Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [2]. Core Views - The company is a leading player in the precision forging gear industry, actively expanding into new products and markets, particularly in the electric vehicle sector [2][12]. - The company is transitioning from a single gear business to a more comprehensive assembly business, enhancing its product structure and value [2][35]. - The company is also venturing into the lightweight aluminum components for electric vehicles and the robotics sector, which is expected to create a second growth curve [2][3]. Summary by Sections 1. Company Overview - The company has over 30 years of growth, with a rich product matrix including automotive differential gears and components for electric vehicles [12]. - It has a clear shareholding structure and a diversified subsidiary layout, with 10 wholly-owned subsidiaries covering the entire industry chain [21][17]. - The customer base includes major domestic and international OEMs and Tier 1 suppliers, with ongoing efforts to expand into overseas and new energy markets [23][25]. 2. Business Expansion - The company is upgrading from individual gear components to complete differential assemblies, which increases the value per vehicle [2][35]. - The assembly business is projected to generate revenue of 492 million yuan in 2024, a year-on-year increase of 18.84%, becoming the second-largest revenue source [2][35]. 3. Lightweight and Robotics Initiatives - The company is tapping into the lightweight demand driven by the electric vehicle trend, focusing on key components that meet lightweight and low-noise requirements [2][19]. - It is also entering the robotics sector, establishing a joint venture to develop robotic joint components, which is expected to enhance growth opportunities [2][3]. 4. Financial Projections - The projected net profits for 2025-2027 are 153 million, 204 million, and 252 million yuan, respectively, with corresponding growth rates of -4.3%, 33.5%, and 23.5% [2][3]. - The company’s revenue is expected to reach 2.149 billion yuan in 2025, reflecting a growth rate of 6.1% [3][4].

Core Points - The company approved the use of its own funds to pay for part of the "New Energy Vehicle Electric Drive Component Industrialization Project" during its implementation, with plans to later replace these funds with raised capital [2][3] - The company completed a convertible bond issuance in February 2023, raising a total of 980 million yuan, with a net amount of 968 million yuan after deducting issuance costs [2] - As of September 30, 2025, the cumulative investment of the raised funds reached 773 million yuan, achieving an investment progress of 79.86% [2] - The "New Energy Vehicle Electric Drive Component Industrialization Project" has a committed investment of 740 million yuan, with 545 million yuan already invested, representing a progress of 73.61% [2] - The company faced difficulties in directly using raised funds for project payments due to supplier payment policies and contractual agreements, leading to the decision to use its own funds first [3] - The company emphasized that the fund replacement is based on policy requirements and actual operating conditions, which will enhance fund utilization efficiency without affecting the normal implementation of the project [3]

Core Viewpoint - The company plans to optimize resource allocation for its electric drive components industrialization project in the new energy vehicle sector, responding to customer market demand forecasts [1] Group 1: Investment and Expansion - The company intends to further expand the production capacity of Pacific Precision Forging Technology Co., Ltd. [1] - The company plans to increase its investment in the Thai subsidiary by 250 million RMB, with 1% directly from the company and 99% through its wholly-owned subsidiary PPF INDUSTRIAL PTE. LTD. [1] - The investment aims to enhance the production capacity for new energy vehicles and engineering machinery gear shafts [1] Group 2: Corporate Governance - The company will hold its 14th meeting of the 5th Board of Directors on October 21, 2025, to review and approve the proposal for increasing investment in the Thai subsidiary [1]

Core Viewpoint - The company plans to optimize resource allocation for the industrialization project of electric drive components for new energy vehicles, aiming to expand the production capacity of its subsidiary in Thailand [1] Group 1: Investment Details - The company intends to increase its investment in Pacific Precision Forging Technology (Thailand) Co., Ltd. by 250 million RMB [1] - Of the total investment, 1% will be directly invested by the company, while 99% will be invested through its wholly-owned subsidiary PPF INDUSTRIAL PTE. LTD. [1] Group 2: Transaction Nature - The capital increase does not constitute a related party transaction and is not classified as a major asset restructuring [1] - The investment will not have a significant impact on the company's production operations and financial status [1]