Core Viewpoint - The company has shown significant revenue growth and profit improvement in the first half of 2025, leading to an upward revision of revenue and profit forecasts for the coming years [1][3]. Group 1: Financial Performance - In the first half of 2025, the company's revenue reached $2.242 billion, a year-on-year increase of 6.8%, while net profit attributable to shareholders was $63.48 million, representing a threefold increase [1]. - The gross margin improved to 11.5%, up 1.5 percentage points year-on-year, and the net margin increased to 2.8%, up 2.1 percentage points year-on-year, driven by increased sales and improved operational efficiency [1]. Group 2: Regional Performance - Revenue from North America, Asia-Pacific, and EMEASA regions in the first half of the year was $1.14 billion, $690 million, and $400 million, respectively, with year-on-year growth rates of 1.7%, 15.5%, and 9.4% [2]. - The Asia-Pacific region showed the highest growth, with significant contributions from projects involving major Chinese automotive companies [2]. Group 3: Business Segments - Revenue from different business segments in the first half included $1.53 billion from EPS, $230 million from CIS, $90 million from HPS, and $400 million from DL, with year-on-year growth rates of 8.6%, 2.9%, 1.7%, and 3.8%, respectively [2]. - The company launched 31 projects in the first half, with 24 of them located in the Asia-Pacific region, including collaborations with companies like Xiaomi and BYD [2]. Group 4: Technological Advancements - The company secured new orders worth $1.5 billion in the first half, maintaining its annual order target of $5 billion, with a focus on advanced steering technologies [3]. - The launch of the Motion IQ software suite enhances the company's competitive edge by providing advanced vehicle dynamics features and accelerating product development [3]. Group 5: Investment Outlook - The revenue forecasts for 2025-2027 have been revised to $4.59 billion, $4.98 billion, and $5.48 billion, with expected growth rates of 7.3%, 8.6%, and 10.0%, respectively [1][3]. - The net profit forecasts for the same period are projected to reach $120 million, $150 million, and $180 million, with growth rates of 93.8%, 23.4%, and 23.0% [1][3]. - The target price has been raised to HKD 8.0, corresponding to an 18.5 times forecasted P/E ratio for 2026, indicating a potential upside of 33% from the current price [1][3].

Investment Rating - The report maintains a "Buy" rating for the company, with an updated target price of HKD 8.72, corresponding to approximately 20 times the 2025 EPS [3][5]. Core Insights - The company's performance in the first half of 2025 exceeded expectations, with total revenue increasing by 6.8% year-on-year to USD 2.24 billion, accounting for 51% of the full-year revenue forecast. Net profit surged by 304.5% year-on-year to USD 63 million, representing 57% of the annual net profit forecast [1][3]. - The growth in the Asia-Pacific region is a significant driver of the company's strong performance, with revenue from this region increasing by 15.5% year-on-year to USD 690 million, contributing to 31% of total revenue [1]. - The company is expanding its order book, with a forecasted addition of USD 5 billion in new orders for 2025, including projects in North America and Europe [2]. Summary by Sections Financial Performance - In 1H25, the company reported a gross margin of 11.5%, up by 1.5 percentage points year-on-year, and an EBITDA of USD 230 million, reflecting a 16.8% increase year-on-year [1]. - The EBITDA margin for the Asia-Pacific region was 16.9%, while the EMEASA region saw an EBITDA margin of 8.8%, up by 6.8 percentage points year-on-year [1]. Revenue and Profit Forecast - The company’s total revenue is projected to grow from USD 4.207 billion in 2023 to USD 5.055 billion by 2027, with a compound annual growth rate (CAGR) of approximately 6.7% [4]. - The net profit attributable to the parent company is expected to increase significantly from USD 37 million in 2023 to USD 234 million by 2027, with a notable growth rate of 129.3% in 2025 [4][8]. Order and Market Expansion - The company has successfully secured new orders in various regions, with 47% of new orders coming from the Asia-Pacific region, 30% from EMEASA, and 23% from North America [1][2]. - The management anticipates that the company will continue to leverage its technological advantages in steering systems to expand into new business areas, particularly in the field of drive-by-wire chassis systems [2].