Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company has shown significant revenue growth driven by its core stamping parts business, which is closely tied to leading new energy vehicle manufacturers such as Tesla and Li Auto [7] - The company is expected to maintain a high profitability trajectory due to its cost control measures and the high gross margin of its new electroplating business [7] - Revenue and profit forecasts for the company are optimistic, with projected revenues of 36.47 billion, 46.93 billion, and 55.66 billion yuan for 2025, 2026, and 2027 respectively, reflecting year-on-year growth rates of 44.1%, 28.7%, and 18.6% [7] Summary by Sections Financial Performance - In H1 2025, the company achieved a revenue of 1.287 billion yuan, a year-on-year increase of 15.2%, and a net profit of 201 million yuan, up 27.2% year-on-year [7] - The gross margin for Q2 2025 reached a record high of 29.86% [7] Business Segments - The stamping parts business generated 854 million yuan in revenue, a year-on-year increase of 41.08%, serving as the main driver of revenue growth [7] - The electroplating business, which has a high gross margin of 77.45%, is expected to continue contributing positively to overall profitability [7] Cost Management - The company demonstrated excellent cost control, with a total expense ratio of 7.60% in H1 2025, down 0.96 percentage points year-on-year [7] - In Q2 2025, the total expense ratio further decreased to 7.42% [7] Future Outlook - The company is expected to benefit from the recovery in sales from traditional OEM clients and the continued growth of new energy vehicle manufacturers [7] - The expansion into new business areas, particularly in precision electroplating, is anticipated to provide additional growth opportunities [7]

Investment Rating - The report maintains a "Buy" rating for the company [2][4]. Core Views - The company is expected to enter a rapid growth phase due to strong partnerships with SAIC and Xiaomi, with significant profit growth observed in the second quarter [1][7]. - Revenue forecasts for 2025-2027 are projected at 34.3 billion, 44.4 billion, and 52.3 billion yuan, representing year-on-year growth of 35.5%, 29.4%, and 17.9% respectively [2][4]. - Net profit forecasts for the same period are 5.1 billion, 6.5 billion, and 7.8 billion yuan, with year-on-year growth rates of 35.3%, 26.2%, and 21.0% [2][4]. Financial Summary - The company achieved a revenue of 12.87 billion yuan in the first half of 2025, a year-on-year increase of 15.2%, with a net profit of 2.01 billion yuan, up 27.2% [7]. - In Q2 2025, revenue reached 6.87 billion yuan, showing a year-on-year and quarter-on-quarter growth of 9.5% and 14.4% respectively, with net profit of 1.07 billion yuan, reflecting a year-on-year increase of 31.9% [7]. - The company’s earnings per share (EPS) are projected to be 1.51 yuan in 2024, increasing to 3.12 yuan by 2027 [4][8].

1. Report Industry Investment Rating There is no information provided regarding the industry investment rating in the report. 2. Core Views - The Xizhen Convertible Bond (111022.SH) began online subscription on June 18, 2025, with a total issuance scale of 520 million yuan. After deducting issuance fees, the net raised funds will be used for the Langfang Zhenhua Quanjing Shen Automobile Parts Project [4]. - The current bond floor valuation is 95.23 yuan, with a YTM of 2.81%. The convertible bond has a 6 - year term, and its pure - bond value offers good protection [4]. - The current conversion parity is 100.3 yuan, with a parity premium rate of - 0.31%. The conversion period is from December 24, 2025, to June 17, 2031 [4]. - The bond terms are standard, and the total equity dilution rate is 6.11%, with a relatively small dilution pressure on the equity [4]. - It is estimated that the listing price of the Xizhen Convertible Bond on the first day will be between 123.58 and 137.42 yuan, and the subscription success rate is expected to be 0.0018%. It is recommended to subscribe actively [4]. - Wuxi Zhenhua's main business includes stamping parts, sub - assembly processing, mold, and selective precision electroplating processing. The company has a complete technical system and stable cooperation with many well - known customers [4]. - Since 2019, the company's revenue and net profit attributable to the parent have been growing steadily, with a compound growth rate of 10.23% and 27.23% respectively from 2019 - 2024 [4]. - The company's main business income accounts for a high proportion of total revenue, and the business is stable. The sales net profit margin and gross profit margin fluctuate, while the sales expense ratio remains low [4]. 3. Summary by Directory 3.1. Convertible Bond Basic Information - The Xizhen Convertible Bond's issuance and subscription schedule is from June 16 to June 22, 2025, including steps such as prospectus publication, online roadshows, priority subscription for original shareholders, and online subscription [11]. - The basic terms of the convertible bond include a 6 - year term, a face value of 100 yuan, a coupon rate ranging from 0.20% to 2.30% from the first to the sixth year, and a redemption price of 113% of the face value at maturity. The conversion price is 31.98 yuan, and the conversion period is from December 24, 2025, to June 17, 2031 [12]. - The raised funds will be used for the Langfang Zhenhua Quanjing Shen Automobile Parts Project (420 million yuan) and working capital replenishment (100 million yuan) [13]. - The bond's pure - bond value is 117.80 yuan, with a pure - bond premium rate of - 15.11% and a YTM of 2.81%. The conversion parity is 101.78 yuan, with a parity premium rate of - 1.75% [13][14]. 3.2. Investment Subscription Recommendations - Based on comparable targets and empirical results, considering the good bond floor protection, rating, and scale attractiveness of the Xizhen Convertible Bond, it is estimated that the first - day listing conversion premium rate will be around 30%, and the listing price will be between 123.58 and 137.42 yuan [16][17]. - It is estimated that the original shareholders' priority subscription ratio will be 70.89%, and the online subscription success rate will be 0.0018% [18]. 3.3. Underlying Stock Fundamental Analysis 3.3.1. Financial Data Analysis - Wuxi Zhenhua's main business consists of stamping parts, sub - assembly processing, mold, and selective precision electroplating processing. The company has a complete technical system and stable cooperation with many customers [19]. - From 2019 to 2024, the company's revenue and net profit attributable to the parent have grown steadily, with a compound growth rate of 10.23% and 27.23% respectively. In 2024, the net profit attributable to the parent was 378 million yuan, a year - on - year increase of 36.30% [21]. - The main business income accounts for a high proportion of total revenue, and the business is stable. The sales net profit margin and gross profit margin fluctuate, while the sales expense ratio remains low, and the financial expense ratio is slightly higher than the industry average [24]. 3.3.2. Company Highlights - Wuxi Zhenhua has a complete stamping and welding technology system, covering the entire process from pre - process design analysis and stamping mold research and development to post - stamping and welding technology, forming a unique competitive advantage [32]. - The company has established long - term stable cooperation relationships with many well - known domestic and foreign vehicle manufacturers [32]. - In 2023, the company added the selective precision electroplating processing business through the acquisition of Wuxi Kaixiang, becoming a new profit growth point [33].