Investment Rating - The report maintains a "Buy" rating for the company [1]. Core Views - The company is approaching an overseas turning point, with accelerated growth in the seating segment. The integration of Grammer is showing signs of improvement, and the company's performance is expected to accelerate in the coming years [7][12]. Summary by Sections 1. Integration of Grammer and Overseas Performance - The company completed the acquisition of Grammer, a century-old automotive interior giant, and has been advancing integration efforts. The integration faced challenges due to global pandemic impacts, chip shortages, and inflation, which affected Grammer's performance [12][19]. - In 2024, the company intensified integration measures, including divesting the underperforming TMD subsidiary in North America and restructuring operations in Europe to enhance efficiency [28][30]. - The overseas performance of Grammer is showing signs of recovery, with significant improvements noted in Q1 2025 [27][34]. 2. Accelerated Growth in Passenger Car Seats - The domestic market for passenger car seats exceeds 100 billion yuan, driven by consumer upgrades and increasing demand for comfort and safety features [41][48]. - The company has a strong order backlog for passenger car seats, with established relationships with major manufacturers such as NIO, Li Auto, and BMW, which supports future growth [58]. - The employee stock ownership plan implemented in April 2025 is expected to enhance the profitability of the seating business [7][12]. 3. Earnings Forecast and Investment Recommendations - The company forecasts net profits of 646.47 million yuan, 1.09672 billion yuan, and 1.38364 billion yuan for 2025, 2026, and 2027, respectively, with corresponding EPS of 0.51 yuan, 0.87 yuan, and 1.09 yuan [1][7]. - The projected P/E ratios for 2025, 2026, and 2027 are 27.10, 15.98, and 12.66, respectively, indicating a favorable valuation as the company is positioned to benefit from the ongoing domestic market expansion and the shift towards domestic alternatives in the seating industry [1][7].

Industry Investment Rating - The industry investment rating is maintained at "Outperform the Market" [1] Core Insights - Gramer has turned profitable after divesting loss-making assets, with a net profit of 0.097 billion yuan in Q1 2025 and an expected operating profit of 60 million euros for the year [3][13] - The passenger car seat market is projected to exceed 50 billion USD, with significant potential for domestic substitution as the market is currently dominated by foreign companies [6][26] - The company has a robust order backlog, having delivered 330,000 passenger car seats in 2024, generating revenue of 3.11 billion yuan, a substantial increase from 655 million yuan in 2023 [31][35] Summary by Sections Market Overview - The global automotive seat market was valued at 52.5 billion USD in 2023 and is expected to reach 53.4 billion USD in 2024, with a forecast of 58.9 billion USD by 2031 [6][20] - The automotive seat industry has a high concentration, with a CR5 of approximately 78% in 2023, indicating a strong presence of foreign firms [26][21] Company Performance - The company achieved breakeven in its passenger car seat business in 2024, with a total of 21 projects in hand, representing a total lifecycle sales value exceeding 90 billion yuan, primarily in the new energy sector [31][35] - The average selling price (ASP) for passenger car seats reached 8,695.5 yuan in 2024, significantly higher than commercial vehicle seats [31][32] Strategic Moves - Gramer's divestment of the loss-making TMD business in the U.S. is part of a strategy to focus on core operations and improve profitability [3][13] - The company is actively expanding its customer base in Europe, having secured a project order from BMWAG for passenger car seats [35]

Core Insights - In 2024, Tiancheng Control (603085.SH) reported a significant revenue growth of 56.27%, reaching 2.23 billion yuan, driven primarily by a 122.79% increase in passenger vehicle seat revenue, which became the main growth engine for the company [1][2] - Despite a net loss of 16.48 million yuan due to increased R&D investments and currency fluctuations, the company laid a solid foundation for profit improvement in 2025, with Q1 2025 showing a revenue increase of 46.74% and a net profit of 21 million yuan, marking a turnaround [1][2] - The company is positioned as a hidden champion in the domestic automotive seat sector, leveraging a "vertical integration + horizontal collaboration" development model to build a comprehensive industrial layout across various segments [1][3] Passenger Vehicle Business - In 2024, the passenger vehicle seat segment accounted for 50.42% of total revenue, surpassing the engineering and commercial vehicle segments for the first time, with revenue reaching 1.05 billion yuan [2][3] - The growth in this segment is attributed to successful project launches and effective capacity release, supported by multiple new project approvals that ensure ongoing growth [2][3] - The passenger vehicle seat revenue has increased nearly tenfold from 2018, reflecting the company's ability to capitalize on opportunities in the new energy vehicle market [3] Engineering and Aviation Business - The engineering machinery and commercial vehicle seat segments generated 718 million yuan in revenue, a 5.89% increase, benefiting from industry recovery and improved client acquisition [4] - The aviation seat segment also showed promise, with a 52.89% revenue growth as the aviation industry gradually recovers, supported by new orders from various airlines [4] - The company is focusing on product development tailored to international markets, enhancing its export market share [4] Future Strategy - The company is expanding its production base for passenger vehicle seats in various locations, including Wuhan and Chuzhou, and is investing in local partnerships to better serve regional clients [5] - International expansion is a priority, with plans to establish subsidiaries and production bases in Southeast Asia to support domestic clients' international strategies [5] - The company is entering the emerging low-altitude economy sector, particularly in eVTOL (electric vertical takeoff and landing) aircraft, leveraging its R&D capabilities and certification experience [5] Market Position - Tiancheng Control has established strong partnerships with major automotive manufacturers, enhancing its market presence and reputation [6] - The company aims to continue its growth trajectory by adhering to its mission of providing comfortable and safe seating solutions through technological innovation [6]