Core Viewpoint - The company has shown strong revenue growth and profitability improvement in the first half of 2025, with a significant increase in net profit exceeding expectations, driven by demand from automotive manufacturers in the Asia-Pacific region [1][2]. Revenue Performance - In H1 2025, the company's revenue reached $2.24 billion, a year-on-year increase of 6.8%, benefiting from the continuous growth in the Asia-Pacific region [1]. - Adjusted for unfavorable foreign currency translation and reduced commodity compensation, revenue growth was 7.6%, outperforming the market by 450 basis points [1]. - Revenue contributions from various products were as follows: EPS at $1.53 billion (up 9%), CIS at $230 million (up 3%), HPS at $90 million (up 2%), and DL at $400 million (up 4%) [1]. - The company secured $1.5 billion in new orders in H1 2025, with 69% from EPS and 47% from the Asia-Pacific region, and anticipates achieving $5 billion in orders for the full year [1]. Profitability Metrics - The gross margin improved by 1.5 percentage points year-on-year to 11.5%, with gross profit increasing by 22.7% to $260 million, driven by revenue growth and operational performance improvements [2]. - Adjusted EBITDA for H1 2025 was $230 million, a 16.8% increase year-on-year, with an EBITDA margin of 10.3%, up 0.9 percentage points [2]. - The net profit attributable to the parent company surged by 304.5% year-on-year to $63.48 million, with a net profit margin increase of 2.1 percentage points to 2.8% [2]. Strategic Developments - The company is advancing its core smart driving technologies, including steer-by-wire systems, rear-wheel steering, and line control braking, with significant contracts already secured from leading electric vehicle manufacturers [3]. - The MotionIQ software suite was launched to enhance smart motion control, integrating various functionalities to accelerate product launch and improve quality and cost efficiency [3]. - The Asia-Pacific region's revenue share increased by 2.3 percentage points to 30.6%, with higher profitability compared to North America and EMEASA [4]. Capacity Expansion - The company is expanding its production capacity in the Asia-Pacific region, with the opening of a new factory in Changshu and plans for a new facility in Liuzhou, expected to be operational by H1 2026 [4]. - The ongoing capacity expansion and increased utilization rates are anticipated to further enhance revenue and profitability in the Asia-Pacific region [4]. Investment Outlook - The company is expected to benefit from the trends of electrification and smart technology, maintaining steady growth and positioning itself among the leading manufacturers of linear steering systems [4]. - Revenue projections for 2025-2027 are $4.6 billion, $4.8 billion, and $5.1 billion, with net profits of $130 million, $160 million, and $180 million, reflecting year-on-year growth rates of 107%, 25%, and 11% respectively [4].

Core Viewpoint - The company reported strong performance in 1H25, with total revenue and net profit significantly exceeding expectations, primarily driven by growth in the Asia-Pacific region [3][4]. Group 1: Financial Performance - Total revenue for 1H25 increased by 6.8% year-on-year to $2.24 billion, accounting for 51% of the full-year revenue forecast [3]. - Gross margin improved by 1.5 percentage points to 11.5%, while EBITDA rose by 16.8% to $230 million [3]. - Net profit surged by 304.5% to $63 million, representing 57% of the annual net profit forecast [3]. Group 2: Regional Business Growth - The Asia-Pacific region's revenue grew by 15.5% year-on-year to $690 million, increasing its total revenue share by 3 percentage points to 31% [4]. - EMEASA region revenue also saw a 9.4% increase to $400 million, while North America’s revenue share decreased by 2 percentage points to 51% [4]. - EBITDA margin in the Asia-Pacific region decreased by 0.7 percentage points to 16.9%, whereas EMEASA's EBITDA margin increased by 6.8 percentage points to 8.8% [4]. Group 3: New Orders and Business Expansion - The company secured $1.5 billion in new orders in 1H25, with 47% from Asia-Pacific, 30% from EMEASA, and 23% from North America [4]. - The company anticipates adding $5 billion in new orders for the full year 2025, with significant projects in North America and Europe [5]. - The company is leveraging its technological advantages to expand into new business areas, including steer-by-wire systems and software solutions for smart vehicles [5].

Investment Rating - The report maintains a "Buy" rating for the company, with an updated target price of HKD 8.72, corresponding to approximately 20 times the 2025 EPS [3][5]. Core Insights - The company's performance in the first half of 2025 exceeded expectations, with total revenue increasing by 6.8% year-on-year to USD 2.24 billion, accounting for 51% of the full-year revenue forecast. Net profit surged by 304.5% year-on-year to USD 63 million, representing 57% of the annual net profit forecast [1][3]. - The growth in the Asia-Pacific region is a significant driver of the company's strong performance, with revenue from this region increasing by 15.5% year-on-year to USD 690 million, contributing to 31% of total revenue [1]. - The company is expanding its order book, with a forecasted addition of USD 5 billion in new orders for 2025, including projects in North America and Europe [2]. Summary by Sections Financial Performance - In 1H25, the company reported a gross margin of 11.5%, up by 1.5 percentage points year-on-year, and an EBITDA of USD 230 million, reflecting a 16.8% increase year-on-year [1]. - The EBITDA margin for the Asia-Pacific region was 16.9%, while the EMEASA region saw an EBITDA margin of 8.8%, up by 6.8 percentage points year-on-year [1]. Revenue and Profit Forecast - The company’s total revenue is projected to grow from USD 4.207 billion in 2023 to USD 5.055 billion by 2027, with a compound annual growth rate (CAGR) of approximately 6.7% [4]. - The net profit attributable to the parent company is expected to increase significantly from USD 37 million in 2023 to USD 234 million by 2027, with a notable growth rate of 129.3% in 2025 [4][8]. Order and Market Expansion - The company has successfully secured new orders in various regions, with 47% of new orders coming from the Asia-Pacific region, 30% from EMEASA, and 23% from North America [1][2]. - The management anticipates that the company will continue to leverage its technological advantages in steering systems to expand into new business areas, particularly in the field of drive-by-wire chassis systems [2].

Core Viewpoint - The company is expected to achieve a total revenue of $4.28 billion in 2024, reflecting a year-on-year increase of 1.6%, with significant growth in EBITDA and net profit, indicating a positive financial outlook for the year [3]. Group 1: Financial Performance - Total revenue for 2024 is projected to be $4.28 billion, up 1.6% year-on-year, aligning with previous forecasts [3]. - Gross margin is expected to increase by 1.7 percentage points to 10.5%, while EBITDA is anticipated to rise by 22.5% to $420 million [3]. - Net profit is forecasted to grow by 68.0% to $62 million, with a significant increase in net profit in the second half of 2024, projected to be $46 million, reflecting a year-on-year increase of 1577.3% [3]. Group 2: Regional Performance - The Asia-Pacific region is expected to see a revenue increase of 10.1% to $1.34 billion, contributing to 31% of total revenue, while North America’s revenue share is projected to decrease by 3 percentage points to 51% [4]. - EBITDA margin in the Asia-Pacific region is expected to rise by 0.6 percentage points to 17.2%, while North America’s EBITDA margin is projected to increase by 2.3 percentage points to 8.1% [4]. - The company anticipates that the EBITDA margin will increase by 1.7 percentage points to 9.9% in 2024, driven by growth in the Asia-Pacific region and recovery in North America [4]. Group 3: Order Growth and Product Development - The company secured new orders totaling $6 billion in 2024, with significant breakthroughs in steer-by-wire, DP-EPS, and rear-wheel steering businesses [5]. - Notable new orders include projects from leading North American electric vehicle manufacturers and major Chinese automakers, indicating a broadening customer base [5]. - The company is expected to leverage its technological advantages and modular capabilities to expand into new business areas, particularly in advanced driver-assistance systems [5].