Core Insights - The company achieved a revenue of 12.6 billion yuan in the first three quarters of 2025, representing a year-on-year growth of 47%, with a net profit attributable to shareholders of 1.15 billion yuan, up 63% year-on-year [1] - The third quarter revenue was 4.4 billion yuan, showing a 44% year-on-year increase, while the net profit attributable to shareholders was 400 million yuan, also up 63% year-on-year [1] Financial Performance - The gross margin for the first three quarters was approximately 28.6%, an increase of 1.7 percentage points year-on-year, although the third quarter gross margin decreased by 2.0 percentage points year-on-year due to weakened demand in the building materials machinery sector [2] - The operating cash flow net amount for the first three quarters was about 1.56 billion yuan, significantly improved compared to the same period last year [2] Overseas Building Materials Growth - The overseas building materials segment is identified as the core growth driver, with significant revenue increases expected from new capacities in projects in Kenya, Ivory Coast, and Tanzania [2][3] - The company anticipates continued growth in overseas building materials revenue through the expansion of tile production lines and technological upgrades [3] Ceramic Machinery Challenges - The ceramic machinery segment faced revenue and profit pressure in the third quarter due to industry cycle adjustments, but order intake exceeded last year's levels, indicating potential recovery in revenue [3] - The company has established a subsidiary in Egypt and expanded service points in India and Egypt to enhance local operations and service efficiency [3] Lithium Industry Insights - Blueco Lithium achieved a sales volume of approximately 32,000 tons in the first three quarters, generating revenue of 1.92 billion yuan, with a net profit of 1.03 billion yuan [4] - The company is expected to benefit from a shift in the lithium supply-demand balance, with a projected recovery in carbonated lithium prices [4] Valuation of African Building Materials Leader - Keda Manufacturing is recognized as a leading player in the African building materials market, with a strong market share in central Africa [4] - The projected net profits for Keda Manufacturing from 2025 to 2027 are estimated at 1.56 billion, 1.90 billion, and 2.22 billion yuan, respectively, with corresponding valuations of 16, 13, and 11 times [4]

Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Views - The company achieved a revenue of 12.6 billion yuan in the first three quarters of 2025, representing a year-on-year growth of 47%. The net profit attributable to shareholders was 1.15 billion yuan, up 63% year-on-year, and the net profit excluding non-recurring items was 1.06 billion yuan, an increase of 67% [2][4]. - In the third quarter, the company reported a revenue of 4.4 billion yuan, a 44% increase year-on-year, with a net profit of 400 million yuan, also up 63% year-on-year, and a net profit excluding non-recurring items of 360 million yuan, reflecting a 53% growth [2][4]. - The company's operating cash flow significantly improved, with a net cash flow from operating activities of approximately 1.56 billion yuan, a substantial increase compared to the same period last year [10]. Summary by Sections Financial Performance - The company’s gross margin for the first three quarters was approximately 28.6%, an increase of 1.7 percentage points year-on-year. However, the gross margin in the third quarter decreased by 2.0 percentage points year-on-year due to weakened demand for building machinery [10]. - The company’s net profit margin for the first three quarters was about 9.1%, which is an increase of 0.9 percentage points year-on-year, and remained stable in the third quarter [10]. Business Segments - The overseas building materials segment continues to drive growth, with significant revenue increases expected from new capacities in Kenya, Côte d'Ivoire, and Tanzania [10]. - The ceramic machinery segment faced challenges, but the order intake exceeded the previous year, indicating potential recovery in revenue [10]. - The lithium industry segment showed strong performance, with sales of approximately 32,000 tons and revenue of 1.92 billion yuan, benefiting from a rebound in lithium carbonate prices [10]. Future Outlook - The company is expected to see continued growth in overseas building materials revenue, supported by new production lines and technological upgrades [10]. - The forecasted net profits for 2025-2027 are approximately 1.56 billion, 1.90 billion, and 2.22 billion yuan, respectively, with corresponding valuations of 16, 13, and 11 times [10].

Group 1 - The company achieved a record revenue of 12.605 billion yuan in the first three quarters of 2025, representing a year-on-year growth of 47.19% [1] - The net profit attributable to the parent company reached 1.149 billion yuan, an increase of 63.49% year-on-year [1] - The company reported a net cash inflow of 1.560 billion yuan, primarily due to significant growth in the overseas building materials segment and effective cost control [2] Group 2 - The overseas building materials segment experienced substantial revenue growth in the third quarter, with a strong performance in tile sales and improved profitability in the sanitary ware business [3] - The ceramic machinery segment faced challenges due to industry cycle adjustments, but order intake showed a noticeable recovery since the second quarter [3][4] - The lithium battery materials segment benefited from rapid growth in the energy storage industry, with significant increases in the shipment of negative electrode materials [3] Group 3 - The company’s joint venture, Blue Lithium Industry, produced approximately 31,600 tons of lithium carbonate in the first three quarters, contributing 271 million yuan to the net profit of the parent company [4] - The company’s overseas building materials segment maintained high capacity utilization rates, with tile and sanitary ware sales rates approaching 100% [10] - The company plans to optimize its financing structure and control its debt ratio while balancing business expansion needs [14]

Key Points Summary of Keda Manufacturing Conference Call Company Overview - Keda Manufacturing reported a net cash inflow of 151.56 billion yuan in the first three quarters of 2025, primarily driven by significant revenue growth in the overseas building materials segment and effective control of period expenses [2][3] Financial Performance - The overseas building materials segment achieved a revenue of 2.189 billion yuan in Q3 2025, with a net profit of approximately 510 million yuan (about 410 million yuan after excluding exchange gains) [2][4] - The gross margin for the overseas building materials segment decreased to 34% in Q3, impacted by the ramp-up of factories in Côte d'Ivoire and Kenya, rising natural gas prices, and lower profit margins in the glass business [2][4] - Tile sales reached 148 million square meters in the first three quarters, with an average price of approximately 31.127 yuan per square meter, aiming to achieve a target of 200 million square meters by year-end [2][5] - The sanitary ware business showed sequential improvement and achieved profitability with a gross margin of about 10% [2][6] - The glass business generated approximately 260 million yuan in sales in Q3, selling 85,200 tons with a sales rate improvement to 94% [2][6] Segment Performance Overseas Building Materials - The overseas building materials segment's revenue increased quarter-on-quarter, with a total net profit of 1.156 billion yuan for the first three quarters [4] - The segment is expected to see a gradual recovery in gross margin in Q4 2025, with optimistic order prospects for 2026, particularly from new factories in Egypt, Vietnam, Indonesia, and Turkey [4][10] Ceramic Machinery - The ceramic machinery segment reported revenue of 3.881 billion yuan in the first three quarters, a slight decline year-on-year, with a net profit of 257 million yuan, down by 93 million yuan [7] - Despite the decline, order volumes have shown recovery, and improvements are expected in Q4 and the first two quarters of 2026 [7] Market Dynamics - Keda faces competitive pressure from Italian companies in the domestic market and is actively exploring markets in North America, Mexico, and South America, collaborating with the second-largest ceramic company, Vamosa [8] - The tariff adjustments in Kenya and Tanzania had minimal impact on the overseas building materials segment but positively influenced glass sales [9] Future Outlook - The domestic ceramic market remains under pressure, with no fundamental improvement in demand; however, there is potential for a turnaround in 2026 [11] - The company is exploring new projects and capacity upgrades, with a focus on enhancing global service networks and maintenance services [12] - Demand for large tiles is increasing in East Africa, with plans to expand production lines in Zambia and Ghana [13] Financial Management - The company has repaid several hundred million yuan in Euro-denominated loans, reducing the debt ratio from 60% at the beginning of the year to 50%-55% [18] - The cash flow performance is strong, with a dividend payout ratio of approximately 37% this year, with hopes to increase it to over 40% next year [19] Regulatory Compliance - Keda acknowledged past violations related to off-balance sheet income, which have been rectified, and the financial impact is considered minimal [24] - The investigation concluded without leading to further penalties or ST treatment [25]

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core View of the Report The report focuses on the in - depth analysis of Keda Manufacturing through an institutional research. The company's performance in the first half of 2025 is remarkable, with significant growth in revenue and net profit, mainly driven by overseas building materials business. The company will continue to focus on its main business, and is expected to achieve further development through business expansion, cost optimization, and product - service synergy [23][24]. 3. Summary by Directory 3.1 Research Basic Situation - The research object is Keda Manufacturing, belonging to the special equipment industry. The reception time was September 12, 2025. The listed company's reception staff included the chairman, general manager, independent director, vice - president and financial controller, and board secretary [16]. 3.2 Detailed Research Institutions - The reception objects were all investors who participated in the company's 2025 semi - annual performance briefing online [19]. 3.3 Research Institution Proportion No information provided. 3.4 Main Content Data - **Asset Impairment Plan**: In the first half of this year, the company accrued 116 million yuan in asset impairment provisions, mainly from accounts receivable impairment in the building materials machinery segment, inventory impairment in the overseas building materials segment, and goodwill impairment of the previously acquired Italian F.D.S. Ettmar company. Future F.D.S. Ettmar goodwill will not have new impairments [23]. - **H2 Business Outlook**: Overseas building materials projects in Cote d'Ivoire and Kenya were put into production in mid - to - late June, which will contribute to the business scale in the second half. The ceramic machinery business received more orders in Q2, which is expected to support H2 performance. The lithium battery materials and new energy equipment businesses also showed good development trends in H1 [23]. - **Reasons for Net Profit Growth in H1 2025**: The company's revenue in H1 2025 was 8.188 billion yuan, and the net profit attributable to the parent was 745 million yuan, with year - on - year increases of 49.04% and 63.95% respectively. The main growth came from the overseas building materials business, which achieved 3.771 billion yuan in revenue, a year - on - year increase of about 90%, and its net profit accounted for about 42% of the company's current net profit attributable to the parent [23][24][25]. - **Accessories and Consumables Business**: In H1, the accessories and consumables business grew compared with the same period last year, and its proportion in the ceramic machinery business revenue increased. The ink business grew well. With the commissioning of the Turkish KAMI ink factory this year and the company's global expansion and local layout of accessories and consumables services, this business is expected to continue growing [25]. - **Overseas Building Materials Business Capacity**: As of now, the overseas building materials business has 11 production bases in 7 African countries, operating 21 building ceramic production lines, 2 glass production lines, and 2 sanitary ware production lines, with an annual production capacity of over 200 million square meters of building ceramics, 2.6 million pieces of sanitary ware, and 400,000 tons of building glass. In H1 2025, the joint - venture company produced about 98 million square meters of tiles, over 17 tons of glass, and over 1.4 million pieces of sanitary ware [25]. - **Brand Operation in Africa**: In the tile segment, the "Tefu" brand has wide recognition in parts of sub - Saharan Africa, and the high - end brand "Micasso" is being cultivated. In the sanitary ware segment, the "Frencia" brand is used to expand the East and West African markets. The glass business uses the "Tefu" brand for brand synergy [26]. - **Overseas Building Materials Debt Situation**: In H1, the joint - venture company repaid some euro loans and supplemented RMB loans, optimizing the financing structure. As of the end of June 2025, the joint - venture company's debt ratio decreased compared with the end of last year, and the overall financing interest rate also decreased. In the future, the joint - venture company will balance debt scale and business expansion, and control the debt ratio and foreign - currency debt scale [27]. - **Prospect of Ceramic Machinery Equipment Growth**: As the downstream customer investment demand in the overseas market is expected to recover, the company, as a leading ceramic machinery enterprise, will expand overseas business, promote the coordinated development of accessories and consumables services and ceramic machinery equipment, and carry out cross - industry applications to increase business volume [29]. - **Layout of Other Tracks**: The company will focus on its main business and will not consider entering new industries in the short - to - medium - term. But it will consider opportunities for industrial chain extension, product category expansion, and general application of ceramic machinery equipment within the main business [29]. - **Bluecore Lithium Industry Cost**: Although the domestic lithium carbonate market price was low in H1, Bluecore Lithium Industry's production cost was at a low level in the market and decreased quarter - on - quarter. In H1 2025, it had a net profit margin of 31% [29][30]. - **Price Outlook of Overseas Building Materials Products**: The average price of tiles in H1 increased compared with the same period last year and is expected to continue rising. The glass product price is at a good level. The company will optimize the sales structure and take cost - reduction measures to improve profitability [30][32].

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company reported a revenue of 8.188 billion RMB for H1 2025, representing a year-on-year growth of 49.04%, with a net profit attributable to shareholders of 745 million RMB, up 63.95% year-on-year [2] - The overseas building materials segment benefited from optimized layout and pricing strategies, achieving a revenue of 3.771 billion RMB in H1 2025, a significant increase of 90.08% [3] - The lithium carbonate segment saw a sales volume of approximately 20,600 tons in H1 2025, with a contribution to net profit of 168 million RMB, reflecting a positive trend due to cost optimization [4] Summary by Sections Performance Review - In H1 2025, the company achieved a revenue of 8.188 billion RMB, with a net profit of 745 million RMB and a non-recurring net profit of 700 million RMB, marking increases of 49.04%, 63.95%, and 75.06% respectively [2] Operational Analysis - Revenue structure for H1 2025: Overseas building materials (46%), building materials machinery (31%), lithium battery materials (11%), and new energy equipment (9%), with overseas revenue accounting for over 65% [3] - The overseas building materials segment's revenue reached 3.771 billion RMB, with a gross margin of 36.80%, an increase of 5.85 percentage points year-on-year [3] - The ceramics machinery segment experienced a revenue decline of 5.01% to 2.570 billion RMB due to industry demand slowdown [4] - The lithium carbonate segment's average price was 60,300 RMB/ton, down 2,270 RMB/ton year-on-year, but still contributed positively to profits due to cost reductions [4] Profit Forecast and Valuation - The company is expected to achieve net profits of 1.544 billion RMB, 1.807 billion RMB, and 1.962 billion RMB for 2025, 2026, and 2027 respectively, with corresponding PE ratios of 14.7, 12.6, and 11.6 [5]

Core Viewpoint - Keda Manufacturing reported significant growth in both revenue and profit for the first half of 2025, driven by strong performance in overseas markets and the building materials machinery sector [1][2]. Group 1: Financial Performance - In the first half of 2025, Keda Manufacturing achieved revenue of 8.188 billion yuan, a year-on-year increase of 49.04%, marking a historical high for the same period [1]. - The net profit attributable to shareholders reached 745 million yuan, reflecting a year-on-year growth of 63.95%, while the net profit after deducting non-recurring gains and losses was 700 million yuan, up 75.06% [1]. - The overseas building materials business saw a revenue increase of approximately 90% to 3.771 billion yuan, with an improvement in gross margin by about 6 percentage points [2]. Group 2: Business Segments - The building materials machinery segment maintained stable operational quality, generating revenue of 2.570 billion yuan with a gross margin of 26.23% [1]. - Keda Manufacturing is actively expanding its global ceramic machinery market, establishing subsidiaries in Brazil, Vietnam, and Egypt, enhancing its global service network [1]. - The company launched the BOZUYUK factory's parts and consumables workshop in Turkey, with plans for the KAMI ink factory to commence production in the second half of the year [1]. Group 3: Production and Capacity - The overseas building materials business achieved a ceramic tile production of over 98 million square meters, glass production exceeding 170,000 tons, and sanitary ware production of over 1.4 million pieces [2]. - The production efficiency and output have improved due to capacity construction and technological upgrades, with projects in Kenya and Côte d'Ivoire commencing production in June [2]. Group 4: Investment and Subsidiaries - Keda Manufacturing's associate company, Lanke Lithium, produced 20,000 tons of lithium carbonate and achieved sales of 20,600 tons, contributing 168 million yuan to Keda's net profit [2]. - Despite a downturn in the lithium carbonate market, Lanke Lithium maintained a net profit margin of 31%, showcasing its cost-effective lithium extraction technology [2].

Summary of Keda Manufacturing Conference Call Company Overview - Keda Manufacturing has over 60% of its revenue from overseas, primarily from local building materials in Africa (approximately 4.7 billion RMB) and machinery equipment exports (approximately 3.3 billion RMB) [2][5][17] - Net profit increased from 120 million RMB in 2019 to 700-800 million RMB in 2024, with expectations to reach 1.3-1.4 billion RMB in 2025 [2][5] Key Business Segments Machinery Equipment - Despite a decline in downstream demand, Keda Manufacturing achieved growth through consumables (expected revenue of 1.2 billion RMB in 2024, with 300 million RMB from ink collaboration with Guocera) and general equipment (revenue of 1 billion RMB) [2][7] - The ceramic machinery segment maintains a revenue of 4.5 billion USD, holding a global market share of approximately 25% [2][7] Local Building Materials in Africa - Keda Manufacturing collaborates with local leading enterprises to strengthen its channel advantages in the African market [2][8] - The African building materials market is projected to reach 1.4 billion square meters by the end of 2023, valued at approximately 40 billion RMB [2][12] Financial Projections - Expected revenue for 2025 is over 7 billion RMB, with projections of 8-9 billion RMB in 2026 and over 10 billion RMB in 2027 [3][17] - The company aims for a revenue target of 10 billion USD, with specific goals for ceramic machinery, consumables, and general equipment [7] Competitive Landscape - Keda Manufacturing has established a dual oligopoly with Italy's Sacmi in the ceramic machinery industry [7] - The company has a strategic focus on enhancing its competitive edge in the African market, where Chinese enterprises have gained significant market share [9][12] Governance and Management - Keda Manufacturing has a complex governance structure with multiple financial investors, which may impact long-term strategic decisions [3][4] Market Dynamics - The African market is characterized by a growing demand for building materials due to population growth and urbanization [9][12] - Local production capabilities have increased, reducing import ratios, although infrastructure challenges still lead to over 20% imports [12] Strategic Initiatives - Keda Manufacturing is expanding into sanitary ware and glass production, with a glass production line in Tanzania expected to generate nearly 1 billion RMB in revenue [15][16] - The company is leveraging its existing channels and partnerships to enhance its market position and profitability [10][11] Investment Outlook - The current market conditions are favorable for investing in Keda Manufacturing due to its low valuation, stable growth, and high elasticity from potential lithium carbonate price increases [17][18]

Investment Rating - The report maintains an "Accumulate" rating for the company [1] Core Views - The company has achieved significant revenue growth in 2024, with operating income reaching 12.6 billion yuan, a year-on-year increase of 30% [5][6] - The net profit attributable to the parent company for 2024 was 1.01 billion yuan, reflecting a decline of 51.9% year-on-year, primarily due to the drop in lithium carbonate prices impacting profitability [5][6] - In Q1 2025, the company reported operating income of 3.77 billion yuan, up 47% year-on-year, with net profit attributable to the parent company increasing by 11.4% to 350 million yuan [5][7] Revenue Performance - In 2024, the company’s revenue from major business segments showed strong growth: machinery equipment, overseas building materials, and lithium battery materials generated revenues of 6.72 billion, 4.72 billion, and 880 million yuan, respectively, with year-on-year increases of 35.1%, 29.0%, and 19.2% [6] - The company’s domestic and overseas revenues were 4.57 billion and 8.02 billion yuan, respectively, with year-on-year growth of 18% and 38%, indicating that overseas business accounted for over 63% of total revenue [6] Profitability Analysis - The company’s gross margin and net margin for 2024 were 26.0% and 10.2%, down 3.29 and 16.68 percentage points year-on-year, respectively, due to the significant decline in profits from its associate, Blue Lithium Industry [8] - In Q1 2025, the gross margin improved slightly to 29.7%, while the net margin was 13.8%, reflecting a year-on-year increase of 2.83 percentage points [9] Cash Flow and Expenses - The company’s operating cash flow for 2024 was 557 million yuan, a decrease of 174 million yuan compared to the previous year [8] - The financial expense ratio increased significantly to 5.1% in Q1 2025 due to substantial exchange losses, while other expense ratios were well-controlled [9] Future Outlook - The company is expected to see gradual profit recovery in 2025, with revised net profit forecasts of 1.52 billion and 1.68 billion yuan for 2025 and 2026, respectively [11] - The company is actively expanding its overseas building materials business, with production bases established in multiple African countries and plans for further capacity increases [11]