Investment Rating - The investment rating for the company is "Buy-A" with a target price of 36.6 CNY, maintaining the rating [5]. Core Views - The company reported a revenue of 4.417 billion CNY for the first three quarters of 2025, representing a year-on-year growth of 22.32%. The net profit attributable to shareholders was 415 million CNY, up 50.10% year-on-year [1]. - The global robotics industry is experiencing sustained high demand, driven by the integration of AI and intelligent manufacturing, with a projected growth in global robot installations by 6% to 575,000 units in 2025 [2]. - The company's MIM and SMC businesses are benefiting from the high demand in the AI server industry, with significant revenue growth and improved gross margins expected [3]. - The company is positioned as a core beneficiary in the magnetic materials and structural components sector during the AI computing cycle, with projected revenues of 6.235 billion CNY, 7.239 billion CNY, and 8.295 billion CNY from 2025 to 2027 [8]. Financial Performance - For the first three quarters of 2025, the company achieved a gross margin of 25.06% and a research expense ratio of 5.62%, reflecting operational efficiency improvements [2]. - The company’s revenue is expected to grow at a compound annual growth rate (CAGR) of 62.1% from 2023 to 2025, with net profit projected to reach 608 million CNY in 2025 [10]. - The company’s earnings per share (EPS) is forecasted to be 0.96 CNY in 2025, with a price-to-earnings (PE) ratio of 31.4 [10]. Market Outlook - The AI server market is projected to grow from 158.7 billion USD in 2025 to 222.7 billion USD by 2028, with generative AI servers increasing their market share from 29.6% to 37.7% [3]. - The company is developing integrated solutions for AI servers, combining structural, magnetic, and thermal components, which is expected to drive mid-term growth [3].

Core Viewpoint - The report highlights the financial performance and operational developments of Dongmu New Materials Group Co., Ltd. for the first half of 2025, showcasing significant growth in revenue and net profit, driven by advancements in powder metallurgy technology and strategic partnerships in the automotive and consumer electronics sectors [2][3][9]. Company Overview and Financial Indicators - Dongmu New Materials Group Co., Ltd. reported a revenue of approximately 2.93 billion RMB for the first half of 2025, representing a 24.51% increase compared to the same period last year [3]. - The total profit for the period reached approximately 342 million RMB, marking a 54.68% increase year-on-year [3]. - The net profit attributable to shareholders was approximately 261 million RMB, reflecting a 37.61% increase compared to the previous year [3]. - The net cash flow from operating activities surged by 252.25%, amounting to approximately 493 million RMB [3]. Industry and Main Business Situation - The company operates in the powder metallurgy (PM) industry, which is characterized by advanced metal forming technologies that offer energy savings, material efficiency, and environmental benefits [4][5]. - The automotive sector remains a key market, with automotive parts sales accounting for 75.14% of the company's P&S main business revenue, amounting to approximately 948 million RMB, a year-on-year increase of 12.71% [4]. - The company’s SMC technology platform experienced a revenue decline of 2.68%, primarily due to intense market competition leading to price reductions [5]. Market Trends and Opportunities - The Chinese automotive industry showed robust growth in the first half of 2025, with production and sales increasing by 12.5% and 11.4%, respectively, and a significant rise in the production and sales of new energy vehicles (NEVs) [4]. - The demand for precision gears in the robotics industry presents new opportunities for the company’s P&S and MIM technologies, as these methods are well-suited for manufacturing high-precision components [5][6]. - The rapid development of AI and high-power computing requirements in data centers is creating substantial market demand for the company's soft magnetic composite materials [6][7]. Financial Performance Analysis - The company achieved a main business revenue of approximately 2.91 billion RMB, with P&S, SMC, and MIM segments contributing 1.26 billion RMB, 444 million RMB, and 1.21 billion RMB, respectively [9]. - The increase in revenue is attributed to higher sales from the MIM technology platform, which saw a 57.26% year-on-year growth [9]. - The company’s focus on cost reduction and efficiency improvements has positively impacted its profit margins and overall financial health [9]. Competitive Advantages - The company has established a strong R&D foundation with a national-level technology center and numerous patents, enhancing its competitive edge in the PM industry [10][11]. - The implementation of lean production practices and advanced information systems has improved operational efficiency and product quality [11][12]. - The company has built a robust market presence in various sectors, including automotive, consumer electronics, and renewable energy, leveraging its technological capabilities and customer relationships [12][13].