Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 132.59 [6][5]. Core Insights - The company reported strong performance in H1 2025, achieving revenue of USD 7.833 billion (yoy +7.1%) and a net profit of USD 628 million (yoy +14.2%), with a net profit margin of 8.0% (yoy +0.5pct) [1][3]. - Growth is driven by flagship brands Milwaukee and RYOBI, with a strategic focus on high-end brands and improved operational efficiency [1][4]. - The company is positioned as a global leader in electric tools and outdoor power equipment (OPE), benefiting from a diversified global production capacity to navigate trade challenges [1][4]. Revenue Performance - The electric tools segment generated USD 7.425 billion in H1 2025, up 7.9% yoy, with Milwaukee's revenue increasing by 11.9% and RYOBI's by 8.7% [2]. - The floor care and cleaning segment saw revenue decline to USD 408 million (yoy -4.8%), but operating profit increased by 3.6% to USD 9.7 million due to a shift towards rechargeable products [2]. Profitability Analysis - The company's gross margin for H1 2025 was 40.3% (yoy +0.3pct), attributed to the higher contribution from profitable brands and improved operational efficiency [3]. - Total operating expenses were USD 2.452 billion (yoy +6.5%), with a corresponding expense ratio of 31.3% (yoy -0.2pct) [3]. Brand and Technology Advantage - The company has a strong brand and technological edge, with 13 sub-brands catering to various consumer segments and a commitment to lithium battery upgrades [4]. - Global production facilities are strategically located, with 39% of capacity in China and significant portions in Vietnam, the US, and Mexico, allowing flexibility in response to tariff disruptions [4]. Earnings Forecast and Valuation - The company’s net profit is projected to be USD 1.293 billion, USD 1.473 billion, and USD 1.737 billion for 2025, 2026, and 2027 respectively, with corresponding EPS of USD 0.71, USD 0.80, and USD 0.95 [5][10]. - The report assigns a target PE of 24x for 2025, reflecting the company's leading position and consistent profitability improvements [5][10].