Core Viewpoint - The company held a half-year performance briefing on September 4, 2025, to discuss its financial results and address investor inquiries regarding its business operations and future strategies [1]. Group 1: Performance and Financials - The company's automotive safety business achieved a gross profit margin of approximately 15.9% in the first half of 2025, an increase of about 2.0 percentage points year-on-year, driven by order price growth and economies of scale [2]. - The company is implementing cost improvement measures, including optimizing raw materials and vertically integrating the supply chain, with plans to expand its gas generator production base in Huzhou, Zhejiang, to increase self-supply of core components [2]. - The company aims to continue enhancing its gross profit margin in the automotive safety sector through various profitability measures and by optimizing global production capacity [2]. Group 2: Robotics Business Development - The company is providing key components and integrated solutions for humanoid robots to global automotive and robotics companies, with significant collaborations established with leading domestic clients [2]. - The company has initiated the development of customized robotic domain controllers based on NVIDIA's Jetson Thor chip, which is expected to enhance its product line [4]. - The company is focusing on Tier 1 clients in the robotics sector, including both automotive companies and various robotics firms, to expand its customer base [4]. Group 3: Debt Management and Future Plans - The company reported an increase in interest-bearing debt due to optimizing liquidity and financing structure, while also addressing the impact of currency fluctuations on its debt levels [2]. - The company is actively working to improve its asset-liability structure and reduce debt costs through refinancing strategies, with expectations of a decrease in interest-bearing debt as operational cash flow improves [2]. Group 4: Market Expansion - The company submitted an application for the issuance and listing of H shares on the Hong Kong Stock Exchange on August 7, 2025, and is actively progressing with this initiative [2].

Core Viewpoint - Huamao Technology (603306) reported a solid performance in the first half of 2025, with revenue and net profit growth, indicating a strong position in the automotive passive safety sector and ongoing strategic initiatives for expansion and innovation [1][2][4]. Financial Performance - In the first half of 2025, Huamao Technology achieved operating revenue of 1.108 billion yuan, a year-on-year increase of 14.42% - The company reported a net profit attributable to shareholders of 137 million yuan, up 3.21% year-on-year - The non-recurring net profit reached 125 million yuan, reflecting a growth of 24.53% year-on-year - Basic earnings per share were 0.44 yuan, an increase of 7.32% year-on-year [1]. Core Business Growth - Huamao Technology maintained its leading position in the automotive passive safety sector, with core business segments showing steady growth - Sales revenue from airbag bags reached 734 million yuan, a year-on-year increase of 12.95% - Sales from woven airbags were 487 million yuan, up 10.96% year-on-year, while OPW business generated 247 million yuan, a growth of 17.07% - Sales of airbag fabric amounted to 293 million yuan, reflecting a significant increase of 32.96% year-on-year - The implementation of new automotive safety regulations is expected to drive structural growth in global airbag installation rates [2]. Technological Innovation - Huamao Technology obtained a patent for a "sewing machine bottom line winding device for airbag bags," enhancing production efficiency and product safety - The company is advancing research in lightweight materials and carbon composite materials to meet the carbon reduction demands of new energy vehicles - R&D expenses for the first half of 2025 reached 55.3852 million yuan, a year-on-year increase of 23.92% - The company holds 119 authorized patents, including 12 invention patents [3]. Overseas Strategy - The establishment of Huamao Technology's subsidiary in Vietnam marks a significant step in its global expansion strategy, focusing on airbag bags and OPW products for Southeast Asia, Asia-Pacific, and European markets - The Vietnam base is projected to achieve an annual output value of approximately 2 billion yuan - In the first half of 2025, the Vietnam base generated sales revenue of about 125 million yuan, a year-on-year increase of 3.31% - The company employs a "localized production + global R&D" model to integrate deeply into the international supply chain [4]. M&A and Growth Potential - Huamao Technology invested 395.361 million yuan to acquire a 42.16% stake in Shenzhen Fuchuang Youyue Technology Co., Ltd., a company specializing in electronic manufacturing services - The company plans to acquire the remaining 57.84% stake through a major asset restructuring, which is expected to create synergies in electronic manufacturing and new material research - Fuchuang Youyue provides ODM solutions for top global brands, enhancing Huamao Technology's capabilities in smart maritime communication technology [5]. Future Outlook - With the increasing penetration of new energy vehicles, stricter global safety regulations, and the integration of AI technology, Huamao Technology is poised to maintain its leadership in the automotive passive safety sector - The release of capacity from the Vietnam base, synergies from Fuchuang Youyue, and breakthroughs in new material research are expected to open new growth opportunities for the company [6].

Investment Rating - The report maintains a "Strong Buy" rating for the company [4][8]. Core Insights - The company is solidifying its position in the automotive safety sector while actively expanding into the semiconductor and computing power manufacturing fields, aligning with national strategic initiatives and high-quality development goals [1][3]. - The company has a market share exceeding 35% in the domestic automotive safety airbag industry and is expanding its overseas market presence, particularly in Southeast Asia through its Vietnam production base [4][2]. - The company is strategically investing in the semiconductor sector by acquiring a significant stake in Fuchuang Youyue, aiming for a complete acquisition to enhance its growth potential in this area [3][4]. Summary by Sections Strengthening Passive Safety Business and Embracing Overseas Markets - The company focuses on high-end, localized, and new energy directions for its automotive passive safety products, with a projected revenue of approximately 2.58 billion RMB from its Vietnam operations in 2024, reflecting a year-on-year growth of 32.23% [2][4]. - The company has established a stable production base in Vietnam, with 37 projects certified for mass production and 5 awaiting certification, targeting markets in Southeast Asia, Japan, South Korea, and India [2][4]. Entering the Computing Power Manufacturing Field - The company has invested a total of 383.36 million RMB in Fuchuang Youyue, acquiring a 42.16% stake, and plans to increase its ownership to 100% through a combination of cash and stock issuance [3][4]. - The company aims to enhance its business layout in the semiconductor and computing power sectors, focusing on integrating the supply chain and increasing investments in these areas [3][4]. Profit Forecast and Investment Recommendations - The company is projected to achieve a net profit of 497 million RMB in 2025, with a significant year-on-year growth of 79% [9][4]. - The report highlights the company's robust financial performance, with a total revenue forecast of 2.935 billion RMB for 2025, reflecting a 33% increase from the previous year [9][4].