Summary of Yingliu (603308.SS) Conference Call Company Overview - **Company**: Yingliu, a leading domestic manufacturer of high-end precision cast components, primarily focused on gas turbine and aerospace components. The company has transitioned from traditional casting to high-end markets since 2015, with a current global market share below 1% [1][21][23]. Industry Context - **Industry**: Gas turbine supply chain, which is currently experiencing shortages, particularly in hot-section components like turbine blades. Major OEMs such as Siemens Energy, GE Vernova, and Mitsubishi Heavy Industries (MHI) report high capacity utilization and extended backlogs, indicating a supply-demand imbalance that is expected to last until at least 2028-2030 [2][28][39]. Key Insights and Projections - **Market Opportunity**: Yingliu is well-positioned to capitalize on the gas turbine supply shortages due to its available capacity, competitive average selling prices (ASPs), and ongoing R&D advancements. The company aims to increase its market share to approximately 4% with Siemens Energy and 8% with Baker Hughes by 2030 [3][58]. - **Revenue Growth**: Yingliu's revenue from gas turbine components is projected to grow from 29% of total revenue in 2025 to 48% in 2030, while aerospace components are expected to rise from 15% to 20% over the same period. Total revenue is forecasted to increase from Rmb2,943 million in 2025 to Rmb8,847 million by 2030, representing a CAGR of 25% [4][110]. - **Earnings Growth**: The company anticipates a 40% CAGR in earnings per share (EPS) from 2025 to 2030, driven by operating leverage and improved gross profit margins (GPM), which are expected to rise from 36% in 2025 to 43% in 2030 [4][110]. Customer Relationships and Contracts - **Key Customers**: Yingliu has secured long-term agreements with major clients including Siemens Energy, Baker Hughes, GE Aerospace, and Safran. The company expects significant revenue growth from these relationships, particularly with Siemens Energy, which is projected to become the largest customer by 2030, contributing around Rmb1 billion in revenue [61][98]. Competitive Positioning - **Price Advantage**: Yingliu's products may have a price advantage of approximately 20%-30% compared to global peers, which could enhance its competitiveness in securing contracts with overseas customers [10][83]. - **Employee Growth**: Yingliu's subsidiary, Yingliu Hangyuan, plans to increase its workforce by 40% from the end of 2024 to the end of 2025 to support anticipated order ramp-ups [16][78]. Financial Metrics - **Valuation**: The company is valued at a target price of Rmb52.7, implying an 18% upside from current levels. The valuation is based on a 30x P/E ratio for 2028E, discounted to 2026E using a 10% cost of equity [1][4]. - **R&D and Capex**: R&D expenses as a percentage of revenue are expected to decline from 9.2% in 2025 to 8.1% in 2030, reflecting increased production efficiency. Capex as a percentage of revenue is projected to decrease significantly as the company moves past its heavy investment phase [110][112]. Additional Considerations - **Nuclear and Aerospace Segments**: Yingliu is also expanding into nuclear applications and the commercial aerospace industry, with expected revenues from nuclear components reaching Rmb1 billion by 2030. The aerospace segment is anticipated to become a significant growth driver, contributing 20% of total revenue by 2030 [106][98]. - **Yield Rates**: Current yield rates for different blade types are 70-80% for equiaxed and directionally solidified crystals, but only 10-60% for single crystal blades, indicating room for improvement in production efficiency [85][90]. This comprehensive overview highlights Yingliu's strategic positioning within the gas turbine and aerospace markets, its growth potential, and the financial metrics that support its investment case.

Financial Performance - Record adjusted earnings per share of $2.95 in Q2 2025, up 8% versus 2Q24, with segment margins of 23.9%, up 20 bps versus 2Q24[4] - Sales reached $7.028 billion in 2Q 2025, an 11% increase compared to $6.350 billion in 2Q 2024[23] - Adjusted earnings increased by 5% from $1.096 billion in 2Q 2024 to $1.155 billion in 2Q 2025[23] Growth and Orders - Organic growth of 8%, driven by 12% growth in Electrical Americas, 11% in Aerospace and 7% in Electrical Global[4] - Electrical Americas data center orders are up approximately 55% and revenue up approximately 50% versus 2Q24[5] - Order acceleration in Electrical Americas up 2% and strong Aerospace growth up 10% on a rolling 12-month basis[4] Segment Performance - Electrical Americas sales increased by 16% to $3.350 billion in 2Q 2025 from $2.877 billion in 2Q 2024[24] - Aerospace sales increased by 13% to $1.080 billion in 2Q 2025 from $955 million in 2Q 2024[29] - Vehicle segment sales decreased by 8% to $663 million in 2Q 2025 from $723 million in 2Q 2024[31] Guidance and Outlook - Raising 2025 guidance for organic growth, segment margin and adjusted EPS at the midpoint[6] - Full year 2025 adjusted earnings per share guidance is $11.97 - $12.17 and organic growth is 8.5% - 9.5%[39] - Full year 2025 free cash flow guidance is $3.7 billion - $4.1 billion and share repurchases are $2.0 billion - $2.4 billion[39]