Investment Rating - The report maintains a "Buy" rating for the company [5][8]. Core Views - The company's performance in H1 2025 was driven by a significant increase in passenger car seat sales, with revenue reaching approximately 19.84 billion yuan, a year-on-year increase of about 121.18%, accounting for approximately 63.92% of the revenue from the Jifeng division [2][4]. - The company is actively expanding its global footprint, with a focus on passenger car seats, having secured 24 projects with a total lifecycle sales value of approximately 98.3 billion yuan as of July 31, 2025 [4]. Summary by Sections Financial Performance - In H1 2025, the company achieved revenue of approximately 105.23 billion yuan, a year-on-year decrease of about 4.39%, while the net profit attributable to the parent company was approximately 1.54 billion yuan, a year-on-year increase of about 189.51% [1]. - For Q2 2025, revenue was approximately 54.86 billion yuan, a year-on-year decrease of about 4.08%, but a quarter-on-quarter increase of about 8.91%. The net profit was approximately 0.49 billion yuan, a year-on-year increase of about 45.06% [1]. Profitability Analysis - In Q2 2025, the company's gross margin was approximately 14.39%, a year-on-year increase of about 0.02 percentage points, but a quarter-on-quarter decrease of about 1.93 percentage points. The net profit margin was approximately 0.65%, a year-on-year increase of about 0.11 percentage points, but a quarter-on-quarter decrease of about 1.44 percentage points [3]. Business Development - The company has established a solid foundation in traditional businesses such as seat armrests and headrests, while the passenger car seat segment has gained recognition from multiple OEMs, including luxury car manufacturers and domestic new energy vehicle leaders [4]. - The company is collaborating with Grammer to advance its global seat business, with production bases in Southeast Asia already operational and European bases under construction as planned [4]. Future Outlook - The company is expected to see revenue growth in the coming years, with projected revenues of approximately 24.48 billion yuan, 28.79 billion yuan, and 31.63 billion yuan for 2025, 2026, and 2027, respectively, representing year-on-year growth rates of approximately 10.0%, 17.6%, and 9.9% [5][7]. - The net profit attributable to the parent company is projected to be approximately 5.57 billion yuan, 9.85 billion yuan, and 12.31 billion yuan for the same years, with significant growth anticipated in 2026 and 2027 [5][7].

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].

Core Viewpoint - The company, Jifeng, has secured new orders for passenger car seats, indicating a stable growth trajectory with a total expected project value exceeding 56 billion yuan from multiple contracts [1][2][3] Group 1: New Orders and Revenue Impact - Jifeng's subsidiary, Jifeng Seats (Hefei), received a project order from a leading OEM for front seat assembly, expected to start mass production in September 2025, with a total project value of 25.2 billion yuan [1][2] - In January 2025, Jifeng secured two additional seat assembly projects worth a combined 31 billion yuan, with production expected to begin in April and May 2026 [2] - The total expected project value from the three seat assembly projects since 2025 exceeds 56 billion yuan, contributing positively to the company's revenue [2][3] Group 2: Financial Performance - In Q1 2025, Jifeng reported total revenue of 50.37 billion yuan, a year-on-year decrease of 4.73%, while net profit attributable to shareholders reached 1.04 billion yuan, a significant increase of 447.56% [1][5] - This marks the first time in 15 quarters that Jifeng's net profit has exceeded 1 billion yuan, indicating a recovery in profitability [5] - The company’s revenue from passenger car seats in 2024 was 28.96 billion yuan, accounting for 13.01% of total revenue, with expectations for further growth in 2025 [3] Group 3: Strategic Developments - Jifeng has been expanding its product offerings and global presence since acquiring the German company Grammer in 2019, which has enhanced its product range in both passenger and commercial vehicle segments [4] - The company is focusing on improving its R&D capabilities, with a notable increase in R&D personnel and expenditures, which rose by 24.59% in 2024 and 40.53% in Q1 2025 [5]

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]