Core Viewpoint - The company, Hotway Co., Ltd. (603075), is focusing on expanding its business in three main segments: consumer electric heating components, new energy vehicle heating components, and industrial/commercial heating components, with a strong emphasis on technological development and market expansion [1][2]. Business Segments - The company reported stable growth across all three business segments in the first half of 2025, driven by market expansion, new product development, and optimization of production processes [1]. - The consumer electric heating components segment is increasing its product categories and regional market share [1]. - The new energy vehicle heating components segment is enhancing its technological research and application while expanding its domestic and international customer base [1]. - In the industrial/commercial heating components sector, the company aims to deepen cooperation with leading industry clients and explore different technological applications [1]. Financial Performance - For the first half of 2025, the company achieved a total revenue of 985 million yuan, representing an 8.91% year-on-year increase, and a net profit attributable to shareholders of 161 million yuan, up 14.27% year-on-year [2]. - The second quarter of 2025 saw a revenue of 531 million yuan, a 9.21% increase year-on-year, and a net profit of approximately 91.78 million yuan, reflecting a 9.98% year-on-year growth [2]. - The company's gross profit margin stands at 31.75%, with a debt ratio of 30.47% [2]. Market Expansion and Strategy - The company is actively pursuing an internationalization strategy, with ongoing efforts to expand its overseas business despite challenges such as inflation and high interest rates affecting international revenue growth [1][2]. - The company is evaluating potential new production bases in Europe and North America based on market demand and future developments [2]. Innovation and R&D - The company is committed to continuous investment in smart manufacturing and automation to enhance efficiency [1]. - It plans to apply for new core patents as needed based on development requirements and technological reserves [1]. Product Development - The company is developing energy-saving technologies and compact designs for high-end household electric heating components, including heat pump water heaters and smart kitchen appliances [1].

Investment Rating - The report assigns a "Buy" investment rating for the company, marking the first coverage of the stock [7]. Core Views - The company is positioned to benefit from the dual drivers of new energy and intelligent manufacturing, with steady expansion across multiple business areas [3]. - The demand for electric heating components is expected to grow significantly due to the rapid increase in new energy vehicle production and sales, which are projected to reach 12.89 million units in 2024, reflecting a year-on-year growth of 34.4% [3]. - The company has established itself as a primary supplier of thermal management systems for new energy vehicles, leveraging various heating technologies to meet the green and low-carbon trends [3]. Summary by Sections Market Performance - The company's stock performance is compared against the CSI 300 index, indicating a positive trend [2]. Business Dynamics - In 2024, the company's revenue from electric heating components for new energy vehicles reached 157 million yuan, a year-on-year increase of 28.95%, with a gross margin of 31.61% [4]. - The production volume of electric heating components for new energy vehicles reached 3.05 million units, a 90.63% increase year-on-year, while the shipment volume was 2.52 million units, up 45.66% year-on-year [4]. - The company has deepened collaborations with several global clients, enhancing its international and diversified customer base [4]. Capacity and Profitability - The company has established production capacity in Zhejiang and Thailand, utilizing flexible manufacturing and automation to improve delivery capabilities [5]. - The gross margin for the electric heating components business improved to 30.72% in 2024, an increase of 0.7 percentage points from 2023, with net profit growing by 19.90% year-on-year [5]. - In Q1 2025, the company reported revenue of 454 million yuan, a year-on-year increase of 8.56%, and a net profit of 68.82 million yuan, up 20.54% year-on-year [5]. Earnings Forecast - The company is projected to achieve revenues of 2.122 billion yuan, 2.340 billion yuan, and 2.554 billion yuan for the years 2025, 2026, and 2027, respectively [9]. - The earnings per share (EPS) are forecasted to be 0.90 yuan, 1.04 yuan, and 1.17 yuan for the same years, with corresponding price-to-earnings (P/E) ratios of 23.5, 20.2, and 18.0 [7][9].