Core Viewpoint - Tsugami Machine Tool China (01651) has seen a significant increase in stock price, rising over 8% and reaching 32.78 HKD, with a trading volume of 77.4634 million HKD, following the announcement of share buybacks and positive market outlook from CICC [1] Group 1: Company Performance - On September 26, Tsugami Machine Tool China announced a share buyback of 150,000 shares at a cost of 4.65614 million HKD [1] - Year-to-date, the company has conducted 48 buybacks, totaling 6.898 million shares and an aggregate amount of 151 million HKD [1] Group 2: Market Position and Outlook - CICC has initiated a "outperform industry" rating for the company, highlighting its strong competitive edge in the mid-to-high-end CNC lathe market [1] - The market has not fully recognized the growth potential in liquid cooling and robotics, which CICC views as significant opportunities for the company [1] - The company is actively expanding into AI liquid cooling connector processing, humanoid robot screw and reducer processing, indicating a strategic focus on emerging technologies [1] - Potential catalysts for growth include advancements in liquid cooling infrastructure and humanoid robot grinding machines [1]

Investment Highlights - The company is covered for the first time by CICC with an "outperform" rating and a target price of HKD 38.60, based on a P/E valuation method corresponding to FY2026 at 13x P/E [1] - The company is a leading player in the high-end CNC lathe market, with strong internal competitiveness [1] Business Performance - Established in 2003, the company is rooted in China's manufacturing sector, with a stable growth in its main business. The company is primarily focused on lathes (Swiss-type lathes) and supplemented by machining centers and grinding machines [1] - For FY2025 (Q2 2024 to Q1 2025), the company expects revenue of CNY 4.262 billion and a net profit attributable to shareholders of CNY 780 million, representing year-on-year growth of 36.6% and 63% respectively [1] Market Position and Expansion - The metal cutting machine tools are long-lasting general-purpose equipment, with demand influenced by capital expenditures in the automotive and general manufacturing sectors. The cumulative growth rate of metal cutting output in China from January to August 2025 is 14.6%, indicating a recovery in the industry [1] - The CNC machine tool market in China is projected to be CNY 71.5 billion in 2024, with the company holding a market share of 4.1% (by revenue), ranking first in the lathe market [1] - In March 2025, the company announced the construction of its sixth factory in Pinghu, which is expected to add approximately 3,000 units of assembly capacity per year [1] Profitability and Dividends - The company has shown significant growth in profitability, maintaining a dividend payout ratio of over 40% since FY2023, reflecting stable operational quality [2] New Growth Areas - Since 2024, the company has actively expanded into AI liquid cooling connector processing and humanoid robot components, such as lead screws and reducers [2] - The market has not fully recognized the incremental potential of liquid cooling and robotics, but the company remains optimistic about the opportunities these sectors present [2] Earnings Forecast and Valuation - The company forecasts EPS of CNY 2.6 and CNY 3.1 for FY2026 and FY2027 respectively, with a CAGR of 22%. The target price of HKD 38.60 corresponds to a P/E of 13x for FY2026, with current prices reflecting P/E ratios of 11x and 10x for FY2026 and FY2027 respectively, indicating a potential upside of 17.1% [2]

智通财经就APP获悉，中金发布研报称，预计津上机床中国(01651)FY2026/2027年EPS分别为2.6/3.1 元，CAGR为22%，给予公司目标价38.6港元，对应FY2026年P/E为13x，现价对应FY2026/2027年P/E为 11/10x，对应涨幅空间17.1%，，公司是中高端数控车床领军企业，内生竞争力突出，首次覆盖给予"跑 赢行业"评级。市场暂未充分重视液冷、机器人的增量潜力，而该行坚定看好其带来的机会。 中金主要观点如下： 扎根中国制造业，主营增长稳健 公司2003年成立，控股股东为日本津上集团，形成车床(走心机)为主，加工中心、磨床为辅的产品矩 阵。2025FY(2024Q2-2025Q1)公司营收42.62亿元，归母净利润7.8亿元，同比增长36.6%/63%。 积极扩产，巩固龙头优势 盈利能力大幅增长，高分红回馈投资者 公司长期以来经营质量(如存货周转、收现比等)稳健，自FY2023以来，公司分红率维持在40%以上。 液冷连接器&人形机器人助力，打开第二成长 2024年以来公司积极布局AI液冷连接器加工、人形机器人丝杠、减速器加工等领域。潜在催化剂：液 冷基建、人形机器人磨床进 ...

Industry Trends - The machine tool industry is experiencing accelerated domestic substitution and internationalization, with imports slowing and exports growing rapidly. Domestic companies are achieving breakthroughs in sectors like new energy vehicles and consumer electronics, supported by policies that enhance market share and open overseas markets [2][3]. - The demand for machine tools is bolstered by policy support and a strong recovery in manufacturing, with significant growth in metal cutting machine tool production expected from 2023 to 2024 [3]. - The CNC (Computer Numerical Control) rate is increasing, presenting growth opportunities for CNC machine tool companies, as China's CNC rate is currently lower than that of developed countries [3][4]. - Market competition is intensifying, with market share concentrating among leading companies due to their advantages in capacity expansion, high-end technology development, and brand strength [3][4]. Company Performance - In the first half of 2025, the company reported strong sales performance, with the general equipment sector contributing approximately 36% to total revenue, showing a nearly 10% year-on-year growth [3][4]. - The consumer electronics sector has seen a dramatic increase, with revenue share rising from about 5% two years ago to over 20% in the first half of 2025, reflecting a growth of approximately 190% [3][4]. - The automotive parts sector, primarily driven by new energy vehicles, accounted for around 14% of revenue, with a year-on-year growth of about 60% [3][4]. - The mold industry contributed approximately 8% to revenue, with a significant year-on-year growth of around 160% [3][4]. - The engineering machinery sector, after several years of decline, has rebounded with a year-on-year growth of about 170%, contributing around 5% to total revenue [3][4]. Seasonal Characteristics - The machine tool industry does not exhibit strict seasonal characteristics, with the company's performance showing minor fluctuations across quarters. This stability is attributed to diverse downstream sectors and effective capacity planning [4][5]. Competitive Strategy - The concentration of market share among leading firms is a natural outcome of industry upgrades. The company leverages its platform advantages, product reputation, and technological expertise to build a differentiated competitive edge [5][6]. - The company has established a comprehensive product lineup in metal cutting machine tools and possesses a strong R&D team of over 250 personnel, enabling rapid responses to market demands [6][7]. - A robust sales service system with over 300 personnel ensures efficient customer service and tailored solutions, enhancing operational efficiency through integrated R&D, design, and production processes [6][7]. Liquid Cooling Market - The demand for liquid cooling plates, essential for AI servers and new energy vehicles, is rapidly increasing. The company's products, such as high-speed drilling and vertical machining centers, meet the high precision and efficiency requirements for liquid cooling plate processing [6][7]. - The company is actively enhancing its sales team to address the liquid cooling market needs and is optimizing equipment performance to align with technological advancements in liquid cooling processing [7].

Core Viewpoint - The implementation of a new round of large-scale equipment updates is a crucial measure to promote high-quality development, expand effective investment, facilitate industrial upgrades, promote green development, and improve people's lives [8]. Policy Support and Financial Mechanisms - The equipment update policy provides support of up to 15% of total investment in key industrial sectors, with energy-using equipment receiving up to 20% [10]. - The central government provides interest subsidies of 1.5 percentage points on bank loans for eligible entities, while local and central finances share the costs for scrapping and updating old vehicles and agricultural machinery [10]. - The People's Bank of China has established a re-lending program for technological innovation and equipment upgrades, with a total quota of 800 billion yuan [10]. Implementation and Accessibility - The application process for subsidies is streamlined, with companies reporting quick approval times for funding, often within 20 days [13]. - Local governments have tailored initiatives, such as Jiangsu's "Transport Loan" program, which has seen significant uptake and financial benefits for companies [12]. Impact on Investment and Growth - The equipment update policy has led to a notable increase in investment, with over 20 million units of equipment expected to be updated by 2024, and a 15.2% year-on-year increase in equipment investment from January to July [15]. - The policy has significantly accelerated the pace of industrial transformation and upgrading, with companies reporting improved production efficiency and cost savings [16][17]. Environmental and Social Benefits - The policy also emphasizes green initiatives, with significant updates to energy-efficient equipment and the scrapping of older, less efficient vehicles [18][20]. - The equipment update initiative includes public infrastructure improvements, such as the replacement of aging elevators and water supply systems, benefiting millions of residents [20][21]. Circular Economy and Standards Enhancement - The promotion of large-scale equipment updates is linked to the development of a circular economy, with a focus on recycling and re-manufacturing, contributing to a growing industry valued at nearly 200 billion yuan [24]. - The enhancement of standards is crucial for guiding equipment updates towards higher efficiency and sustainability, with numerous national standards being revised to support this initiative [25].

Core Insights - The implementation of a new round of large-scale equipment updates is a significant measure to promote high-quality development, expand effective investment, facilitate industrial upgrading, promote green development, and improve people's lives [1] Policy Impact - The large-scale equipment update policy has led to substantial outcomes, with the National Development and Reform Commission stating that by 2025, special long-term bonds will support approximately 8,400 projects, driving total investment exceeding 1 trillion yuan [1][3] - The support for equipment updates in key industrial sectors can reach up to 15% of total investment, with energy-using equipment support potentially reaching 20% [4][9] Financial Support - Central fiscal policies provide interest subsidies of 1.5 percentage points on bank loans for eligible entities undertaking equipment updates, with local and central governments sharing the funding burden [4] - The People's Bank of China has established a re-lending program for technological innovation and equipment upgrades, with a total quota of 800 billion yuan [4] Local Initiatives - Local governments have creatively implemented policies, such as Jiangsu's "Transportation Loan" fiscal interest subsidy, benefiting various transportation projects with significant financial support [5] Application Process - The application process for subsidies is streamlined, with companies reporting quick approval times for funding, enhancing participation in the equipment update program [6][7] Industry Transformation - The equipment update policy has accelerated industrial transformation, with significant increases in automation and efficiency reported across various sectors, such as automotive and manufacturing [10] - The digital transformation of industrial enterprises has also seen a notable rise, with the penetration rate of digital design tools reaching 85.4% [10] Environmental Focus - The equipment updates are aligned with green initiatives, including the replacement of old transformers and the promotion of energy-efficient vehicles, contributing to sustainability goals [11][12] Public Benefits - The policy extends to public infrastructure, with significant funding allocated for the replacement of aging elevators and improvements in water supply systems, enhancing community welfare [14][15] Recycling and Standards - The initiative includes a focus on recycling and the enhancement of standards, with the re-manufacturing industry seeing substantial growth and the establishment of new standards to guide equipment updates [16][18] Future Directions - The National Development and Reform Commission plans to continue coordinating efforts to ensure effective project implementation and fund management, aiming to maximize the impact of the equipment update policies [19]

Core Insights - The implementation of a large-scale equipment update is a significant measure to promote high-quality development, expand effective investment, facilitate industrial upgrading, and enhance green development [10] - The special bonds issued to support equipment updates have led to a total investment exceeding 1 trillion yuan, with approximately 8,400 projects supported [10] Policy Impact - The equipment update policy provides substantial support, with funding covering up to 15% of total investment in key industrial sectors [12] - The policy has resulted in significant financial benefits for companies, such as a transportation company saving nearly 100,000 yuan when updating old trucks [12][16] - Financial support includes interest subsidies on bank loans, with the central government covering a significant portion of costs for old vehicle scrapping and new energy vehicle purchases [13] Implementation and Accessibility - The application process for subsidies has been streamlined, allowing companies to receive funding quickly, often within 20 days [16] - Local governments have creatively adapted policies to suit regional needs, such as Jiangsu's "transport loan" program, which has significantly reduced financing costs for transportation companies [15] Economic Growth and Investment - The equipment update policy has contributed to stabilizing investment and growth, with a reported 15.2% year-on-year increase in equipment investment from January to July 2024 [18] - The total number of equipment updates in key sectors is expected to exceed 20 million units in 2024, indicating a robust response to the policy [18] Technological Advancement - Companies are increasingly adopting automation and intelligent equipment, leading to improved production efficiency and cost savings [19] - The policy has facilitated the digital transformation of industrial enterprises, with a significant increase in the adoption of digital design tools and CNC technology [20] Environmental Focus - The equipment update initiative emphasizes green technology, with significant progress in replacing outdated energy-consuming equipment [21] - The National Grid has completed energy efficiency upgrades for over 240,000 transformers, enhancing energy conservation efforts [22] Community Benefits - The policy extends to public infrastructure, with substantial funding allocated for updating residential elevators and improving public utilities, benefiting millions of households [23] - The initiative aims to enhance the quality of life for citizens by addressing aging infrastructure in essential services [24] Circular Economy and Standards - The promotion of recycling and circular economy practices is integral to the equipment update strategy, with significant advancements in the re-manufacturing industry [25][26] - The establishment of new standards for equipment efficiency and performance is underway, supporting the transition to high-quality development [28]

Core Viewpoint - The implementation of a new round of large-scale equipment updates is a crucial measure to promote high-quality development, expand effective investment, facilitate industrial upgrades, drive green development, and improve people's lives. Since the launch of the "Two New" initiative last year, large-scale equipment updates have been continuously effective, with approximately 8,400 projects supported by special long-term bonds, leading to a total investment exceeding 1 trillion yuan [1]. Policy Impact - The equipment update policy has shown significant results in stabilizing investment, growth, and promoting transformation. In 2024, the total number of equipment updates in key areas nationwide is expected to exceed 20 million units. From January to July this year, investment in equipment and tools increased by 15.2% year-on-year, outpacing overall investment growth by 13.6 percentage points, contributing to a 2.2 percentage point increase in total investment [9][10]. Financial Support - The special long-term bonds are led by the National Development and Reform Commission to support key equipment update projects and high-level recycling projects. Central finance provides interest subsidies of 1.5 percentage points on bank loans for eligible entities. The funding for scrapping and updating old operational vehicles and agricultural machinery is shared between central and local governments, with varying support ratios across regions [4]. Local Initiatives - Local governments have creatively implemented the equipment update policy. For instance, Jiangsu Province introduced "Transportation Loans" with fiscal interest subsidies, benefiting various projects and significantly reducing financing costs [5]. Application Process - The application process for enjoying the policy benefits is straightforward and efficient. Companies have reported quick approval times for subsidy applications, with some receiving funds within two months [6][7]. Technological Upgrades - The equipment updates are not merely about replacing old with new but also involve significant technological advancements. For example, companies have reported increased production efficiency and cost savings due to the adoption of automated and intelligent equipment [10][18]. Environmental Focus - A significant aspect of the equipment updates is the focus on green initiatives. The National Grid has completed energy efficiency upgrades for over 240,000 transformers, and the transportation sector has seen the elimination of over 260,000 old diesel trucks [11][13]. Community Benefits - The equipment update policy also aims to enhance public welfare, with funding supporting the replacement of aging infrastructure such as elevators and water supply systems, benefiting millions of residents [14][15]. Recycling and Standards - The policy promotes recycling and the establishment of higher standards. The re-manufacturing industry has seen significant growth, with annual output reaching nearly 200 billion yuan, and the introduction of new standards is expected to drive further advancements in equipment updates [16][18]. Future Directions - The National Development and Reform Commission plans to continue coordinating efforts to ensure effective project implementation and fund management, aiming to maximize the impact of the "Two New" policy [19].

Core Insights - The implementation of a new round of large-scale equipment updates is a significant measure to promote high-quality development, expand effective investment, facilitate industrial upgrades, drive green development, and improve people's lives [1] Policy Impact - The large-scale equipment update policy has led to substantial outcomes, with the National Development and Reform Commission reporting that by 2025, special long-term bonds will support approximately 8,400 projects, driving total investments exceeding 1 trillion yuan [1][3] - The support for equipment updates can reach up to 15% of total investment in key industrial sectors, with some projects receiving even higher support [3][4] Financial Support - The central government provides interest subsidies of 1.5 percentage points on bank loans for eligible equipment updates, with local and central finances sharing the burden for scrapping old vehicles and machinery [4] - The People's Bank of China has established a re-lending program for technological innovation and equipment upgrades, with a total quota of 800 billion yuan [4] Local Initiatives - Local governments have creatively implemented policies, such as Jiangsu's "Transportation Loan" fiscal interest subsidy, benefiting numerous projects and significantly reducing financing costs [5] Application Process - The application process for subsidies is streamlined, with many companies reporting quick approval times for funding, enhancing participation in the program [6][7] Industry Transformation - The equipment update policy has accelerated industrial transformation, with significant investments leading to improved production efficiency and cost savings for companies [9][10] - The digital transformation of enterprises is evident, with a high percentage of industrial companies adopting digital design tools and automated processes [10] Environmental Focus - The equipment updates also emphasize green initiatives, with significant progress in replacing old vehicles and machinery with energy-efficient alternatives [11][13] Public Benefits - The policy extends to public infrastructure, with substantial funding allocated for updating essential services like elevators and water supply systems, directly benefiting residents [14][15] Recycling and Standards - The initiative includes a focus on recycling and circular economy practices, with the re-manufacturing industry seeing significant growth [16][17] - Upgrading standards for equipment is crucial for ensuring high-quality development and energy efficiency, with numerous national standards being revised [18] Future Directions - The National Development and Reform Commission plans to enhance coordination and management of projects to ensure effective use of funds and maximize the impact of the equipment update policy [19]

Core Viewpoint - The implementation of a new round of large-scale equipment updates is a crucial measure to promote high-quality development, expand effective investment, facilitate industrial upgrades, drive green development, and improve people's lives. Since the launch of the "Two New" initiative last year, large-scale equipment updates have been continuously effective, with approximately 8,400 projects supported by special long-term bonds by 2025, leading to a total investment exceeding 1 trillion yuan [1]. Policy Impact - The equipment update policy has shown significant results in stabilizing investment, growth, and promoting transformation. In 2024, the total number of equipment updates in key areas nationwide is expected to exceed 20 million units. From January to July this year, investment in equipment and tools increased by 15.2% year-on-year, outpacing overall investment growth by 13.6 percentage points, contributing to a 2.2 percentage point increase in total investment [9][10]. Financial Support - The special long-term bonds are led by the National Development and Reform Commission to support key equipment update projects and high-level recycling projects. Central fiscal policies provide interest subsidies of 1.5 percentage points on bank loans for eligible entities. The funding for scrapping and updating old operational vehicles and agricultural machinery is shared between central and local governments, with varying support ratios across regions [4][5]. Local Initiatives - Various regions have creatively implemented the equipment update policy. For instance, Jiangsu Province introduced "Transportation Loans" with fiscal interest subsidies, benefiting local companies significantly. As of July this year, Jiangsu's cooperative banks had issued 100 "Transportation Loan" projects, amounting to 6.783 billion yuan in loans with over 70 million yuan in interest subsidies [5]. Application Process - The application process for enjoying the equipment update policy is straightforward and efficient. Companies have reported quick approval times for subsidy applications, with some receiving funds within two months of application [6][7]. Environmental Focus - The equipment updates also emphasize green initiatives. For example, the State Grid has completed energy efficiency upgrades for over 240,000 transformers, increasing the proportion of transformers with energy efficiency ratings of level 2 and above to 10% [12][13]. Community Benefits - The equipment update policy not only focuses on industrial upgrades but also enhances public welfare. For instance, the government has allocated 6.2 billion yuan in 2024 to support the update of 41,000 old residential elevators, benefiting nearly 1.7 million households [14]. Recycling and Standards - The promotion of large-scale equipment updates involves two critical aspects: recycling and standard enhancement. The re-manufacturing industry has seen its annual output value rise to nearly 200 billion yuan, with significant improvements in recycling rates for core products [16][17]. Additionally, the introduction of advanced technology and production processes is driving equipment towards higher-end, intelligent, and green development, supported by updated national standards [18].