Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Insights - The company has shown steady revenue growth, with a 15.87% year-on-year increase in revenue for the first three quarters of 2025, reaching 1.784 billion yuan. However, net profit decreased by 12.06% to 172 million yuan due to rising expenses and one-time factors [4][5]. - The company is a leader in the automotive passive safety sector, with a product line that includes safety fabrics and airbags. It is also expanding into the semiconductor and computing power manufacturing sectors, aiming to create a second growth engine [5]. - The acquisition of a 57.84% stake in Fuchuang Youyue is planned, which would enhance the company's control over its operations in the AI and computing power manufacturing industry [6]. Financial Performance - For the first three quarters of 2025, the company reported a revenue of 1.784 billion yuan, with a quarterly revenue of 676 million yuan in Q3, reflecting an 18.34% year-on-year increase. However, net profit for Q3 fell by 43.72% to 36 million yuan [4]. - The company expects revenues of 2.7 billion yuan, 3.2 billion yuan, and 3.8 billion yuan for 2025, 2026, and 2027 respectively, with net profits projected at 387 million yuan, 573 million yuan, and 775 million yuan for the same years [6][9]. - The company’s financial ratios indicate a projected increase in earnings per share (EPS) from 0.84 yuan in 2024 to 2.35 yuan in 2027, alongside a decrease in price-to-earnings (P/E) ratio from 54.62 to 19.56 over the same period [9][12].

Core Viewpoint - Huamao Technology (603306.SH) announced a suspension of trading on May 20, planning to issue shares and pay cash to acquire assets and raise matching funds, with no change in actual control [2] Group 1: Acquisition Details - The target asset is Shenzhen Fuchuang Youyue Technology Co., Ltd., with an intention agreement already signed [2] - After the transaction, Huamao Technology will hold 100% equity of Fuchuang Youyue directly and indirectly [2] - The previous valuation of Fuchuang Youyue was between 850 million to 950 million yuan [4][5] Group 2: Financial Performance - Fuchuang Youyue's revenue for 2023 and the first 11 months of 2024 was 630 million yuan and 1.173 billion yuan, respectively, with net profits of 14.52 million yuan and 123.86 million yuan [3] - Huamao Technology's revenue from 2021 to 2024 was 1.206 billion, 1.637 billion, 2.055 billion, and 2.213 billion yuan, with net profits of 176 million, 198 million, 242 million, and 277 million yuan [5] Group 3: Strategic Shift - Huamao Technology is shifting focus from the previously pursued photolithography business to semiconductor and computing power sectors, indicating a strategic pivot [5][6] - The company aims to enhance its business layout in the semiconductor and computing power manufacturing fields, including potential further investments and integration of Fuchuang Youyue's supply chain [5] Group 4: Historical Context - Huamao Technology previously attempted to invest in the photolithography sector, which led to a significant stock price increase but ultimately resulted in financial losses due to underperformance of the invested company [6][7] - The company is now looking to divest from the photolithography business, which no longer aligns with its overall development strategy [6][7]