于上市公司股东的扣除非经常性损益的净利 润 9.27 亿元，同比增长 17.85%；公司经营效率指标人均销售回款65.4万元， 同比增长8.9%。 报告期内，公司主营继电器产品整体取得良好增长，市场份额稳固，各个下 游未见明显短板。具体表现在： 整体较上年同期实现良好增长，其中与家电领域相关业务中，公司与头部品牌合 作关系不断巩固，发货实现稳定增长；报告期内，信号继电器主要应用领域的市 场需求均有所提升，同比实现快速增长，预计消费电子相关下游全年维持稳健增 长态势。 场需求景气度呈现持续恢复状态。报 ...

Investment Rating - The report maintains a "Buy" rating for the company [8] Core Views - The company reported a strong Q1 performance with revenue of 3.983 billion RMB, a year-on-year increase of 15.35% and a quarter-on-quarter increase of 23.17%. The net profit attributable to shareholders was 411 million RMB, up 15.47% year-on-year and 13.70% quarter-on-quarter [1][2] - The decline in gross margin was attributed to rising raw material prices, but the report remains optimistic about the company's new business ventures and market expansion, indicating a new growth cycle [1][2] - The company is a leader in the global relay industry, focusing on both consolidating its position in the existing market and expanding into new product categories [3] - The company emphasizes quality control and has improved its customer complaint rate to below 0.05 ppm, while also expanding its customer base and global presence [4] Summary by Sections Financial Performance - Q1 revenue was 3.983 billion RMB, with a gross margin of 33.77% and a net profit margin of 13.68%. The gross margin saw a slight decline of 1.18% year-on-year due to increased raw material costs [2] - The company expects continued improvement in profitability as it expands its operational scale and optimizes its product structure [2] Strategic Initiatives - The company has implemented a "75+" strategy, focusing on developing new products and expanding its market share in the power protection sector [3] - In 2024, the company plans to launch 405 new products, with nearly 47% of these being in the "5+" category, indicating a strong commitment to innovation [3] Global Expansion - The company has made significant strides in its global strategy, including the opening of its first self-built factory in Germany, which will enhance its ability to serve local markets [4] - The partnership with Midea Group is expected to further broaden the company's customer reach [4] Profit Forecast and Valuation - The report forecasts net profits for 2025, 2026, and 2027 to be 1.868 billion RMB, 2.152 billion RMB, and 2.497 billion RMB respectively, with corresponding EPS of 1.79 RMB, 2.06 RMB, and 2.39 RMB [5][7] - The target price is set at 43.99 RMB, based on a PE ratio of 24.55 for 2025 [5][9]

Core Viewpoint - The company, Hongfa Technology (宏发股份), has solidified its leading position in the relay industry, achieving stable growth in performance with a revenue of 14.102 billion yuan and a net profit of 1.631 billion yuan in 2024, marking a year-on-year increase of 9.07% and 17.09% respectively [1][2]. Group 1: Financial Performance - In 2024, the company reported a revenue of 14.102 billion yuan, a 9.07% increase year-on-year, and a net profit of 1.631 billion yuan, reflecting a 17.09% growth [1][2]. - The company achieved a per capita return of 120.8 thousand yuan, which is a 9% increase compared to the previous year [2]. - The proposed cash dividend is 0.515 yuan per share, totaling 537 million yuan, which accounts for 32.92% of the annual net profit [4][5]. Group 2: Market Position and Strategy - The company has increased its overall market share in the relay industry by 1.7 percentage points, maintaining its position as the global leader [1][2]. - The high-voltage direct current relay market share reached 40%, solidifying its top position [1]. - The company is implementing the "75+" strategy to enhance its core competitiveness and achieve sustainable development [2][5]. Group 3: Product Development - The company has made significant advancements in new product categories, with connector product shipments increasing by 28% and capacitor product shipments growing by 14% [3]. - The company completed the development of over 30 new fuse products, covering major applications in the new energy market, with total shipments reaching 3.55 million yuan [3]. - Research and development expenses for 2024 amounted to 785 million yuan, a 16.57% increase, representing 5.57% of revenue [5]. Group 4: Investor Returns - The company has maintained a consistent cash dividend policy, with a total of 2.45 billion yuan distributed over the past ten years, representing 30.22% of cumulative net profit [5]. - Future plans include a comprehensive approach to balance company growth and shareholder returns, ensuring a stable and sustainable return mechanism [6].