Core Viewpoint - Kode CNC is one of the few companies in China that has established a dual R&D system for high-end CNC systems and five-axis high-end CNC machine tools, with a strong technical foundation in aerospace manufacturing [1] Group 1: Company Overview - Kode CNC has a deep technical accumulation in the aerospace manufacturing sector [1] - The company's products have been widely applied in dozens of user units under the China Aerospace Science and Industry Corporation and China Aerospace Science and Technology Corporation [1] Group 2: Industry Application - Kode CNC has participated in the manufacturing of various aerospace vehicles and their supporting systems, including launch vehicles and satellites [1]

Core Viewpoint - The company is actively cultivating the high-precision application market represented by five-axis CNC machine tools, which have a wide range of downstream applications in various industries [1] Group 1: Product Development - The company is focusing on the research and development of high-end five-axis CNC machine tools to accelerate import substitution and achieve technological self-control [1] - Multiple models of high-end five-axis CNC machine tools have been launched in the market, with small batch deliveries already achieved [1] Group 2: Market Applications - The five-axis CNC machine tools can be used for precision machining in industries such as precision molds, shipbuilding, medical devices, new energy vehicles, aerospace, and humanoid robots [1]

Investment Rating - The report maintains a "Recommended" rating for the company [5][7]. Core Insights - The company achieved a cumulative operating revenue of 3.826 billion yuan in the first three quarters of 2025, representing a year-on-year increase of 16.80%. The net profit attributable to shareholders reached 348 million yuan, up 72.56% year-on-year, with a non-recurring net profit of 341 million yuan, increasing by 106.81% [1]. - In Q3 2025, the operating revenue was 1.384 billion yuan, a year-on-year growth of 14%, while the net profit attributable to shareholders surged by 164.38% to 115 million yuan, and the non-recurring net profit rose by 196.21% to 123 million yuan [1]. - The gross margin for Q3 2025 improved to 25.8%, an increase of 2.3 percentage points year-on-year, and the net profit margin rose by 4.7 percentage points to 8.51% [2]. Summary by Sections Financial Performance - The company reported a significant improvement in gross and net profit margins, alongside enhanced cost control and increased R&D investment. The expense ratio decreased by 2.7 percentage points year-on-year, with sales, management, R&D, and financial expense ratios showing varied changes [2]. - The forecast for revenue from 2025 to 2027 is projected at 5.35 billion, 6.29 billion, and 7.11 billion yuan, respectively, with net profits expected to be 510 million, 640 million, and 750 million yuan [5][6]. Market Opportunities - The foldable smartphone market is anticipated to experience rapid growth in 2026, driven by key products like Huawei's Mate and Pura X series. The company’s flagship product, the drilling machine, has achieved comprehensive coverage of core users in the 3C sector, with a market share leading the industry [3]. - The company is actively expanding its product applications in AI hardware and humanoid robots, collaborating with clients in these fields for precision processing of components [4]. Strategic Outlook - The company is positioned to benefit from the recovery in the 3C sector and the domestic production of high-end machine tools. The current stock price corresponds to a PE ratio of 33, 26, and 22 for the years 2025, 2026, and 2027, respectively [5][6].

Core Viewpoint - The company is actively developing its five-axis products for various high-precision applications across multiple industries, aiming for market adaptation and import substitution [1] Group 1: Product Applications - The five-axis products are widely applicable in precision mold manufacturing, shipbuilding, medical devices, new energy vehicles, aerospace, and humanoid robots [1] Group 2: Market Strategy - The high-precision application market represented by five-axis products is a key area that the company is cultivating [1] - The company is committed to accelerating import substitution to achieve self-control in response to market trends [1] Group 3: Research and Development - The company continues to invest in the research and development of high-end CNC machine tools, specifically five-axis models [1] - Multiple models of five-axis high-end CNC machine tools have been launched to the market, with small batch deliveries already achieved [1]