Tiangong International (00826), having weathered negative pressures, may now be entering an optimal investment period. On April 30th, the leading supplier of titanium alloys for consumer electronics, Tiangong International (00826), released its first-quarter financial report for 2026. The report showed revenue of approximately 104 million yuan and net profit attributable to shareholders of 99,500 yuan. Compared to the same period in 2025, both revenue and net profit showed a significant sequential decline. However, looking beyond the numbers, this performance dip is not indicative of a deterioration in the company's fundamentals but rather a result of typical "supply chain rhythm disruptions." According to industry chain sources, the core reason for Tiangong's weak performance lies in engineering challenges encountered with screen-related components during the development of Apple's new foldable phone. This issue forced Apple to adjust the overall production schedule for the device, inadvertently impacting suppliers of other components, including Tiangong. Notably, despite the clear pressure on performance, Tiangong's stock price fell only 4.4% the day after the earnings release, with no signs of panic selling. This market reaction confirms earlier assessments that negative factors for Tiangong were largely already priced in, and even suggested a "sell-the-news" scenario had occurred. Feedback from the supply chain indicates that several Apple products this year will utilize titanium alloys. Specifically, the bulk supply of border materials for Apple's first foldable phone resumed normalcy in March, with order demand expected to be released progressively. This suggests the first quarter likely marked the low point for Tiangong's performance. Looking ahead, as shipments to its core client bottom out and reverse, combined with the company's expansion into high-end materials and accelerated diversification into various application fields, Tiangong's performance is expected to return to a fast growth track. This could lead to a "Davis Double Play" of simultaneous earnings and valuation recovery in the capital markets, making the present a potential golden window for investment in Tiangong International.
Apple's Titanium Application Set for a "Leapfrog Evolution" in 2026, First Foldable Device a "Titanium Behemoth" As a core supplier of titanium materials to Apple, Tiangong International's performance is highly synchronized with Apple's product launch cycles. A prime example is Apple's initial use of titanium alloy for the iPhone 15 Pro series mid-frame in 2023, which sparked an industry trend and drove explosive growth for Tiangong that year. Although the sharp reduction in Apple's titanium usage in Q1 2026 caused temporary performance pain for Tiangong, the full-year market expectation is that 2026 will be a year of "leapfrog evolution" for Apple in titanium application. Multiple Apple products are anticipated to use titanium alloys this year, with the total value content expected to surge significantly. Firstly, the strategic importance of titanium in the Apple Watch lineup is set to be further consolidated and elevated. In November 2025, Apple launched the Apple Watch Series 11 and Apple Watch Ultra 3, both featuring 3D-printed titanium cases, setting a precedent for mass-scale 3D printing of titanium alloys in consumer electronics. Based on current industry analysis and market expectations, this year's fall event may see material strategy adjustments for the Apple Watch Series 12 and Ultra 4. Supply chain sources suggest Apple is considering expanding the use of titanium alloys in the Series 12 to more mid-to-high-end models, using it as a lever to increase average selling prices and redefine product tiers. The Ultra 4's chassis design is also highly anticipated, expected to achieve even greater thinness and lightness through advanced titanium alloy processes while maintaining ruggedness. Secondly, the return of titanium to Apple's Pro series is a near-certainty. Although the iPhone 17 Pro temporarily moved away from titanium due to cost control measures, as the supply chain matures and technical hurdles are resolved, the Pro series is expected to reintroduce titanium solutions to differentiate product tiers and rebuild competitive barriers in the high-end segment. Recent leaks of metal mockups and supply chain reports indicate the iPhone 18 Pro will adopt a new generation of aerospace-grade titanium alloy, reducing weight by 12% while further optimizing feel and stain resistance. Even if the iPhone 18 Pro is delayed, the industry trend is clear; if the titanium mid-frame's return is pushed to the iPhone 19 Pro, suppliers would likely begin shipments by Q4 2026 at the latest, meaning demand pull from Apple's Pro series would accelerate by then. Furthermore, Apple's first foldable device, the iPhone Fold, dubbed a "Titanium Behemoth," is expected to debut in fall 2026. This device not only represents a breakthrough in hardware integration but also achieves an unprecedented level of "titanium value." Based on intensive reports from supply chain and industry analysts, the iPhone Fold showcases Apple's ambitious material strategy. Its chassis frame will fully utilize the new aerospace-grade titanium alloy, and its core hinge system will implement a "titanium alloy + stainless steel" composite structure—the former for extreme lightweighting, the latter for structural rigidity and deformation resistance. Beyond this, to achieve a perfect balance between screen flatness and device weight, titanium alloy will also be extensively used in key internal support components like screen backing plates and hinge covers. This means the iPhone Fold's "titanium content" will span the entire chain from external structure to internal framework. In other words, its construction integrates a titanium mid-frame, titanium hinges, and multiple substantial internal supports. Crucially, to manage the complex spatial layout, Apple is innovating in manufacturing processes, widely introducing 3D printing technology to form the hinge covers and the intricate, ultra-thin structures of the mid-frame. The application of this additive manufacturing (3D printing) significantly increases processing costs, which is a core component of the "titanium value." Compared to traditional brushed titanium alloy borders, the large-scale adoption of 3D printing substantially raises the amortized manufacturing cost per unit. This combination of material and process innovation directly contributes to a significant rise in the iPhone Fold's overall titanium value. As Apple's flagship "decade-in-the-making" product, the iPhone Fold is set not only to break Apple's historical price records but also to reshape the competitive landscape of the high-end foldable market. Market estimates suggest an overseas price anchor of $2,000-$2,500, with the Chinese starting price potentially exceeding 14,000-15,000 RMB, and the top-tier version possibly reaching 20,000 RMB, directly claiming the title of Apple's most expensive iPhone ever. Current market consensus expects the iPhone Fold to be announced in September, though predictions regarding mass production timelines vary. Optimistic views suggest a launch delay of only a few weeks post-announcement; more cautious opinions point to potential pressure on the production ramp due to a ~65% yield rate bottleneck with liquid metal hinges, potentially pushing volume production to early August, while the announcement date remains unchanged. Even under the most pessimistic scenario, initial shipments are expected by December. Despite uncertainties in the production schedule, market consensus on the iPhone Fold's growth potential is strong. For instance, Tianfeng International forecasts 2026 shipments of 8-10 million units for the iPhone Fold. As production bottlenecks are resolved, 2027 shipments are predicted to experience explosive growth, climbing to 20-25 million units. This forecast strongly supports the industry consensus that the iPhone Fold has the potential to become Apple's next blockbuster product. It is foreseeable that the large-scale application of titanium alloys across multiple new Apple products in 2026 will directly drive significant expansion in upstream titanium demand. More importantly, as an industry bellwether, Apple's lead will pressure the Android camp to accelerate their adoption of titanium, creating a domino effect that is poised to substantially increase the overall demand for titanium alloys across the consumer electronics sector.
Multi-Dimensional Forward-Looking Strategy Enters Harvest Phase, Expansion into High-Value-Added Fields Shows Significant Results Amid the industry trend of Apple accelerating the penetration of titanium alloys into consumer electronics, Tiangong International, as a key link in the core supply chain, is positioned to be a major beneficiary. The company's earlier multi-dimensional forward-looking investments in high-end capacity expansion, production equipment upgrades, and product portfolio optimization are now entering a harvest phase. Leveraging its strong competitive moat, Tiangong is well-placed to capture the incremental benefits from this industry upswing. Regarding capacity expansion, Tiangong's 2025 funded project, the "3,000-ton annual production line for high-end titanium and titanium alloy rods and wires," is progressing orderly. Upon full ramp-up, the company's total titanium alloy capacity will jump from 7,000 tons/year to the 10,000-ton threshold, an increase of over 40%. This capacity release will not only effectively match the continuously expanding downstream order demand but also significantly enhance the company's growth flexibility and supply resilience. In terms of equipment upgrades, the No. 2 EB furnace project within Tiangong's aforementioned funded project has successfully completed hot testing, producing a 10-ton-grade titanium ingot with a diameter of 720mm. This achievement enables the comprehensive recycling of production waste, effectively optimizing the process flow, reducing marginal costs, and establishing a dual-track supply system of "primary + recycled" materials. This significantly strengthens Tiangong's competitiveness, especially in the context of Apple's mandatory push for recycled titanium materials. In product portfolio optimization, leveraging the deep powder metallurgy expertise of its parent company, Tiangong International, and aided by strategic mergers and acquisitions, Tiangong has successfully expanded its business from traditional wires, plates, and pipes into the high-end titanium alloy powder sector, making a leap into the additive manufacturing raw material arena. In mid-2025, through its joint venture Tiangong Titanium Crystal, Tiangong successfully integrated Pinde New Materials' plasma atomization production line, creating a closed-loop, full-industry-chain capability from titanium alloy master alloys to 3D printing powders. This not only provides Tiangong with a diverse portfolio of additive manufacturing raw materials—including titanium alloy powder, copper alloy powder, and high-temperature alloy powder—catering to various forming process needs, but also rapidly equips it with batch preparation processes and mature production capacity for additive manufacturing. Furthermore, it precisely fills the domestic supply gap for high-end titanium alloy powders, where the localization rate is below 30%. Currently, Tiangong Titanium Crystal has planned a second-generation plasma beam atomization powder production line with a total planned capacity of 3,000 tons/year and has initiated construction of the first phase with 1,000 tons/year capacity. With its forward-looking full-industry-chain layout in additive manufacturing, Tiangong is poised to fully capitalize on the explosive growth in raw material demand from major brands adopting 3D printing, thereby driving leapfrog growth for its titanium alloy business in the consumer electronics sector. Notably, Tiangong's additive manufacturing footprint is highly extensible. Its technology and capacity serve not only consumer electronics but also precisely target sectors with extremely high material performance requirements, such as aerospace and medical health, further solidifying Tiangong's competitive moat in these newly expanded industries. To date, Tiangong has demonstrated tangible results from its diversification strategy. In aerospace and medical health, the company has successfully broken through technical barriers and achieved multi-dimensional progress, signifying that its high-value-added businesses are transitioning from concept to tangible earnings increments and protective moats. It is understood that as early as 2025, Tiangong successively obtained EN9100D and GJB9001C quality system certifications in the aerospace sector, achieving integration of ISO, AS, and GJB standards, significantly enhancing the management standardization and execution for aerospace products. Furthermore, the company successfully passed on-site and product audits by North American clients like GE, becoming a qualified supplier of master alloys for aerospace-grade titanium alloy powders. Crucially, Tiangong's first order for titanium alloy wire used in aerospace-grade fasteners has been formally delivered, successfully achieving import substitution for related products and advancing the localization process of high-end titanium materials, fully demonstrating the company's leading capability in high-end titanium wire manufacturing. In the medical health sector, Tiangong has completed ISO13485 medical device quality system certification. The company now possesses the capability to produce medical-grade precision rods and wires, focusing on R&D of high-end medical titanium alloys like TC4ELI and Ti6Al7Nb, providing solid support for the high-quality development of the medical health industry. This multi-pronged business structure not only significantly broadens Tiangong's long-term growth boundaries but also greatly enhances the visibility and certainty of its earnings growth. The rise of high-value-added segments like additive manufacturing, aerospace, and medical health is particularly important, as it will drive a shift in the company's valuation logic from a traditional cyclical manufacturer to a high-end materials platform, thereby reshaping its valuation framework in the capital markets.
Several brokerages have recently issued research reports expressing optimism about Tiangong International's future development. Kaiyuan Securities stated that the temporary adjustment in consumer electronics demand does not change Tiangong's fundamental strengths, highlighting the company's readiness in high-end titanium materials and maintaining a "Buy" rating. Huayuan Securities noted that Tiangong, with its core titanium material processing technology, is poised to see sustained growth in its consumer electronics base demand while continuously developing high-end materials like titanium alloy powders. They anticipate an expansion into new application scenarios such as aerospace and medical health, forecasting Tiangong's net profit attributable to shareholders for 2026-2028 to be 200 million, 300 million, and 360 million yuan respectively, and also maintaining a "Buy" rating.
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