Core Viewpoint - The company is expected to achieve a significant profit increase of approximately 48% year-on-year, reaching around RMB 502 million for the six months ending September 30, 2025, outperforming the industry average growth rate and positioning itself as a leader in the machine tool industry recovery [1]. Group 1: Growth Drivers - Demand-side resonance is evident, with China's automotive manufacturing fixed asset investment growth accelerating to 20.2% from the previous year, benefiting the company as its largest downstream sector is automotive parts [1]. - Supply-side optimization is being implemented through lean management practices, enhancing the competitiveness of lathes via improvements in production processes and supply chain management [1]. - The company has launched new products such as external thread grinding machines and high-speed precision CNC lathes, expanding its solutions in the automotive electric power steering system (EPS) [1]. Group 2: New Growth Opportunities - The liquid cooling connector market is projected to grow from RMB 2.52 billion in 2022 to RMB 5.01 billion by 2024, with a compound annual growth rate of approximately 41.0%, providing a new growth curve for the company [2]. - The company is collaborating with leading liquid cooling equipment firms to offer solutions using high-precision CNC lathes and precision turning machines, which can achieve micron-level processing accuracy [2]. - Revenue contributions from the liquid cooling business are expected to materialize by 2026, marking it as the second growth curve after automotive parts [2]. Group 3: Share Buyback and Market Confidence - In September 2025, the company repurchased 2.052 million shares for a total of RMB 62.11 million, with an average repurchase price between HKD 27 and 33, reflecting management's confidence in the company's future performance and recognition of its core technological strengths [2]. Group 4: Profit Forecast and Valuation - The company maintains its revenue forecasts for 2026 and 2027 while raising net profit estimates by 3.8% and 3.9% to RMB 1.03 billion and RMB 1.21 billion, respectively [2]. - The current price corresponds to a 10x and 9x P/E for 2026 and 2027, with a target price of HKD 38.6, indicating a potential upside of 25.8% from the current price [2].

Group 1 - The screw is a mechanical component that converts rotary motion from a motor into linear motion, widely used in machines requiring linear movement [1] - There are various types of screws classified by friction characteristics, including sliding (trapezoidal) screws, rolling screws, and static pressure screws, with rolling screws further divided into ball screws and roller screws [4] - Ball screws are commonly used in industrial machines, while roller screws are expected to see large-scale applications in humanoid robots due to their strong impact resistance and high load capacity [6] Group 2 - Humanoid robots utilize linear actuators, with Tesla's humanoid robot featuring 14 linear actuators among its 40 electromechanical actuators [8] - The Optimus Gen-3 dexterous hand is expected to have 22 degrees of freedom, showcasing advanced design and functionality [9] - The dexterous hand's motion system will primarily include linear actuator modules and tendon modules, indicating a growing market for micro screws [12] Group 3 - The planetary roller screw market is anticipated to experience geometric growth due to the large-scale application of humanoid robots, with the current market size being significantly smaller than that of ball screws [14] - In 2022, the global market size for roller screws was approximately $285 million, projected to reach around $300 million in 2023, with an annual growth rate of 5-10% [14] - Screws account for about 19% of the value of humanoid robots, with three main actuators (linear, rotary, and dexterous hand) comprising 73% of the robot's key components [15] Group 4 - The screw industry has developed a complete industrial chain, with numerous companies entering the market, supported by long-established firms and strong foreign enterprises [18] - Best Precision Machinery Co., Ltd. has diversified into the screw market, producing ball screws, roller screws, and linear motion components, and has established a subsidiary for this purpose [22][25] - Qin Chuan Machine Tool Group is a leading player in the machine tool industry, focusing on high-end machine tools and expanding into rolling function components for the automotive sector [27][29] Group 5 - Zhejiang Haideman specializes in high-end precision CNC lathes, achieving significant advancements in core components and developing proprietary CNC systems [30][33] - The T65 and T55 series CNC lathes developed by Haideman meet the micron-level processing requirements for humanoid robot components, indicating a strong market position [33]