Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company reported a revenue of 8.188 billion RMB for H1 2025, representing a year-on-year growth of 49.04%, with a net profit attributable to shareholders of 745 million RMB, up 63.95% year-on-year [2] - The overseas building materials segment benefited from optimized layout and pricing strategies, achieving a revenue of 3.771 billion RMB in H1 2025, a significant increase of 90.08% [3] - The lithium carbonate segment saw a sales volume of approximately 20,600 tons in H1 2025, with a contribution to net profit of 168 million RMB, reflecting a positive trend due to cost optimization [4] Summary by Sections Performance Review - In H1 2025, the company achieved a revenue of 8.188 billion RMB, with a net profit of 745 million RMB and a non-recurring net profit of 700 million RMB, marking increases of 49.04%, 63.95%, and 75.06% respectively [2] Operational Analysis - Revenue structure for H1 2025: Overseas building materials (46%), building materials machinery (31%), lithium battery materials (11%), and new energy equipment (9%), with overseas revenue accounting for over 65% [3] - The overseas building materials segment's revenue reached 3.771 billion RMB, with a gross margin of 36.80%, an increase of 5.85 percentage points year-on-year [3] - The ceramics machinery segment experienced a revenue decline of 5.01% to 2.570 billion RMB due to industry demand slowdown [4] - The lithium carbonate segment's average price was 60,300 RMB/ton, down 2,270 RMB/ton year-on-year, but still contributed positively to profits due to cost reductions [4] Profit Forecast and Valuation - The company is expected to achieve net profits of 1.544 billion RMB, 1.807 billion RMB, and 1.962 billion RMB for 2025, 2026, and 2027 respectively, with corresponding PE ratios of 14.7, 12.6, and 11.6 [5]

Core Viewpoint - Keda Manufacturing reported significant growth in both revenue and profit for the first half of 2025, driven by strong performance in overseas markets and the building materials machinery sector [1][2]. Group 1: Financial Performance - In the first half of 2025, Keda Manufacturing achieved revenue of 8.188 billion yuan, a year-on-year increase of 49.04%, marking a historical high for the same period [1]. - The net profit attributable to shareholders reached 745 million yuan, reflecting a year-on-year growth of 63.95%, while the net profit after deducting non-recurring gains and losses was 700 million yuan, up 75.06% [1]. - The overseas building materials business saw a revenue increase of approximately 90% to 3.771 billion yuan, with an improvement in gross margin by about 6 percentage points [2]. Group 2: Business Segments - The building materials machinery segment maintained stable operational quality, generating revenue of 2.570 billion yuan with a gross margin of 26.23% [1]. - Keda Manufacturing is actively expanding its global ceramic machinery market, establishing subsidiaries in Brazil, Vietnam, and Egypt, enhancing its global service network [1]. - The company launched the BOZUYUK factory's parts and consumables workshop in Turkey, with plans for the KAMI ink factory to commence production in the second half of the year [1]. Group 3: Production and Capacity - The overseas building materials business achieved a ceramic tile production of over 98 million square meters, glass production exceeding 170,000 tons, and sanitary ware production of over 1.4 million pieces [2]. - The production efficiency and output have improved due to capacity construction and technological upgrades, with projects in Kenya and Côte d'Ivoire commencing production in June [2]. Group 4: Investment and Subsidiaries - Keda Manufacturing's associate company, Lanke Lithium, produced 20,000 tons of lithium carbonate and achieved sales of 20,600 tons, contributing 168 million yuan to Keda's net profit [2]. - Despite a downturn in the lithium carbonate market, Lanke Lithium maintained a net profit margin of 31%, showcasing its cost-effective lithium extraction technology [2].

Group 1 - The company has approved a total guarantee limit of up to 2.7 billion yuan for its subsidiaries, including specific amounts for subsidiaries Koyou International and Tefuhome [1][2] - The guarantees are intended to support the financing needs of subsidiaries engaged in international trade and strategic business expansion [2][3] - As of August 14, 2025, the total external guarantees provided by the company and its subsidiaries amount to 11.421 billion yuan, with no overdue guarantees reported [3] Group 2 - The credit status of the guaranteed subsidiaries is good, and they are not classified as dishonest executors, indicating no significant issues affecting their debt repayment capabilities [2] - The necessity of the guarantees is justified by the ongoing financing demands due to long payment terms in international trade and high asset-liability ratios from strategic expansions [2][3] - The actual guarantee balance as of July 31, 2025, is 4.704 billion yuan, representing 40.98% of the company's audited net assets for the fiscal year 2024 [3]

Market Performance - The market experienced narrow fluctuations on August 8, with all three major indices slightly declining. The Shanghai Composite Index fell by 0.12%, the Shenzhen Component Index decreased by 0.26%, and the ChiNext Index dropped by 0.38% [1] - Despite the overall market decline, several ETFs related to construction materials, photovoltaic, and infrastructure sectors saw gains exceeding 2% [1] ETF Performance - The following ETFs showed notable performance: - E Fund Construction Materials ETF increased by 2.18%, closing at 0.702 [2] - Leading Photovoltaic ETF rose by 2.05%, with a price of 0.497 [2] - Infrastructure ETF also gained 2.05%, closing at 1.146 [2] - Infrastructure 50 ETF increased by 2.04%, closing at 1.103 [2] Industry Outlook - Experts predict that as Chinese engineering machinery companies continue to globalize, their competitiveness in overseas markets is expected to enhance, leading to an increase in market share [2] - The domestic engineering machinery market is anticipated to benefit from the "two new" policy, which is expected to drive ongoing demand for equipment upgrades. Additionally, growth in water conservancy and municipal sectors is likely to support a continued recovery in domestic engineering machinery demand [2]

Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Views - The company achieved a revenue of 3.8 billion yuan in Q1 2025, representing a year-on-year growth of 47%. The net profit attributable to shareholders was approximately 350 million yuan, up 11% year-on-year, while the net profit excluding non-recurring items was about 320 million yuan, reflecting a 17% increase [2][4]. Summary by Sections Business Performance - The company experienced a significant operational turning point, with Q1 revenue growth primarily driven by high increases in overseas building materials revenue, while machinery equipment revenue remained relatively stable. The gross margin for Q1 was approximately 29.7%, an increase of 2.8 percentage points year-on-year, mainly due to significant improvements in the gross margin of overseas building materials [9]. - The company’s net profit for Q1 was 350 million yuan, an 11% increase year-on-year. After adjusting for exchange losses, the net profit would be 410 million yuan, representing a growth of over 30% [9]. Overseas Building Materials - The overseas building materials segment exceeded expectations, with revenue growth driven by increases in both volume and price of tiles, as well as the expansion of glass business. The company holds a leading position in the African building materials market, benefiting from production, distribution, and brand advantages [9]. - The company’s previous large-scale capital expenditures have laid the foundation for capacity increases over the next two years, with new projects expected to contribute to revenue growth [9]. Building Machinery - The building machinery segment saw a decline in revenue due to cyclical industry demand slowdown and adjustments in client investment rhythms. However, the company is positioned as a global duopoly in ceramic machinery, with expected stable revenue in 2025 [9]. Investment in Lithium Industry - The investment in Blueco Lithium maintained stable returns, with Q1 production of lithium carbonate at approximately 8,500 tons and sales of about 8,100 tons. Despite a 33% year-on-year decline in average price, the segment still achieved significant profitability [9]. Market Position and Growth Potential - The company is recognized as a rare leading player in the African market, combining low valuation with certain growth prospects. The company is expected to benefit from urbanization trends in Africa, with projected net profits of approximately 1.58 billion yuan and 1.73 billion yuan for 2025 and 2026, respectively, corresponding to valuations of 10 and 9 times [9].

Core Viewpoint - The company has shown significant revenue growth in Q1 2025, driven by overseas building materials and continuous expansion in parts and general machinery businesses, despite facing increased foreign exchange losses impacting profit growth [1][2]. Group 1: Financial Performance - In Q1 2025, the company achieved operating revenue of 3.767 billion yuan, a year-on-year increase of 47.05% [1]. - The net profit attributable to shareholders was 347 million yuan, up 11.38% year-on-year, while the net profit excluding non-recurring items was 323 million yuan, reflecting a 17.13% increase [1]. - After excluding foreign exchange impacts, the net profit attributable to shareholders would be 412 million yuan, representing a year-on-year growth of 32.3% [1]. - The company's gross margin improved to 29.68%, an increase of 2.83 percentage points year-on-year, while the net margin decreased to 13.84%, down 2.08 percentage points year-on-year due to increased foreign exchange losses [3]. Group 2: Business Segments - The building materials machinery segment experienced a slight decline in performance due to cyclical industry demand and adjustments in client investment schedules, but the company is optimizing its overseas base layout with new subsidiaries in Brazil and plans for Vietnam [2]. - The overseas building materials sales benefited from the expansion of glass business and optimized pricing strategies for ceramic products, leading to significant revenue growth and improved gross margins, although net margins were affected by foreign exchange losses [2]. - In Q1 2025, the company produced 8,500 tons of lithium carbonate and sold 8,100 tons, generating revenue of 528 million yuan and a net profit of 207 million yuan from the lithium segment, contributing 90 million yuan to the overall net profit, which is a 10.4% decrease year-on-year [2]. Group 3: Future Outlook - The company aims for annualized revenue and net profit growth targets of 20% and 20.8% for 2025-2027, respectively [1]. - The new production capacity in Africa, particularly the ceramic project in Côte d'Ivoire expected to be operational in 2025, and the glass project in Peru anticipated for 2026, are expected to further support revenue growth [2].

Core Viewpoint - The company aims to enhance its governance structure and operational efficiency while focusing on sustainable development and global expansion in the ceramic machinery and building materials sectors [5][6][8]. Meeting Agenda - The annual shareholder meeting is scheduled for April 16, 2025, at the company's headquarters in Guangdong Province [1][2]. Board of Directors and Shareholder Meeting Activities - The board has adhered to relevant laws and regulations, ensuring effective governance and compliance [5][6]. - A total of 4 regular reports and 95 temporary reports were disclosed during the reporting period, demonstrating a commitment to transparency [5][6]. Company Performance Overview - The company achieved a revenue of 12.6 billion yuan in 2024, representing a year-on-year increase of 29.96%, with over 63% of revenue coming from overseas operations [6][8]. - Net profit attributable to shareholders was 1.006 billion yuan, impacted by a significant decrease in performance from the associated company, Blue Lithium [6][11]. Strategic Initiatives - The company is advancing its global strategy by enhancing local service capabilities and expanding its market presence in regions such as Southeast Asia, the Middle East, and Europe [6][7]. - The "Big Building Materials" strategy is being implemented to capitalize on urbanization trends in Africa, with multiple projects launched across the continent [8][9]. Challenges and Responses - The company faces profitability pressures in its overseas building materials business due to competitive market conditions and pricing strategies [9][10]. - To address cost pressures and enhance efficiency, the company is focusing on optimizing production capacity and reducing operational costs [10][11]. Future Development Plans - The company aims to solidify its position as a global ceramic production service provider and a large-scale building materials group, with a focus on high-quality development [11][12]. - Plans include expanding product offerings and enhancing technological capabilities to meet diverse customer needs [12][13].