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China's Precision Tsugami H1 profit rises on increased 3C, AI liquid cooling demand

By Reuters News


Overview

  • China CNC machine tool maker's interim revenue rose 21% yr/yr on strong 3C, AI demand

  • Net profit for the period rose 32% yr/yr, with improved gross and net margins

  • Company declared interim dividend of HK$0.9 per share for the half-year


Outlook

  • Company expects external tariff pressures and geopolitical disruptions to remain sources of volatility

  • Precision Tsugami sees solid medium- and long-term fundamentals for China's precision machining sector

  • Company anticipates demand growth in 3C, AI liquid cooling, and humanoid robot segments


Result Drivers

  • 3C AND AI SECTORS - Co said strong demand from 3C and AI liquid cooling industries drove revenue growth and offset weaker automotive demand

  • PRODUCT MIX AND COST CONTROL - Higher-margin precision models and cost reduction measures improved gross and net margins

  • PRICE COMPETITION - Co adopted targeted pricing on strategic models to maintain customer loyalty amid intense domestic competition


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

H1 Revenue

RMB 3.02 bln

H1 Net Income Attributable

RMB 663.70 mln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the industrial machinery & equipment peer group is "buy"

  • Wall Street's median 12-month price target for Precision Tsugami (China) Corporation Ltd is HK$72.00, about 96.2% above its November 11 closing price of HK$36.70

  • The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 12 three months ago


Reuters Recommended Reads

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  • Nov 10 - Ambiq Micro Q3 sales jump 110%, beat estimates on edge AI demand

  • Nov 11 - Volkswagen's China EV venture has no new models planned for next two years, sources say


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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