Core Viewpoint - The company, Tonglian Precision (688210), reported stable revenue growth in the first half of 2025, with a focus on R&D investment and expanding its capabilities in precision manufacturing, particularly in lightweight materials and advanced manufacturing processes [1][2][10]. Financial Performance - In the first half of 2025, the company achieved revenue of 402,080,771.08 yuan, a year-on-year increase of 10.01%. The net profit attributable to shareholders was 4,873,119.94 yuan, with a non-GAAP net profit of 27,059,973.41 yuan [1][10]. - The company’s net profit saw a significant decline of 88.24% year-on-year, primarily due to increased management expenses and the impact of stock incentive plans [7][10]. R&D Investment - The company invested 50,150,207.07 yuan in R&D during the first half of 2025, accounting for 12.47% of its revenue. The focus areas included lightweight materials and advanced manufacturing processes [2][9]. - The R&D efforts are aimed at meeting the demand for lightweight and high-performance components, particularly in titanium, magnesium, aluminum alloys, and carbon fiber [2][9]. Competitive Advantages - The company maintains a competitive edge through its focus on customer needs, technological innovation, and efficient management practices. Key advantages include process innovation, product layout, production control, and high automation levels [3][9]. Business Expansion - The company is diversifying its manufacturing capabilities beyond Metal Injection Molding (MIM) to include various precision component manufacturing techniques such as CNC machining and laser processing, responding to diverse customer demands [4][5]. - The new factories in Hunan and Vietnam are being developed to support both MIM and non-MIM production, with equipment purchases and production ramp-up based on customer needs [5]. Industry Outlook - The industry is experiencing a shift towards lightweight materials in consumer electronics, driven by advancements in AI technology and the demand for portable devices. This trend is expected to create new growth opportunities [8][9]. - The company is strategically positioned to leverage these trends by focusing on innovative materials and manufacturing processes, enhancing its collaboration with customers [8][9].

Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [5][9]. Core Views - The company is recognized as a national-level "little giant" in precision injection molded parts, with expected capacity release in 2026 to support new products and expansion into new fields [5]. - The company has made a strategic investment in Moxun Technology, which focuses on the development and manufacturing of brushless motors and automotive actuators, enhancing production capabilities and synergies [6]. - The company has established strong relationships with leading automotive brands, including BYD, Huawei, and Tesla, and has seen significant growth in its new energy vehicle parts business, which accounted for 30% of sales in 2024 [6][9]. Financial Performance - In 2024, the company is projected to achieve revenue of 286 million yuan, a year-on-year increase of 23.63%, and a net profit of 63 million yuan, reflecting a growth of 56.86% [8]. - The company’s revenue and net profit forecasts for 2025 are 364 million yuan and 80 million yuan, respectively, with corresponding growth rates of 27.21% and 28.47% [9]. - The earnings per share (EPS) are expected to increase from 0.94 yuan in 2024 to 1.21 yuan in 2025, indicating a positive growth trajectory [9]. Market Position and Strategy - The company is a leader in the domestic market for precision injection molded parts, with a market share increase from 25% to 30% for key products like wiper motor gears [6]. - The company is actively expanding its international market presence, with exports to countries such as France, Mexico, and Germany, achieving export revenue of 38.36 million yuan in 2024 [6]. - The company is committed to digital transformation and smart manufacturing, having established intelligent production workshops and implemented advanced manufacturing technologies [6].