Core Viewpoint - The report by China Galaxy Securities on Hongfa Technology indicates a positive outlook for the company's performance, driven by improving demand across various sectors, leading to stable growth in revenue and profits. The company is rated as a "buy" for the first time. Financial Performance - In the first half of 2025, the company achieved revenue of 8.35 billion yuan, a year-on-year increase of 15.4%, and a net profit attributable to shareholders of 960 million yuan, up 14.2% year-on-year. The net profit excluding non-recurring items was 930 million yuan, reflecting a 17.9% increase year-on-year. The gross margin was 34.2%, down 0.54 percentage points year-on-year, while the net margin remained stable at 15.3% [2]. - In the second quarter of 2025, the company reported revenue of 4.36 billion yuan, with year-on-year and quarter-on-quarter increases of 15.5% and 9.6%, respectively. The net profit attributable to shareholders was 550 million yuan, showing a year-on-year increase of 13.3% and a quarter-on-quarter increase of 34.5%. The gross margin improved to 34.7%, remaining stable year-on-year and increasing by 0.9 percentage points quarter-on-quarter [2]. Market Demand and Growth Drivers - The overall demand in downstream sectors is improving, leading to a return to revenue growth for the company. In the consumer electronics sector, products like power relays and signal relays are benefiting from consumption promotion policies, resulting in rapid growth. The industrial equipment sector is experiencing a recovery in demand as major clients deplete their inventories, with expectations for continued recovery in the second half of the year [3]. - In the electric power sector, the demand for power relays is stable year-on-year, although it is expected to decline in the second half of 2025 due to a cyclical drop in smart meter installations in North America. The automotive sector is seeing rapid growth in low-voltage automotive relays, driven by domestic market expansion and increased market share of domestic brands [3]. Strategic Initiatives - The "75+ strategy" is being steadily advanced, with new growth areas being cultivated. In the first half of 2025, the low-voltage electrical market faced slight declines due to a downturn in the domestic construction distribution market and tariff impacts on overseas shipments. However, film capacitors grew by 31%, current sensors increased by 36%, and the ceramic DC fast fuse HPE509 received UL certification, with efforts to onboard benchmark clients and new customers [3]. Investment Recommendations - As a leading global player in the relay industry, the company has significant strategic advantages, with promising growth in high-voltage DC relays and strong cash flow from power relays. The company is also actively exploring new product categories and markets, indicating potential for future growth. Revenue projections for 2025-2027 are 16.2 billion, 18.4 billion, and 19.9 billion yuan, with net profits of 1.8 billion, 2.1 billion, and 2.7 billion yuan, respectively. The expected EPS for these years is 1.3, 1.4, and 1.8 yuan per share, corresponding to PE ratios of 19x, 16x, and 13x [4].

Core Viewpoint - The performance of Hongfa Technology (宏发股份) meets expectations, maintaining a leading global market share, and is rated as a buy by Huazhong Securities [1] Financial Performance - In the first half of 2025, the company achieved revenue of 8.347 billion yuan, a year-on-year increase of 15.43%, and a net profit attributable to shareholders of 964 million yuan, up 14.19% year-on-year [2] - For Q2 2025, revenue reached 4.364 billion yuan, reflecting a 15.51% year-on-year growth, with a net profit of 553 million yuan, a 13.25% increase year-on-year [2] Product Performance - The electromagnetic relay segment generated revenue of 7.614 billion yuan in H1 2025, marking a 17.26% year-on-year growth, with the company maintaining the number one global market share [3] - The high-voltage control box for electric vehicles showed significant growth, driven by the rapid development of the new energy vehicle market [3] New Product Development - The "5+" new product categories, including switches, connectors, capacitors, fuses, and current sensors, are developing steadily, with film capacitors and current sensors seeing year-on-year shipment increases of 31% and 36%, respectively [4] Investment Recommendations - Revenue projections for 2025, 2026, and 2027 are 16.371 billion yuan, 18.892 billion yuan, and 21.770 billion yuan, respectively, with net profits of 1.961 billion yuan, 2.281 billion yuan, and 2.487 billion yuan, corresponding to P/E ratios of 18.3, 15.7, and 14.4 [5]

Investment Rating - Investment rating is maintained as "Buy" [1] Core Views - The company reported a revenue of 8.347 billion yuan for the first half of 2025, representing a year-on-year growth of 15.43% [2] - The net profit attributable to shareholders reached 964 million yuan, up 14.19% year-on-year, with a non-recurring net profit of 927 million yuan, growing 17.85% year-on-year [2] - The gross margin stood at 34.24%, a decrease of 0.54 percentage points year-on-year [2] Performance Summary - In Q2 2025, the company achieved a revenue of 4.364 billion yuan, reflecting a year-on-year increase of 15.51% [2] - The net profit attributable to shareholders for Q2 was 553 million yuan, up 13.25% year-on-year, with a non-recurring net profit of 546 million yuan, growing 20.52% year-on-year [2] - The gross margin for Q2 was 34.67%, with a slight increase of 0.03 percentage points year-on-year and 0.90 percentage points quarter-on-quarter [2] Product Performance - The company's relay products generated a revenue of 7.614 billion yuan in H1 2025, marking a year-on-year growth of 17.26% [3] - The company maintains the largest market share globally in the relay market, driven by strong growth in smart home, industrial automation, photovoltaic sectors, and the rapid development of electric vehicles [3] - The high-voltage control box project for electric vehicles is progressing smoothly, showing significant year-on-year growth [3] New Product Development - The "5+" new product categories, including switches, connectors, capacitors, fuses, and current sensors, are developing steadily [4] - The shipment of film capacitors increased by 31% year-on-year, and current sensors saw a 36% year-on-year growth [4] - The ceramic block DC fast fuse HPE509 received UL certification, indicating potential for stable growth as new customer projects are introduced [4] Financial Projections - Revenue projections for 2025, 2026, and 2027 are 16.371 billion yuan, 18.892 billion yuan, and 21.770 billion yuan, respectively [5] - Net profit projections for the same years are 1.961 billion yuan, 2.281 billion yuan, and 2.487 billion yuan, respectively [5] - Corresponding P/E ratios are expected to be 18.3, 15.7, and 14.4 times [5]

宏发股份（600885）7月29日晚披露2025年半年度报告，报告期内，公司实现营业收入83.47亿元，同比 增长15.43%；实现净利润9.64亿元，同比增长14.19%；扣非净利润9.27亿元，同比增长17.85%；公司经 营效率指标显示，人均销售回款65.4万元，同比增长8.9%。 宏发股份拥有七大核心事业部，50余家子公司（含境外企业），全球雇员15000余人，继电器年出货量 超过30亿只，厂房面积逾100万平方米，已形成了较为完备的继电器及电气产品产业链，涵盖了生产设 备的设计与制造、零部件生产、成品生产以及产品的销售。 今年上半年，宏发股份以提升市场份额为中心，把握新能源及汽车产业发展机遇，在宏观经济不确定性 高，材料价格快速上涨，部分行业竞争加剧的外部环境下，主要经营指标继续实现良好增长。公司主营 继电器产品整体取得良好增长，市场份额稳固，各个下游未出现明显短板。 具体来看，1—6月，宏发股份低压开关及成套业务同比略有增长，主要受国内建筑配电市场不景气及关 税扰动海外发货节奏影响，公司通过开拓新能源及工业、电网等应用市场，形成新的增长点，推动低压 开关业务整体保持平稳发展。公司薄膜电容器发货同比 ...