Group 1 - The commercialization of solid-state batteries in the electric vehicle market is transitioning from "unreachable" to "within reach," with leading battery manufacturers unveiling ambitious mass production plans [1] - Ultrasonic technology has emerged as a key solution to overcome manufacturing challenges in solid-state battery production, playing an essential role in various critical processes from material preparation to quality inspection [1][3] - Ultrasonic welding has become the mainstream solution for ear connections in solid-state batteries, enhancing safety and consistency by avoiding high-temperature issues associated with traditional welding methods [1][3] Group 2 - Ultrasonic detection technology offers significant advantages over X-Ray detection for identifying internal defects in solid-state batteries, such as cracks and delamination, ensuring high consistency and reliability in battery performance [2] - The core structure of solid-state batteries, composed of multiple layers, necessitates precise detection of interface issues, which ultrasonic technology can effectively address, allowing for 100% online inspection [2] - Ultrasonic dispersion technology can significantly improve the uniformity of solid electrolyte materials, addressing key bottlenecks in mass production [2] Group 3 - As the mass production of solid-state batteries approaches in 2026-2027, the market for ultrasonic equipment is expected to experience explosive growth, with demand for ultrasonic welding equipment projected to be 5-10 times higher per GWh compared to traditional lithium batteries [3] - The demand for high-precision ultrasonic scanning detection equipment will increase significantly due to the stringent consistency requirements of solid-state batteries, with the equipment's value expected to exceed that of the welding process [3] - Overall, the demand for various ultrasonic devices in solid-state battery production may see a 20-fold increase compared to traditional lithium battery production lines [3] Group 4 - The ultrasonic equipment segment represents one of the largest value increases in solid-state battery mass production, driven by a surge in application scenarios and the creation of new processes [4] - Companies like Jiao Cheng Ultrasonic are positioned as leaders in this space, leveraging their technological expertise and innovative breakthroughs to establish deep collaborative relationships with top battery manufacturers [4] - This collaboration is accelerating the mass production process and the industrialization of solid-state batteries [4]

Group 1 - The core viewpoint of the news is that the company Jiao Cheng Ultrasonic is experiencing improvements in gross profit margin due to changes in product structure and enhanced management efficiency, with a focus on the semiconductor advanced packaging sector [1] - Jiao Cheng Ultrasonic has received orders and has begun mass shipments of various ultrasonic equipment, indicating a positive trend in their business operations [1] - The company has a strong R&D team, which provides a competitive advantage and core competencies in the market [1] Group 2 - The company has seen a recovery in orders for its new energy battery equipment business after facing challenges last year [1] - Ultrasonic welding equipment is being utilized for solid-state battery ear welding, with small batch orders already delivered [1] - The company is expanding its applications of ultrasonic technology across various sectors, including new energy batteries, wiring harness connectors, and semiconductors [1]

Investment Rating - The industry investment rating is "Positive" [2] Core Views - The report emphasizes the focus on technology growth directions and the recovery opportunities in undervalued sectors, particularly in machinery and robotics [2][15] - The report highlights the strong performance of excavator sales and the steady growth of forklift sales, indicating a positive trend in the machinery sector [12][14] Summary by Sections Company Performance - **Jiaocheng Ultrasonic**: Achieved revenue of 148 million yuan in Q1 2025, a year-on-year increase of 22.35%, and a net profit of 23.63 million yuan, up 2152.47%. The company is expected to benefit from the recovery in the lithium battery industry and growth in semiconductor sectors [3][15] - **Zhenghe Industrial**: Reported revenue of 395 million yuan in Q1 2025, a 6.32% increase, with a net profit of 53.84 million yuan, up 100.09%. The company is developing micro-chain systems for robotics, which may benefit from the mass production of humanoid robots [4][15] - **Lvtian Machinery**: Focused on general power machinery and energy storage products, with revenue growth rates of 47.9%, 72.5%, and 50.1% in Q3 2024, Q4 2024, and Q1 2025 respectively. The company expects a net profit growth of 50%-70% in H1 2025 [5][15] Market Trends - In July 2025, excavator sales reached 17,138 units, a 25.2% year-on-year increase, with domestic sales up 17.2% and exports up 31.9%. This growth is attributed to infrastructure investment and equipment replacement policies [13][58] - Forklift sales in July 2025 totaled 118,605 units, a 14.4% increase year-on-year, with both domestic and export sales showing strong growth [14][41] Robotics and Technology - The report notes the increasing demand for humanoid robots and AI-related equipment, with significant events such as the World Humanoid Robot Games showcasing advancements in this field [12][56] - The domestic industrial robot market is expected to grow significantly, driven by labor cost increases and government policies promoting automation [53][56] Policy Support - The report outlines various government policies aimed at supporting the machinery and robotics sectors, including initiatives for equipment upgrades and technological innovation [39][56]

Investment Rating - The industry investment rating is "Positive" [2] Core Viewpoints - The recent trade agreement between the US and Vietnam, which imposes a 20% tariff on Vietnamese goods and a 40% tariff on goods transshipped through Vietnam, is expected to improve export chain sentiment [12][6] - The manufacturing PMI in China showed a slight recovery in June 2025, indicating improved new orders and production indices, which may contribute to a positive outlook for the industry [12][24] Company Summaries 1) Jiao Cheng Ultrasonic - The company focuses on ultrasonic equipment and solutions, achieving a revenue of 148 million yuan in Q1 2025, a year-on-year increase of 22.35%. The net profit attributable to shareholders reached 23.63 million yuan, up 2152.47% [3][13] - The business recovery in the new energy sector, particularly in lithium battery expansion, is expected to bring performance elasticity [13] 2) Zhenghe Industrial - Engaged in the research, manufacturing, and sales of various chain transmission systems, the company reported a revenue of 395 million yuan in Q1 2025, a 6.32% year-on-year increase, with a net profit of 53.84 million yuan, up 100.09% [4][14] - The company is developing a micro-chain system project, focusing on robotic dexterous hand transmission technology, which may benefit from the mass production of humanoid robots [14] 3) Lvtian Machinery - The main products include general power machinery and high-pressure cleaning machines, with energy storage products entering mass production. Revenue growth rates for Q3 2024, Q4 2024, and Q1 2025 are projected at 47.9%, 72.5%, and 50.1%, respectively [5][15] - The company is expected to experience a performance turning point, indicating a positive outlook for valuation recovery [15] Industry Overview - The mechanical index (CITIC) increased by 0.41% last week, while the overall market indices also showed positive growth [16][19] - The manufacturing sector's fixed asset investment in China grew by 8.5% year-on-year from January to May 2025, indicating a recovery trend [24]

Investment Rating - The industry investment rating is "Positive" [2] Core Viewpoints - Manufacturing investment has slightly declined, but there are opportunities to capture from the bottom up [2] - The manufacturing PMI for May 2025 is 49.5%, showing a month-on-month increase of 0.5 percentage points, indicating a slight recovery in manufacturing activity [13][27] - Fixed asset investment in manufacturing from January to May 2025 has grown by 8.5% year-on-year, but this is a decrease of 0.3 percentage points compared to the previous four months [13][27] Company Summaries 1) Jiao Cheng Ultrasonic - Focuses on ultrasonic equipment and solutions, achieving revenue of 148 million yuan in Q1 2025, a year-on-year increase of 22.35% - Net profit attributable to shareholders reached 23.63 million yuan, up 2152.47% year-on-year, with non-recurring net profit at 19.77 million yuan, a growth of 1068.17% [3][14] 2) Zhenghe Industrial - Engaged in the R&D, manufacturing, and sales of various chain drive systems, with Q1 2025 revenue of 395 million yuan, a year-on-year increase of 6.32% - Net profit attributable to shareholders was 53.84 million yuan, up 100.09% year-on-year, and non-recurring net profit was 30.26 million yuan, a growth of 16.45% [4][15] 3) Lvtian Machinery - Main products include general power machinery and high-pressure cleaning machines, with revenue growth rates of 47.9%, 72.5%, and 50.1% for Q3 2024, Q4 2024, and Q1 2025 respectively - Net profit growth rates for the same periods were 24.1%, 55.9%, and 56.3%, indicating a performance turning point [5][16] 4) Sande Technology - Achieved revenue of 108 million yuan in Q1 2025, a year-on-year increase of 18.35% - Net profit attributable to shareholders was 28.07 million yuan, up 45.38% year-on-year, with non-recurring net profit at 27.35 million yuan, a growth of 51.23% [6][17] Industry Trends - The manufacturing sector is experiencing a slight investment decline, but there are positive indicators in specific segments such as process industries and individual stocks with strong performance [7][14] - The demand for industrial robots is increasing, with a production growth of 35.5% year-on-year in May 2025, reflecting a shift towards automation in manufacturing [49][51] - The excavator sales in May 2025 reached 18,202 units, a year-on-year increase of 2.1%, indicating resilience in the construction machinery sector despite some internal sales pressure [58]

Economic Indicators - The manufacturing PMI in May 2025 increased to 49.5%, up 0.5 percentage points from the previous month[13] - The production index rose by 0.9 percentage points to 50.7%, while the new orders index increased by 0.6 percentage points to 49.8%[13] - Fixed asset investment in manufacturing grew by 8.8% year-on-year from January to April 2025[26] Machinery Sector Performance - Excavator sales in April 2025 reached 22,142 units, a year-on-year increase of 17.6%, with domestic sales up 16.4% and exports up 19.3%[62] - Loader sales in April 2025 totaled 11,653 units, growing 19.2% year-on-year, with domestic sales increasing by 35.45%[71] - The industrial robot production in April 2025 was 71,547 units, reflecting a significant year-on-year growth of 51.5%[48] Company Highlights - Jiao Cheng Ultrasonic reported Q1 2025 revenue of 148 million yuan, a 22.35% increase year-on-year, and net profit of 23.63 million yuan, up 2152.47%[3] - Zhenghe Industrial achieved Q1 2025 revenue of 395 million yuan, a 6.32% increase year-on-year, with net profit rising by 100.09%[4] - Lvtian Machinery's revenue growth rates for Q3 2024, Q4 2024, and Q1 2025 were 47.9%, 72.5%, and 50.1% respectively, indicating a strong performance turnaround[5] Risks and Recommendations - Potential risks include demand recovery falling short of expectations and fluctuations in raw material prices[78] - Recommendations include focusing on companies with strong Q1 performance such as Longxin General, Jack Shares, and Huichuan Technology[13]

Investment Rating - The report initiates coverage with an OUTPERFORM rating for the company, indicating expected performance above the market average over the next 12-18 months [19][28]. Core Insights - The company is experiencing a performance turnaround, with significant growth in emerging business sectors such as IGBT, wiring harness, and semiconductor applications. The lithium battery business is also recovering, leading to a positive outlook for future earnings growth [5][19]. - The target price is set at RMB 52.26, based on a 50x price-to-earnings (PE) ratio for 2025, which is higher than the industry average [5][7]. Financial Summary - The company’s revenue is projected to grow from RMB 525 million in 2023 to RMB 1,318 million by 2027, reflecting a compound annual growth rate (CAGR) of approximately 20.7% [4]. - Net profit is expected to increase from RMB 67 million in 2023 to RMB 249 million in 2027, with a notable recovery in profit margins [4]. - The earnings per share (EPS) forecast for 2025, 2026, and 2027 is RMB 1.05, RMB 1.80, and RMB 2.17 respectively [5][19]. Business Performance - In Q4 2024, the company reported a revenue of RMB 585 million, a year-on-year increase of 11.3%, and a net profit of RMB 86 million, up 29.04% year-on-year [20]. - The revenue from power battery ultrasonic welding equipment decreased significantly by 53.48% year-on-year, while parts business revenue increased by 70.45% [5][20]. - New business segments, including wiring harness connectors and semiconductor ultrasonic equipment, contributed 21.95% to total revenue [20]. Research and Development - The company maintains a high R&D investment rate of 21.65%, focusing on new product development and customer adoption in various sectors [5][20]. - The R&D efforts have led to breakthroughs in ultrasonic applications across multiple industries, including automotive, medical devices, and consumer electronics [5][17].

Investment Rating - The industry investment rating is "Positive" [7] Core Viewpoints - The report emphasizes the need to focus on advanced technology and companies with safety margins due to escalating trade risks [2][15] - The report highlights the recovery in the engineering machinery sector and suggests that companies like Hengli Hydraulic and Yizhiming are well-positioned to benefit from this trend [3][4][16] - The report notes that the geopolitical risks, particularly related to U.S. tariffs on Chinese imports, necessitate attention to companies with overseas production capabilities [15][16] Summary by Relevant Sections 1. Key Companies - **Hengli Hydraulic**: As a leading player in the domestic transmission sector, it is expected to benefit from the recovery in engineering machinery. The company has completed the construction of its linear actuator project and has begun small-scale production, with a focus on increasing investment in the ball screw sector for sustained growth [3][16] - **Yizhiming**: This company, a leader in injection molding and die-casting machines, is optimizing its competitive capabilities through continuous domestic and international expansion. It is anticipated that the macroeconomic recovery will support ongoing industry demand [4][17] - **Fosda**: Specializing in deep-cooling technology equipment, Fosda is projected to achieve a net profit of 258-295 million yuan in 2024, reflecting a year-on-year growth of 34.97%-54.33%. The company has a robust order book and is expected to enhance its profitability through increased overseas business [5][18] - **Sande Technology**: The company is focusing on instrument equipment and unmanned intelligent equipment, with an expected net profit of 138-152 million yuan in 2024, indicating a significant year-on-year growth of 156.81%-182.86% [8][19] - **Jiaocheng Ultrasonic**: This company is concentrating on ultrasonic equipment and solutions, with projected revenue of 580 million yuan in 2024, a year-on-year increase of 11.03% [9][20] 2. Market Trends - The report indicates that the engineering machinery sector is experiencing a recovery, with excavator sales in March 2025 reaching 29,590 units, a year-on-year increase of 18.5% [59] - The manufacturing PMI for March 2025 is reported at 50.5%, indicating a continued recovery in the manufacturing sector [29] - The report highlights the increasing demand for industrial robots, with a cumulative production of 91,088 units in the first two months of 2025, reflecting a year-on-year growth of 27.0% [51] 3. Recommendations - The report suggests focusing on key sectors such as engineering machinery (e.g., Sany Heavy Industry, LiuGong, XCMG) and humanoid robots (e.g., Hengli Hydraulic, Yizhiming) [16] - It also recommends monitoring companies with independent growth logic and strong fundamentals, such as Hengli Hydraulic and Sande Technology [16]