Core Viewpoint - The financial performance of Tsugami China serves as a significant indicator of the machine tool industry's recovery, with strong revenue growth and profitability reflecting a resurgence in demand from downstream sectors, particularly the automotive industry [1][5][7]. Financial Performance - For the fiscal year 2025, Tsugami China reported revenue of 4.262 billion RMB, a year-on-year increase of 36.6%, and a net profit growth of 63% [1][7]. - The company's gross profit rose by 57.5% to 1.41 billion RMB, with a gross margin of 33.1%, up 4.4 percentage points from the previous year [7]. Revenue Breakdown - The precision lathe business generated 3.624 billion RMB, accounting for 85.1% of total revenue, with a year-on-year increase of 36.5% [4]. - Revenue from the automotive sector surged by 69% to 1.83 billion RMB, significantly contributing to domestic revenue growth [5][8]. - Other sectors, including pneumatic, hydraulic, and 3C industries, also showed positive growth, with respective increases of 33%, 26%, and 26% [5]. Market Trends - The machine tool industry is experiencing a recovery, with increased demand noted from March and April 2024, indicating a shift towards an upward market cycle [3][8]. - Tsugami China has successfully expanded into new industries, including humanoid robotics and AI applications, which are expected to drive future growth [9][10]. Strategic Initiatives - The company has implemented cost-reduction and efficiency-enhancement measures across its operations, contributing to its competitive edge [2]. - Tsugami China plans to launch new products, such as internal thread grinding machines, to cater to the automotive industry's evolving needs [8][9]. Shareholder Returns - Tsugami China announced a final dividend of 0.5 HKD per share, an increase from the previous year's 0.4 HKD, reflecting a commitment to shareholder returns [10]. - The company has also repurchased 2.371 million shares, indicating management's confidence in future growth and efforts to stabilize market value [10].