Core Viewpoint - The company is actively involved in the production of advanced CNC machine tools essential for the manufacturing of large aircraft and engines, particularly focusing on the C919 and C929 models [1] Group 1: Product Development and Production - The company has developed mature technologies for five-axis vertical and horizontal machining, compound machining, and blade tip grinding, which are already in mass production for aircraft and engine manufacturing [1] - A new six-axis five-linkage blade processing center has been introduced for the machining of aircraft engine components, with small batch orders already in production this year [1] - The company is validating a new size flip milling processing center for aircraft structural components, which is currently in the application verification stage [1] Group 2: Strategic Partnerships and Future Plans - In June 2025, the company will sign a cooperation agreement with Shenyang Aerospace Industry Group Co., Ltd. and AVIC Commercial Aircraft Co., Ltd. to establish the first domestic "large aircraft structural component process verification pilot base" based on high-end domestic five-axis CNC machine tools in Shenyang [1] - The focus will be on precision machining of complex structural components for domestic large aircraft like the C919 and C929, as well as large drones, creating several specialized verification platforms [1] - The company is prepared for product and process verification and is accelerating capacity construction to meet the production schedule of large aircraft and engines, aiming for significant application of high-end five-axis CNC machine tools in the civil aviation sector [1]

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]

Group 1: Revenue and Profit Performance - The company achieved a revenue of 295 million yuan in H1 2025, representing a year-on-year increase of 15.24% [1] - The net profit attributable to shareholders was 49 million yuan, up 1.27% year-on-year, while the net profit excluding non-recurring items was 36 million yuan, down 7.43% year-on-year [1] - In Q2 2025, the company reported a revenue of 164 million yuan, a year-on-year increase of 5.97%, but the net profit attributable to shareholders decreased by 16.25% [1] Group 2: Gross Margin and Expense Management - The gross margin for H1 2025 was 38.67%, down 4.73 percentage points year-on-year, with Q2 2025 gross margin at 37.72%, down 5.62 percentage points year-on-year [2] - The decline in gross margin was attributed to changes in accounting policies and an increase in the proportion of lower-margin automated production line revenue [2] - The company maintained a good control over operating expenses, with a period expense ratio of 20.4%, a decrease of 0.7 percentage points year-on-year [2] Group 3: Workforce and Cash Flow Improvement - As of the end of H1 2025, the proportion of technical personnel in the company increased to 31%, up 6.90% year-on-year, indicating increased market demand [3] - The net cash flow from operating activities improved to 165 million yuan, a significant recovery from a negative cash flow of 20 million yuan, primarily due to increased cash receipts from sales and government R&D funding [3] Group 4: Market Expansion and Product Recognition - The company is steadily expanding its market presence, particularly in the aerospace sector, establishing partnerships with multiple new users and contributing to domestic machine tool breakthroughs [4] - The company has made significant strides in the civil sector, achieving breakthroughs in low-altitude economy and new energy vehicles, with notable order growth for its DeChuang series products [4] - The company’s products, including the new six-axis five-linkage blade processing center, have gained high recognition from both new and existing customers, reflecting the company's strong technical capabilities [4] Group 5: Profit Forecast and Investment Rating - The company has adjusted its net profit forecasts for 2025-2027 to 138 million yuan (previously 170 million yuan), 187 million yuan (previously 215 million yuan), and 243 million yuan (previously 276 million yuan) [4] - The current stock price corresponds to dynamic P/E ratios of 61, 45, and 34 times for the respective years, maintaining an "overweight" rating due to the company's leading position in the five-axis machine tool sector [4]

Core Viewpoint - The company reported a revenue of 295 million yuan for the first half of 2025, marking a year-on-year increase of 15.24%, while the net profit attributable to shareholders was 49.06 million yuan, up 1.27% year-on-year, despite a decrease in net profit excluding non-recurring gains and losses by 7.43% due to increased share-based payment expenses from the 2024 restricted stock incentive plan [1] Company Summary - The company specializes in the design, research and development, production, sales, and service of five-axis CNC machine tools and their key components, as well as high-end CNC systems, making it one of the few domestic enterprises with dual R&D capabilities in high-end CNC systems and machine tools [1] - The five-axis CNC machine tool is recognized for its high technological content and precision, essential for processing complex surfaces, and is considered a critical tool for key components in industries such as aerospace, shipbuilding, precision instruments, and power generation [1] Industry Summary - China's five-axis CNC machine tool development started relatively late, with few domestic companies capable of independent research and production, leading to a market dominated by multinational companies from Germany, Japan, and the USA [2] - Recent years have seen the emergence of several domestic five-axis CNC machine tool companies, including the subject company, which are gradually gaining market recognition and forming an import substitution trend [2] - According to a report by the China Business Industry Research Institute, the market size for China's five-axis CNC machine tools is expected to reach approximately 12 billion yuan in 2024 and exceed 13 billion yuan in 2025 [2] Product and Market Development - As of the end of the reporting period, the company's series of five-axis CNC machine tool products have been widely applied in nearly 50 user units under major groups such as Aerospace Science and Industry, Aerospace Technology, AVIC, and Aero Engine Group [3] - The company reported that over 50% of new orders for flow-type products were for five-axis vertical machining centers, with approximately 30% for new five-axis horizontal machining centers and five-axis turning-milling composite machining centers, and nearly 10% for six-axis five-linkage blade processing centers [3] - New products such as the six-axis five-linkage blade processing center KTBM1200 and the five-axis turning-milling composite processing center KMU180T received their first orders, while the DMC55 series of high-precision five-axis vertical machining centers continued to attract interest from private customers [3] Strategic Partnerships - In June 2025, the company signed a cooperation agreement with Shenyang Aerospace Industry Group Co., Ltd. and AVIC Shenyang Aircraft Company to establish the first domestic "large aircraft structural component process verification pilot base" based entirely on domestically produced high-end five-axis CNC machine tools [4] - This project aims to utilize dozens of high-end five-axis CNC machine tools to focus on the precision processing of complex structural components for domestic large aircraft such as C919/C929 and large drones, establishing specialized verification platforms for key processing capabilities [4]

Investment Rating - The report does not explicitly state an investment rating for the general equipment industry or the specific company being analyzed [1]. Core Insights - The company is strategically positioning itself in the civil sector, focusing on electric vehicles, medical equipment, and civil aviation [17]. - In 2024, the production of electric vehicles in China is projected to reach 12.888 million units, reflecting a year-on-year growth of 34.4%, while sales are expected to be 12.866 million units, with a growth of 35.5% [17]. - The company has introduced advanced machining centers tailored for the electric vehicle industry, emphasizing high efficiency and low energy consumption [17]. - The company is also expanding its product offerings in the medical sector, particularly for ergonomic implants, in response to the aging population, which is expected to constitute 22.0% of the total population by 2024 [17]. - The company has launched several high-end equipment models for the aviation sector, including five-axis machining centers designed for efficient processing of aircraft components [18]. Summary by Sections 1. Basic Research Information - The research was conducted on the company Kede CNC, which operates in the general equipment industry, on February 27, 2025 [13]. 2. Detailed Research Institutions - The research involved institutions such as CITIC Securities and Renqiao (Beijing) Asset Management [14]. 3. Research Institution Proportion - The report does not provide specific data on the proportion of research institutions involved [15]. 4. Main Content Information - The company is actively developing products for humanoid robots, leveraging its control algorithms and servo drive technologies to meet the manufacturing needs of this sector [19]. - The company has developed a large thrust linear motor that enhances control precision and acceleration, suitable for manufacturing components like screws used in humanoid robots [19].