Core Viewpoint - The development of high-quality manufacturing in China relies on domestic high-end industrial mother machines, with Kede CNC Co., Ltd. emerging as a key player in this transformation through independent innovation and technology breakthroughs [1][2]. Group 1: Technological Breakthroughs - Kede CNC has achieved a full-chain technological breakthrough from the "brain" to the "body" of industrial mother machines, with its GNC60 open high-end CNC system being the only one in China to have all source code independently mastered [2]. - The company has invested an average of 32.09% of its revenue in R&D over the past three years, significantly exceeding the industry average, and has built a complete technology chain comprising CNC systems, key functional components, and high-end five-axis machine tools [2][3]. - Kede CNC has achieved an 85% self-manufacturing rate for core components and over 90% for domestic autonomy, addressing the industry's reliance on imported components [2]. Group 2: Market Applications and Growth - Kede CNC has expanded its product structure to serve various sectors, including aerospace, new energy vehicles, and precision molds, demonstrating its versatility in high-end equipment manufacturing [4]. - In 2024, Kede CNC secured new orders worth 78.08 million yuan, a year-on-year increase of approximately 24%, and its annual production capacity for high-end five-axis machine tools has surged from over 10 units a decade ago to 500 units currently [8]. - By mid-2025, Kede CNC's developed high-end five-axis machine tools have been applied in over 1,600 units across key domestic sectors, showcasing its successful market penetration [8]. Group 3: Collaborative Innovation - Kede CNC emphasizes the importance of collaboration in its strategic planning, engaging in partnerships with universities such as Tsinghua, Harbin Institute of Technology, and Beihang University to create an innovation system that spans basic research, technology breakthroughs, and industrial transformation [9]. - The company has established a test base for processing verification of key structural components for domestic large aircraft, collaborating with Shenyang Aerospace Industry Group and AVIC [9]. - Kede CNC aims to enhance its market capabilities by increasing R&D investment, upgrading production systems, and improving supply chain and service capabilities to contribute to the high-quality development of China's equipment manufacturing industry [9].

Core Insights - Kede CNC is a leading domestic manufacturer of high-end CNC systems and key functional components in China, specializing in the integration of machine tools, control systems, feedback devices, and motors [1] - The company has established itself as a significant production and sales base for five-axis equipment in China, demonstrating a high level of professional autonomy [1] - Kede CNC has formed a partnership with Shenyang Aviation Industry and Shenyang Aircraft Corporation to create the first domestic pilot base for large aircraft structural component process verification, focusing on overcoming core bottlenecks in the R&D and mass production of complex components for civil aircraft and drones [1] Product Development - The new five-axis turning and milling composite processing center KMU180T has been deployed for processing aviation engines for large civil aircraft [1] - A six-axis five-linkage integral blade milling center has received small batch orders [1] - New products, including a large and small flip milling processing center for aircraft structural components, are currently in the application verification stage [1]

Core Viewpoint - Kede CNC is a leading domestic manufacturer of high-end CNC systems and key functional components in China, focusing on integrated machine tools and control systems [1] Group 1: Company Overview - Kede CNC has achieved significant scale as a production and sales base for five-axis equipment in China [1] - The company is recognized for its high degree of specialization and autonomy in manufacturing [1] Group 2: Strategic Developments - In June 2025, Kede CNC, in collaboration with Shenyang Aviation Industry and Shenyang Aircraft Corporation, established the first domestic pilot test base for large aircraft structural components based entirely on domestically produced five-axis CNC machine tools [1] - This initiative aims to address core bottlenecks in the R&D and mass production of complex structural components for civil aircraft and drones, which is strategically significant for national defense and high-end equipment supply chain security [1] Group 3: Product Innovations - The newly developed five-axis turning and milling composite processing center KMU180T has been put into use for processing aviation engines for large civil aircraft [1] - A six-axis five-linkage integrated blade milling processing center has received small batch orders [1] - New products, including a large and small flip milling processing center for aircraft structural components, are currently in the application verification stage [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][10]. Core Insights - The company reported a revenue of 295 million yuan for the first half of 2025, representing a year-on-year growth of 15.24%, driven by significant demand for automated production line orders [8]. - The net profit attributable to the parent company reached 49 million yuan, with a year-on-year increase of 1.27%, which was lower than revenue growth due to increased share-based payment expenses, employee salaries, and R&D costs [8]. - The gross margin and net margin were 38.67% and 16.64%, respectively, with a decline in gross margin attributed to the high proportion of production line business [8]. - The company has made breakthroughs in the aerospace and military sectors, expanding its user base and gaining recognition from leading industry players [8]. - The demand for five-axis CNC machine tools in the civilian sector has increased, with significant growth in new orders for the company's products [8]. - R&D investment totaled 98 million yuan in the first half of 2025, a year-on-year increase of 27.10%, accounting for 33.34% of revenue [8]. - The company is nearing the completion of its capacity expansion, with new production lines set to start trial operations in 2025 [8]. - The company is positioned as a leader in high-end CNC machine tools, with core components being self-controlled and product margins remaining high [8]. Financial Summary - Total revenue is projected to grow from 605.47 million yuan in 2024 to 1,112.04 million yuan in 2027, with a compound annual growth rate (CAGR) of approximately 24.96% [7]. - Net profit attributable to the parent company is expected to increase from 129.89 million yuan in 2024 to 230.38 million yuan in 2027, reflecting a CAGR of 25.53% [7]. - The diluted EPS is forecasted to rise from 0.98 yuan in 2024 to 1.73 yuan in 2027, with corresponding P/E ratios decreasing from 63.84 to 35.99 [7].

Core Viewpoint - The company, Kode CNC (688305), reported a revenue increase of 15.24% year-on-year for the first half of 2025, indicating strong growth in its operations and a focus on high-end CNC machine tools and systems [1][2] Financial Performance - The company achieved an operating revenue of 295 million yuan, with a net profit attributable to shareholders of 49.06 million yuan, reflecting a 1.27% increase year-on-year [1] - The net profit after deducting non-recurring gains and losses was 36.06 million yuan, down 7.43% year-on-year, while the net profit attributable to shareholders after excluding share payment impacts was 55.15 million yuan, up 13.85% [1] - Total assets reached 2.284 billion yuan, a 1.23% increase from the previous year, and net assets were 1.859 billion yuan, up 1.71% [1] - Operating cash flow turned positive at 165 million yuan [1] Business Segmentation - In the first half of 2025, the production line business accounted for approximately 54% of total revenue, while five-axis CNC machine tools contributed about 40% [2] - New orders for flow-type products, particularly the five-axis vertical machining center, made up over 50% of new orders, with five-axis horizontal machining centers and five-axis horizontal turning-milling composite centers accounting for about 30% [2] Product Development and Market Position - The company launched the five-axis turning-milling composite center KMU180T, which is now being used in the energy sector for processing blower impellers [2] - A collaboration was established with Shenyang Aircraft Industry Group and AVIC Shenyang Aircraft Company to create a "large aircraft structural component process verification pilot base," focusing on precision machining for domestic large aircraft [3] - The company has developed several high-end five-axis CNC machines capable of processing magnesium alloy materials, which are critical for lightweight applications in various industries [3]