Haitong International has released a research report forecasting that TSUGAMI CHINA's (01651) revenue for fiscal years 2026 to 2028 will reach 5.439 billion, 6.984 billion, and 8.601 billion yuan, respectively. Net profit attributable to shareholders is projected to be 1.053 billion, 1.132 billion, and 1.589 billion yuan, with earnings per share estimated at 2.8, 3.49, and 4.23 yuan. Applying a price-to-earnings (P/E) ratio of 15 times for fiscal 2026, the corresponding target price is HK$46.94, leading to an initial "Outperform" rating.
TSUGAMI CHINA specializes in the manufacturing and sales of high-end CNC machine tools and has grown into one of the largest foreign-brand CNC machine tool manufacturers in the Chinese market. The company has demonstrated rapid performance growth in recent years, achieving a net profit attributable to shareholders of 479 million yuan in fiscal 2024, which surged 63% year-on-year to 782 million yuan in fiscal 2025.
The report also highlighted that for the six months ending last September, the company's sales revenue increased by approximately 26.2% year-on-year, while net profit attributable to shareholders rose by about 47.7%, indicating solid growth momentum in its core business. Its traditional operations are concentrated in four key downstream sectors: automotive components, IT and communication electronics, industrial automation, and medical devices, with the automotive industry being the primary growth driver over the past two years.
The domestic automotive industry is expected to maintain stable conditions this year, and the trend toward miniaturization of components for new energy vehicles is anticipated to enhance the company's market penetration, supporting steady growth in its automotive-related business. Meanwhile, the 3C sector is showing signs of recovery, driven by product upgrades from leading smartphone manufacturers.
Haitong International anticipates that from 2026 to 2028, TSUGAMI CHINA's automotive-related business will maintain a stable growth trajectory, its 3C business will continue to recover, and new ventures such as AI will experience rapid expansion. Bolstered by these factors, the company's machine tool business is projected to sustain a stable growth rate of 20% to 25%.
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