Core Viewpoint - The report highlights the financial performance and operational status of Electric Connector Technology Co., Ltd. for the first half of 2025, indicating a significant increase in revenue but a decline in net profit due to various operational costs and market conditions [2][4]. Company Overview and Financial Indicators - The company reported a revenue of approximately 2.524 billion yuan, representing a year-on-year increase of 17.71% compared to 2.144 billion yuan in the same period last year [4][20]. - The net profit attributable to shareholders decreased by 19.07%, amounting to approximately 238.67 million yuan, down from 294.93 million yuan in the previous year [4][20]. - Basic earnings per share fell by 21.92% to 0.57 yuan from 0.73 yuan [4][20]. - Total assets increased slightly by 0.59% to approximately 7.458 billion yuan from 7.415 billion yuan at the end of the previous year [4][20]. Business Operations - The company specializes in micro electrical connectors and interconnection systems, with a focus on high-reliability and high-performance products, particularly in the smartphone and automotive sectors [8][10]. - The global smartphone market showed a weak recovery in the first half of 2025, with shipments reaching approximately 551.5 million units, a slight increase of 970,000 units year-on-year [6][8]. - The domestic automotive market experienced significant growth, with production and sales reaching 15.62 million and 15.65 million units, respectively, marking year-on-year increases of 12.5% and 11.4% [8][10]. Market Position and Competitive Advantage - The company is recognized as a leading supplier of micro RF connectors and interconnection systems in China, having established itself within the supply chains of major smartphone brands and automotive manufacturers [15][18]. - The automotive connector product line has seen substantial growth, particularly in the context of the increasing demand for electric vehicles and advanced driver-assistance systems [16][18]. - The company holds 592 domestic and international patents, showcasing its strong research and development capabilities [18][20]. Financial Performance Analysis - Operating costs increased by 25.61% to approximately 1.782 billion yuan, driven by business expansion and rising operational costs [20][21]. - Research and development expenses slightly decreased by 3.35% to approximately 209.28 million yuan, reflecting the company's focus on maintaining competitive product offerings [20][21]. - The company reported a net cash inflow from operating activities, indicating healthy cash flow management despite increased costs [20][21].

Investment Rating - The investment rating for the company is "Buy" (首次) [3] Core Views - The company is positioned as a pioneer in domestic substitution for automotive connectors, benefiting from the trends of intelligent driving and consumer recovery [1] - The company has seen significant growth in both its automotive and consumer electronics connector businesses, with a stable market position and increasing orders [2][5] - The company plans to expand its production capacity and enhance its core competitiveness in response to the growing demand in the 5G millimeter-wave and AI mobile phone markets [6][8] Summary by Relevant Sections Financial Performance - In 2024, the company achieved revenue of 4.661 billion yuan, a year-on-year increase of 48.97%, and a net profit of 622 million yuan, up 74.73% year-on-year [5][10] - For Q1 2025, the company reported revenue of 1.196 billion yuan, a 15.02% increase year-on-year, but a net profit decline of 23.80% [10] Revenue Projections - The company expects total revenue to reach 5.909 billion yuan in 2025, with a year-on-year growth rate of 26.8%, and net profit to be 798 million yuan, growing by 28.2% [7][19] - Revenue from automotive connectors is projected to grow significantly, with estimates of 23.67 billion yuan in 2025, reflecting a 62% year-on-year increase [18] Market Position and Strategy - The company has established itself as a core supplier for major smartphone brands, including Xiaomi, Oppo, and Huawei, and is expanding its presence in the automotive sector with leading domestic manufacturers [2][9] - The company is actively developing applications for its products in the AI sector, aiming to capture growth opportunities in AI servers and related technologies [8][16] Product Segmentation - The company’s product lines include RF connectors, high-speed connectors, and electromagnetic compatibility components, with a focus on both mobile and automotive applications [5][11] - The company is expanding its BTB product line, leveraging its existing resources and market trends to enhance revenue growth [2][15]

Core Viewpoint - Huajin Securities recently initiated coverage on Dalian Technology (300679) with a "buy" rating, highlighting its role as a pioneer in domestic automotive connector replacement and its growth driven by intelligent driving and consumer recovery [1] Investment Highlights - The company focuses on providing stable and efficient electronic and circuit connection products, particularly in RF signal transmission and shielding, applicable in smart mobile terminals, fuel and new energy vehicles, IoT modules, and smart home appliances [2] - In 2024, the company is projected to achieve revenue of 4.661 billion yuan, a year-on-year increase of 48.97%, and a net profit of 622 million yuan, up 74.73% [2] - For Q1 2025, the company reported revenue of 1.196 billion yuan, a 15.02% increase year-on-year, but a net profit decline of 23.80% to 123 million yuan [2] Automotive Sector Growth - The acceleration of electric and intelligent vehicle development is driving rapid growth in the company's automotive connector business, with significant demand for RF, high-speed, and high-voltage connectors [3] - The company has established a strong presence in the RF connector market, supplying major domestic automakers and focusing on enhancing its product offerings in intelligent driving solutions and laser radar collaborations [3] Consumer Electronics Recovery - The consumer electronics sector is showing signs of recovery, with the company benefiting from increased demand for both mobile and non-mobile electronic connectors [4] - The company has become a core supplier for major smartphone brands, maintaining a stable market share and profitability in the RF connector segment [4] - The company is expanding its BTB product line, leveraging its existing market channels and aiming for significant revenue growth in the coming years [4] AI Applications - The company is actively exploring applications for its high-frequency and high-speed connectors in the AI sector, particularly in humanoid robots and AI data centers [5] - Collaborations with upstream chip manufacturers and machine design firms are planned to capitalize on the growing market for AI-related products [5] Financial Projections - Revenue forecasts for 2025, 2026, and 2027 are 5.909 billion yuan, 7.398 billion yuan, and 9.043 billion yuan, with year-on-year growth rates of 26.8%, 25.2%, and 22.2% respectively [6] - Corresponding net profits are projected to be 798 million yuan, 1.012 billion yuan, and 1.270 billion yuan, with growth rates of 28.2%, 26.8%, and 25.5% [6]