Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Views - Huamao Technology is a leader in automotive passive safety, with high capacity utilization of airbag products. The new factory is in the ramp-up phase, expected to drive continuous growth in the automotive segment. The acquisition of the leading optical module PCBA company, Fuchuang Youyue, is progressing, marking the company's entry into semiconductor and computing power manufacturing, creating a new growth avenue. The AI trend is anticipated to drive high growth in the optical module industry, with Fuchuang Youyue's promising outlook likely to boost the company's performance [2][4][9]. Summary by Sections Company Overview - Huamao Technology plans to acquire the remaining 57.84% stake in Fuchuang Youyue, aiming for full control. Prior to this transaction, the company held a 42.16% stake through its subsidiary Huamao Dongyang [4]. Financial Performance - Fuchuang Youyue is a leading optical communication service provider with a well-established global capacity layout. The company has been in the optical communication sector for over 18 years and is one of the largest PCBA manufacturers in China, collaborating with several top global clients. By June 2025, Fuchuang Youyue plans to have a total of 16 production lines [9]. - Fuchuang Youyue's revenue and profit are expected to grow significantly, with projected revenues of 1.23 billion and net profits of 130 million in 2024, representing year-on-year increases of 116% and 434%, respectively. For the first four months of 2025, revenues reached 640 million with a net profit of 70 million, showing an increase in net profit margin from 4.2% in 2023 to 11.7% [9]. Future Projections - The company forecasts net profits for 2025-2027 to be 543 million, 720 million, and 915 million, respectively, with year-on-year growth rates of 96%, 33%, and 27%. The corresponding price-to-earnings ratios are projected to be 31x, 24x, and 19x [9].

Core Insights - The macroeconomic environment shows a slowdown in industrial production and a weakening in real estate transactions, indicating a cautious outlook for the economy [3][6][8]. Industry Analysis Communication Industry - The demand for copper interconnects is increasing due to their low cost and low power consumption advantages in short-distance connections, driven by the rise of AI technologies [4][11]. - The AEC technology is gaining attention for enhancing signal quality and transmission distance in data centers, which is expected to grow significantly as AI continues to develop [13]. Construction and Real Estate - Recent data indicates a seasonal decline in construction starts, with cement dispatch rates and construction site funding levels falling below historical averages [3][6][8]. - New housing transactions in first-tier cities are experiencing a significant year-on-year decline, suggesting a cooling real estate market [8]. Commodity Prices - International commodity prices, including oil and gold, have decreased due to reduced geopolitical tensions, while domestic industrial products are showing a strong performance [7][8]. Export Trends - Export growth is projected to be around 2% year-on-year for June, with key indicators such as port container throughput showing positive trends [9]. Investment Recommendations - Focus on leading companies in the copper cable connector industry, particularly those with integrated advantages and strong partnerships in the AI server market [14].

Core Viewpoint - The company is experiencing significant growth driven by the demand for high-speed communication connectors, particularly in the context of AI development, with a strong focus on new product advancements such as liquid cooling solutions and 224G connectors [1][3]. Group 1: Financial Performance - In 2024, the company reported a revenue of 1.032 billion yuan, representing a year-on-year increase of 51.12%, and a net profit of 110 million yuan, up 65.74% [1]. - For Q1 2025, the company achieved a revenue of 379 million yuan, marking a year-on-year growth of 95.25% and a quarter-on-quarter increase of 15.24%, with a net profit of approximately 52.9 million yuan, up 190.12% year-on-year and 65.32% quarter-on-quarter [1][2]. Group 2: Product Development and Market Demand - The company is focusing on liquid cooling solutions and 224G connectors, which have received customer certification and are in small-batch trial production, with mass production expected in Q2 and Q3 of this year [1]. - The main growth driver for the company is the demand for high-speed communication products, particularly in AI applications across various sectors such as internet, rail transportation, healthcare, autonomous driving, data storage, and data transmission [3]. - The company’s high-speed communication product series includes Cage, backplane connectors, and copper cable connectors, with speed upgrades from 112G to 224G [3]. Group 3: Customer Base and Partnerships - The company supplies liquid cooling products primarily to renowned connector companies such as Amphenol, Molex, TE Connectivity, and Luxshare [1]. - In the automotive sector, BYD is a major customer, with the company providing various types of automotive connectors, including control system connectors and high-voltage interlock connectors [3][4]. Group 4: Production Capacity and Order Status - The company maintains a busy production line with saturated orders and strong product demand, indicating a robust operational capacity [2]. - The production of automotive connectors emphasizes high precision and stability, with a focus on quality control and effective collaboration across design and manufacturing processes [4].