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].