Key takeaway

The company achieved excellent annual performance in 2025. Thanks to the recovery of the lithium battery industry, the main business bottomed out and rebounded. New energy lithium battery equipment, wire harness equipment, semiconductor equipment and accessories businesses all achieved high-speed growth. The continuous optimization of the revenue structure promoted the further improvement of the overall gross profit margin. At the same time, the company accelerated the platform-based development of ultrasonic technology. The exploration of new application scenarios achieved remarkable results. Semiconductor advanced packaging equipment achieved a commercial breakthrough from 0 to 1 and won bids from leading domestic manufacturers. New energy equipment expanded to PACK welding and other links to help customers solve the pain points of production line welding and testing. This laid a foundation for continuous high growth in the future.

Event

The company released its 2025 annual report. The operating revenue in 2025 was RMB774mn, up 32.41% YoY. The net profit attributable to shareholders of the parent company was RMB118mn, up 36.89% YoY. The net profit attributable to shareholders of the parent company after deducting non-recurring profit and loss was RMB93mn, up 133.02% YoY.

The operating revenue in 4Q25 was RMB254mn, up 43.73% YoY and 28.22% QoQ. The net profit attributable to shareholders of the parent company was RMB24mn, down 64.05% YoY and 34.64% QoQ. The net profit attributable to shareholders of the parent company after deducting non-recurring profit and loss was RMB16mn, down 69.13% YoY and 45.29% QoQ.

Quick Take

Lithium battery recovery drives high growth of main equipment business, and PACK welding and wire harness connectors open up incremental growth space.

With the recovery of the downstream power battery market and the high growth of energy storage demand, the lithium battery industry ushered in a recovery in 2025. The operating rate of leading battery factories continued to increase, and orderly production expansion began. As a core equipment provider in the lithium battery manufacturing process, the company significantly benefited from this round of boom recovery. In 2025, the company's new energy battery ultrasonic equipment business revenue was RMB222mn, up 47.08% YoY, achieving a substantial increase. The company fully utilized the technical advantages and customer resources accumulated in the mid-to-high-end industrial application field of ultrasonic equipment to explore the application scenarios of ultrasonic equipment in the new energy field. In addition to continuing to consolidate its leading advantage in the tab welding process of lithium battery cells, it continued to expand to PACK welding and other links. It successively launched BUSBAR (high-voltage connection busbar) welding equipment and CCS (integrated busbar) welding equipment to help customers solve the pain points of production line welding and testing. The company has achieved remarkable results in exploring new application scenarios for ultrasonic technology, continuously extending scenario boundaries and steadily advancing the implementation of new products.

In the field of wire harness connectors, the company continuously consolidates its leading advantage in high-voltage wire harnesses and advances import substitution. Meanwhile, it makes technological breakthroughs and market expansion in low-voltage wire harnesses, keenly tapping into the "aluminum replacing copper" trend brought by cost reduction in low-voltage wire harnesses to further release the application potential of ultrasonic technology. This business achieved a revenue of RMB103mn in 2025, up 26.03% YoY, becoming another growth highlight.

In the accessories field, the company increased R&D efforts for accessories such as welding heads, bottom molds, and cutting knives, and carried out process improvement and cost control. This business achieved a revenue of RMB260mn in 2025, accounting for 33.72% of the main business revenue, up 41.30% YoY. The accessories business is expected to become the core engine for the company to smooth cyclical fluctuations and increase overall profit in the future.

Revenue structure optimization drives gross margin improvement, and impairment provision affects net margin performance.

In 2025, the company achieved a net profit attributable to shareholders of the parent company of RMB118mn, up 36.89% YoY, and achieved a net profit attributable to shareholders of the parent company after deducting non-recurring profit and loss of RMB93mn, up 133.02% YoY, showing a significant improvement on the profit side. In 2025, the company achieved a gross margin of 63.43%, up 6.54 pcts YoY; a net margin of 13.88%, down 0.64 pct YoY; and a net margin attributable to shareholders of the parent company of 15.19%, up 0.50 pct YoY. The gross margin improvement mainly benefited from the company's revenue structure optimization in 2025, as well as the rapid growth and continuous increase in the revenue share of high-margin products such as new energy lithium battery equipment, semiconductor equipment, and accessories. The net margin decline was mainly dragged down by the impairment provision. Based on the principle of prudence, the company made a one-time bad debt provision of RMB42mn for customers such as Safe-Run, which affected the company's net margin in the short term.

Platform-based development of ultrasonic technology, and semiconductor business is expected to become the second growth driver.

In 2025, the company's R&D investment reached RMB160mn, accounting for 20.67% of revenue. It added 69 R&D personnel, an increase of about 24.82% over the end of the previous year. This further enhanced the company's innovation capability and core competitiveness, and improved the portfolio of the platform-based development of ultrasonic technology. The rapid development of the company's semiconductor business in 2025 is the best proof of this. In 2025, the company's semiconductor ultrasonic equipment business achieved a revenue of RMB96mn, increasing by 105.37% YoY, showing explosive growth and is expected to become the company's second growth driver. In the semiconductor field, the company continues to strengthen its business of power semiconductor packaging and testing process equipment, and the trial production share of core equipment such as ultrasonic bonding machines, ultrasonic terminal welding machines, ultrasonic pin welding machines, and ultrasonic scanning microscopes continues to expand. In the field of advanced semiconductor packaging, the advanced ultrasonic scanning microscope launched by the company can be applied to product inspection links such as semiconductor wafers, 2.5D/3D packaging, and panel-level packaging, and has successfully obtained orders from leading domestic memory chip manufacturers and completed delivery; the ultrasonic die bonder (ultrasonic thermocompression welder) has also obtained formal customer orders, and product verification is progressing smoothly.

Earnings forecast and investment recommendation

It is estimated that from 2026 to 2028, the company will achieve operating revenues of RMB1.067bn, RMB1.482bn, and RMB2.082bn respectively, up 37.87%, 38.92%, and 40.42% YoY respectively; the company will achieve net profit attributable to shareholders of the parent company of RMB249mn, RMB359mn, and RMB515mn respectively, up 111.93%, 44.05%, and 43.48% YoY respectively, corresponding to PE multiples of 60.39x, 41.93x, and 29.22x respectively, and considering the platform attribute of the company's ultrasonic technology and its potential in emerging directions such as advanced packaging, solid-state batteries, and composite current collectors, we continue to give it a "Buy" rating.

Risks:

1. Technological change and product research and development risks : The downstream application industries of the company's products mainly include new energy batteries, wire harnesses, semiconductors and other industries, which have high requirements for the technical and process level of equipment. The technical routes and production processes of downstream industries change rapidly, and corresponding equipment enterprises need to make continuous research and development investments in products according to the technological development trends of downstream industries, and constantly update technologies and improve performance to meet customer requirements. If the company's technology research and development fails to achieve the expected results and form products, fails to meet the requirements of downstream industry technology development for product technology upgrades, or process changes lead to the replacement of existing equipment application links, it will have an adverse impact on the company's operations.

2. High customer concentration and major customer reliance risks: The company has the risks of high customer concentration and reliance on major customers, and if the company's product quality, stability or technical parameters fail to meet the standards of major customers, or the ultrasonic welding equipment of the company's competitors improves in performance and cost-effectiveness and becomes more competitive, thereby leading to major customers changing suppliers, it will have an adverse impact on the company's business in the new energy battery welding field.

3. Bad debt risk of accounts receivable: By the end of 2025, the book value of the company's accounts receivable was RMB280.1853mn, accounting for 14.19% of current assets. The book value of the company's accounts receivable is relatively large. With the expansion of business scale, the company's accounts receivable scale may further increase. If the macroeconomic situation deteriorates or customers experience major operational difficulties, the company's accounts receivable will not be recovered on schedule. This will have an adverse impact on the company's liquidity and profitability.