Summary of Key Points from the Conference Call Company Overview - **Company**: 易事精密 (Yishi Precision) - **Industry**: Automotive parts manufacturing, focusing on both traditional fuel vehicles and new energy vehicles Financial Performance - **H1 2025 Revenue**: Increased by 5.31% year-on-year, reaching 166 million yuan [3] - **Q2 2025 Revenue**: 86 million yuan, a quarter-on-quarter increase of 11.98% [3] - **Net Profit**: H1 2025 net profit was 33 million yuan, up 3.45% year-on-year [3] - **Key Business Segments Growth**: - New energy business: Increased by 8.06% [3] - General automotive parts: Increased by 28.27% [3] - Traditional fuel vehicle parts: Increased by 7.49% [3] Business Developments - **Slovenian Subsidiary**: - Established in partnership with Austria's Mark, operational for three months [6] - Expected to start trial production by the end of September 2025, with projected revenue of 4-5 million yuan this year and 20 million yuan next year [6][7] - **Surface Treatment Technology Company**: - Aimed at meeting the growing demand for building surface treatment products [11] - Two production lines expected to be operational by October 2025, with a capacity expenditure of 20 million yuan [11] Market Expansion Plans - **Focus on Overseas Markets**: - Plans to increase export ratio from the current 10% to a higher percentage, particularly targeting the U.S. market [8][9] - Collaboration with Audi and other partners to penetrate the North American market [10] Product and Technology Developments - **Suspension Business**: - Revenue for H1 2025 was approximately 27 million yuan, with a projected 20% growth in H2 [15] - Major clients include孔辉汽车 (Konghui Automotive) and 保隆科技 (Baolong Technology) [15][17] - **New Technologies**: - Development of second and third-generation suspension technologies, with the second generation already in mass production [18] - Third-generation technology expected to achieve full automation by August-September 2025 [18] Challenges and Strategic Adjustments - **IGBT Product Line**: - Production has been halted, with plans to acquire a local semiconductor company in Germany to expand this business [24] - **Sales and Marketing Costs**: - Decrease in sales expenses due to the elimination of third-party screening costs [27] Future Outlook - **Market Trends**: - Anticipated sustainable growth in traditional fuel vehicle parts driven by domestic production [22] - Continuous investment in R&D and innovation to support global expansion and new product development [30] Additional Insights - **Customer Contributions**: - Major revenue contributions from key clients, with孔辉汽车 being the largest contributor [17] - **Quality Control**: - Establishment of in-house production lines for surface treatment to avoid quality issues experienced previously [11] This summary encapsulates the essential points discussed in the conference call, highlighting the company's financial performance, strategic initiatives, market expansion plans, and future outlook.

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has shown stable growth in H1 2025, with revenue and net profit increasing by 7% and 3% year-on-year, respectively, driven by the stable growth of the automotive industry [7] - The acquisition of Wuxi Tongyi and the establishment of a surface treatment subsidiary are expected to enhance the company's competitive advantage and profitability [7] - The company maintains a leading position in the comprehensive capability of automotive metal parts, with a focus on high-end technology [7] Financial Performance Summary - Revenue for 2023 is projected at 2.7572 billion, with a year-on-year growth of 18.82% [1] - Net profit attributable to the parent company for 2023 is estimated at 515.1 million, reflecting a year-on-year increase of 36.15% [1] - The latest diluted EPS for 2023 is projected at 0.44 yuan per share [1] Revenue Breakdown - Revenue from new energy vehicle components in H1 2025 increased by 8.06% to 69 million, accounting for 41.86% of total revenue [7] - Revenue from traditional fuel vehicle components grew by 28.27% to 43 million, with a 26.10% share of total revenue [7] - General automotive components revenue rose by 7.49% to 38 million, representing 22.91% of total revenue [7] Future Projections - The company forecasts total revenue of 4.085 billion for 2025, with a year-on-year growth of 27.11% [1] - Net profit attributable to the parent company is expected to reach 672.1 million in 2025, with a growth rate of 24.22% [1] - The projected P/E ratios for 2025, 2026, and 2027 are 36.52, 27.02, and 22.54, respectively [1]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [5] Core Views - In the first half of 2025, the company achieved revenue of 166 million yuan (yoy +7%) and a net profit attributable to shareholders of 32.94 million yuan (yoy +3%) [6] - The company has established a strategic partnership with Konghui Automotive to co-develop new products, enhancing its market position [6][7] - The company is focusing on the research and development of new energy vehicle components, with significant growth in traditional fuel vehicle components as well [6] Financial Performance - In 2025H1, the company's revenue from new energy vehicle components, general automotive components, and traditional fuel vehicle components were 69.3 million yuan (yoy +8%), 37.92 million yuan (yoy +7%), and 43.2 million yuan (yoy +28%) respectively [6] - The gross profit margins for these segments were 33% (yoy +2pcts), 38%, and 32% respectively [6] - The company’s total market capitalization is 2,522.71 million yuan, with a circulating market value of 1,342.77 million yuan [3] Business Development - The company has successfully completed the acceptance of its third-generation welding ring production line, which is expected to achieve mass production within the year [6] - The company is actively expanding its overseas presence, including establishing joint ventures in Slovenia to enhance supply chain security [7] - The company’s investment in new technologies and partnerships is expected to improve its competitive edge and market share [6][7] Earnings Forecast - The forecasted net profits for the company from 2025 to 2027 are 65 million yuan, 80 million yuan, and 100 million yuan respectively, corresponding to PE ratios of 38.9, 31.6, and 25.2 times [6][8]

Core Insights - Dongli Machinery reported a revenue of 333 million yuan for the first half of 2025, marking a year-on-year growth of 3.26%, while net profit attributable to shareholders reached 46.52 million yuan, a significant increase of 21.57%, indicating strong performance driven by core automotive parts and rapid expansion in the new energy sector [1][2] Financial Performance - The company demonstrated solid operational fundamentals with a notable increase in profitability, as net profit excluding non-recurring items grew by 23.31% to 45.64 million yuan [2] - Basic earnings per share rose by 22.36% to 0.3223 yuan, and the weighted average return on equity improved by 0.75 percentage points to 4.95%, reflecting enhanced asset profitability [2] - Operating cash flow increased by 2.75% to 58.44 million yuan, primarily due to improved sales collection and optimized working capital turnover [2] Business Segmentation - Dongli Machinery established a dual-driven growth model with traditional and emerging businesses, where the new energy vehicle parts segment became a key growth driver, achieving a revenue of 23.33 million yuan, up 25.21%, with a gross margin of 34.82% [3] - The traditional fuel vehicle parts segment remained stable, generating 304 million yuan in revenue, a 2.51% increase, contributing consistent cash flow and profits [3] - The completion of the "annual production of 25,000 tons of lightweight alloy precision forgings project" by March 31, 2025, is expected to enhance production capacity significantly [3] Technological Advancements - The company invested 15.84 million yuan in R&D, focusing on core technology upgrades, and holds over 120 patents, including more than 30 related to suspension dampers [4] - The self-developed damping device has received 28 national patents and 1 international invention patent, becoming popular in the off-road vehicle sector [4] Customer Relationships and Global Expansion - Dongli Machinery has deepened partnerships with global Tier 1 suppliers, winning several awards, including "Supplier of the Year 2025" from AAM Group [4] - The overseas subsidiary, Dongli Deutschland GmbH, generated 77.37 million yuan in revenue, contributing to 83.07% of the company's foreign income, enhancing global market responsiveness [4]