Core Insights - The company, Kede CNC, provides manufacturing and processing equipment for major aircraft core components, including engines and structural parts [1] Group 1: Product Offerings - Kede CNC's products cover a wide range of aircraft core components, including five-axis vertical and horizontal machining centers, six-axis five-linkage blade processing centers, and high-speed blade tip grinding centers for efficient processing of engine core components such as blades, casings, and disks [1] - The company offers five-axis horizontal turning and milling composite machining centers, as well as various milling products for the production of landing gear, wings, rib structures, and frame components [1] - The five-axis gantry machine GMC3060 is designed for efficient processing of large aerospace titanium alloys, aluminum alloys, and non-metal composite materials [1] Group 2: Clientele and Market Reach - Kede CNC has provided equipment to 30 main engine manufacturers and research institutes under the Aviation Industry Corporation of China (AVIC) and the Aero Engine Corporation of China (AECC) [1] - The company has supplied equipment to nearly 100 supporting manufacturers in the aviation industry, indicating a strong market presence and extensive client base [1] - Multiple key models from Kede CNC are involved in the manufacturing of large aircraft, showcasing the company's integral role in the aerospace supply chain [1]

Core Viewpoint - The company, Kede CNC, has confirmed that its products are utilized in the manufacturing of key components for large aircraft, including the newly launched Airbus A320 series in Tianjin [2]. Group 1: Company Products and Capabilities - Kede CNC's products cover the manufacturing and processing of core components for large aircraft, including engines and structural parts [2]. - The company offers various advanced machining centers, such as five-axis vertical and horizontal machining centers, and six-axis five-linkage blade processing centers, which are designed for efficient processing of engine core components like blades, casings, and disks [2]. - For structural components and landing gear, Kede CNC provides five-axis horizontal turning and milling composite machining centers, which can be used for the production of landing gear, wings, ribs, and frame components [2]. - The five-axis gantry machine GMC3060 is capable of efficiently processing large structural components made from titanium alloys, aluminum alloys, and non-metallic composite materials [2]. Group 2: Industry Engagement - Kede CNC has supplied equipment to 30 main engine manufacturers and research institutes under the Aviation Industry Corporation of China (AVIC) and has provided equipment to nearly 100 supporting manufacturers in the aviation industry [2]. - The company's main models have participated in the manufacturing of large aircraft, indicating its significant role in the aviation supply chain [2].

Core Viewpoint - The company, Kede CNC (688305.SH), specializes in manufacturing and processing core components for large aircraft, providing advanced machining solutions for the aerospace industry [1] Product Offerings - The company's products cover most core components of large aircraft manufacturing, including efficient machining solutions for engine parts such as blades, casings, and disks using five-axis vertical and horizontal machining centers, as well as six-axis five-linkage disk machining centers and high-speed blade tip grinding centers [1] - In the structural components and landing gear sector, the company offers five-axis horizontal turning and milling composite machining centers (KTM120) and various milling products for the production of landing gear, wings, rib structures, and frame components [1] - The five-axis gantry machine (GMC3060) is designed for efficient machining of large aerospace titanium alloys, aluminum alloys, and non-metallic composite materials [1] Clientele and Market Reach - The company has provided equipment to 30 main engine manufacturers and research institutes under the Aviation Industry Corporation of China (AVIC) and the Aero Engine Corporation of China (AECC) [1] - It has supplied equipment to nearly 100 supporting manufacturers in the aviation industry, with multiple key models participating in large aircraft manufacturing [1]

Core Viewpoint - The company, Kede CNC (688305.SH), specializes in manufacturing and processing core components for large aircraft, providing advanced machining solutions for the aerospace industry [1] Product Offerings - The company's products cover a wide range of core components in large aircraft manufacturing, including engines and structural parts [1] - In the engine sector, the company offers five-axis vertical and horizontal machining centers, six-axis five-linkage blade processing centers, and high-speed blade tip grinding centers for efficient processing of blades, casings, and disks [1] - For structural components and landing gear, the company provides five-axis horizontal turning and milling composite machining centers, as well as various milling products for the production of landing gear, wings, ribs, and frame components [1] - The five-axis gantry machine GMC3060 is designed for efficient processing of large aerospace titanium alloys, aluminum alloys, and non-metallic composite materials [1] Clientele and Market Reach - The company has supplied equipment to 30 main engine manufacturers and research institutes under the Aviation Industry Corporation of China (AVIC) [1] - It has provided equipment to nearly 100 supporting manufacturers in the aviation industry, indicating a strong market presence [1] - Several of the company's main models are involved in the manufacturing of large aircraft, showcasing its integral role in the aerospace supply chain [1]

Core Viewpoint - The company reported a decline in net profit and revenue for Q3 2025, primarily due to decreased sales and increased share-based payment expenses, but continues to focus on high-end product launches and expanding into civil applications in the aerospace industry, maintaining a "buy" rating [1][4]. Financial Performance - For Q1-Q3 2025, the company achieved revenue of 400 million yuan, a year-on-year increase of 5.01%, while net profit attributable to shareholders was 64 million yuan, a year-on-year decrease of 11.53% [1]. - In Q3 2025, revenue was 106 million yuan, reflecting a year-on-year decrease of 15.97% and a quarter-on-quarter decrease of 35.32%. Net profit for Q3 was 15 million yuan, down 37.56% year-on-year and 46.80% quarter-on-quarter [1]. - The gross margin for Q1-Q3 2025 was 38.71%, a decrease of 3.97 percentage points year-on-year, and the net margin was 15.90%, down 3.01 percentage points year-on-year [2]. Cost and Expense Analysis - The company's expense ratio for Q1-Q3 2025 was 22.79%, an increase of 2.09 percentage points year-on-year. The breakdown includes sales expense ratio at 8.61%, management expense ratio at 6.88%, R&D expense ratio at 7.53%, and financial expense ratio at -0.24% [2]. - The increase in management expenses was attributed to rising operating income and corresponding cost increases, while R&D expenses rose due to increased investment and personnel [2]. Product and Market Strategy - The company has established a complete product layout, forming a competitive advantage with a fully controllable supply chain, with applications across various sectors including aerospace, energy, automotive, and medical [3]. - Recent innovations include high-value products such as high-speed blade tip grinding centers and five-axis horizontal machining centers, contributing to new revenue growth [3]. - The company is expanding into emerging fields like low-altitude economy and humanoid robotics, providing high-precision manufacturing equipment for components in drones and helicopters [3]. Profit Forecast and Valuation - The company has revised down its net profit forecasts for 2025-2027 by 5.82%, 10.38%, and 7.64%, respectively, projecting net profits of 163 million, 210 million, and 268 million yuan, with a three-year compound growth rate of 27.25% [4]. - The estimated EPS for 2025, 2026, and 2027 is 1.22, 1.58, and 2.01 yuan, respectively, with a target price of 81.74 yuan based on a PE ratio of 67 times for 2025 [4].

Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 81.74 [7]. Core Views - The company reported a revenue of RMB 400 million for the first three quarters of 2025, representing a year-on-year increase of 5.01%, while the net profit attributable to shareholders was RMB 64 million, a decrease of 11.53% year-on-year. The third quarter saw a revenue of RMB 106 million, down 15.97% year-on-year and 35.32% quarter-on-quarter, primarily due to a decrease in sales revenue and an increase in share-based payment expenses [1]. - The company is focusing on high-end product launches to achieve domestic substitution and is deepening its engagement in the aerospace industry while continuously expanding applications in the civilian sector. The outlook for the company leading high-end machine tool domestic substitution is positive [1]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company's gross margin was 38.71%, down 3.97 percentage points year-on-year, and the net profit margin was 15.90%, down 3.01 percentage points year-on-year. The decline in gross margin is attributed to the lower gross margin of the automation production line business, which is rapidly increasing in proportion [2]. - The expense ratio for the first three quarters of 2025 was 22.79%, an increase of 2.09 percentage points year-on-year. The sales expense ratio, management expense ratio, R&D expense ratio, and financial expense ratio were 8.61%, 6.88%, 7.53%, and -0.24%, respectively [2]. Product and Market Positioning - The company has a complete product layout, forming a competitive advantage of full industry chain autonomy. It has four general technology platform products and four specialized technology platform products, widely used in aerospace, energy, automotive, shipbuilding, molds, low-altitude economy, and medical fields [3]. - The company is expanding into emerging fields, focusing on low-altitude economy and humanoid robots. It is developing high-end precision manufacturing equipment for components of drones and helicopters, and its control algorithms and servo drives can be adapted for humanoid robot control systems [4]. Profit Forecast and Valuation - The company's net profit forecasts for 2025-2027 have been revised down by 5.82%, 10.38%, and 7.64%, respectively, to RMB 163 million, RMB 210 million, and RMB 268 million, with a three-year compound growth rate of 27.25%. The corresponding EPS is projected to be RMB 1.22, RMB 1.58, and RMB 2.01 [5]. - The company is assigned a PE valuation of 67 times for 2025, leading to a target price of RMB 81.74, down from the previous value of RMB 87.10 [5].

Investment Rating - The report does not explicitly state an investment rating for the general equipment industry or the specific company being analyzed [1]. Core Insights - The company is strategically positioning itself in the civil sector, focusing on electric vehicles, medical equipment, and civil aviation [17]. - In 2024, the production of electric vehicles in China is projected to reach 12.888 million units, reflecting a year-on-year growth of 34.4%, while sales are expected to be 12.866 million units, with a growth of 35.5% [17]. - The company has introduced advanced machining centers tailored for the electric vehicle industry, emphasizing high efficiency and low energy consumption [17]. - The company is also expanding its product offerings in the medical sector, particularly for ergonomic implants, in response to the aging population, which is expected to constitute 22.0% of the total population by 2024 [17]. - The company has launched several high-end equipment models for the aviation sector, including five-axis machining centers designed for efficient processing of aircraft components [18]. Summary by Sections 1. Basic Research Information - The research was conducted on the company Kede CNC, which operates in the general equipment industry, on February 27, 2025 [13]. 2. Detailed Research Institutions - The research involved institutions such as CITIC Securities and Renqiao (Beijing) Asset Management [14]. 3. Research Institution Proportion - The report does not provide specific data on the proportion of research institutions involved [15]. 4. Main Content Information - The company is actively developing products for humanoid robots, leveraging its control algorithms and servo drive technologies to meet the manufacturing needs of this sector [19]. - The company has developed a large thrust linear motor that enhances control precision and acceleration, suitable for manufacturing components like screws used in humanoid robots [19].