TSUGAMI CHINA expects a mid-term profit increase of 48%, exceeding 500 million yuan, with growth logic being realized with high quality

In the midst of a high prosperity cycle, TSUGAMI CHINA (01651) has once again delivered a performance forecast that undoubtedly showcases its growth elasticity. During the market break on October 17, TSUGAMI CHINA disclosed its profit warning for the first half of the 2026 fiscal year (April-September 2025), indicating that the company expects to achieve a net profit attributable to shareholders of approximately 502 million yuan, a year-on-year increase of about 48%; and a quarter-on-quarter increase of 14%. What is particularly noteworthy is that this achievement comes against the backdrop of last year's high performance base. Looking back at the company's operational history, TSUGAMI CHINA's highest record for semi-annual net profit attributable to shareholders prior to this was 442 million yuan in the second half of the 2025 fiscal year, with the second highest being 380 million yuan in the first half of the 2022 fiscal year, followed by 340 million yuan in the same period last year. The trend of performance changes indicates that since the 2025 fiscal year, TSUGAMI CHINA's fundamentals have completely passed the phase of adjustment and have re-entered a new round of upward cycle. Zhitong Finance believes that the machine tool industry is a typical cyclical industry, with demand cycles fluctuating in line with macroeconomic cycles. Within this context, as a leading machine tool enterprise, TSUGAMI CHINA's performance trajectory is highly correlated with the industry cycle. However, unlike traditional cyclical industries, the company's development shows a pattern of oscillating growth, where each new cycle's peak performance is significantly higher than that of the previous cycle. Based on the value information released in the company's latest performance forecast, it is evident that TSUGAMI CHINA's current fundamentals are in a new round of prosperity cycle. Additionally, it is intriguing to note that when compared horizontally with peers, TSUGAMI CHINA's performance in this new round of industry prosperity cycle is clearly superior to that of other leading machine tool enterprises. Taking the most intuitive financial data for comparison, TSUGAMI CHINA has repeatedly set historical records for several core financial indicators in recent years, with the company's profit margin being at an industry-leading level. In the 2025 fiscal year, TSUGAMI CHINA's comprehensive gross profit margin reached 33.1%, significantly higher than the average gross profit margin level of 15%-25% among leading A-share machine tool companies. Even more impressive is the company's net profit margin, which reached 18.4%, far exceeding most domestic and even global machine tool manufacturers, undoubtedly making it one of the "most profitable" companies in the machine tool industry. Running out a growth "acceleration" during the industry prosperity cycle and further widening the gap with peers may be attributed to TSUGAMI CHINA's continuous efforts in cost reduction, efficiency enhancement, and operational optimization. To stimulate the company's innovative vitality and better respond to intense market competition, TSUGAMI CHINA has initiated an improvement proposal activity for all employees since 2018. At the recent 2025 annual first half improvement proposal commendation conference, the company awarded outstanding individuals and groups with diamond awards, gold awards, silver awards, bronze awards, the most improvement proposal award, and the best improvement project award. Through various measures, the company has effectively stimulated internal momentum, achieving continuous progress in cost reduction, efficiency enhancement, strengthening risk resistance capabilities, and long-term growth. In addition to strong internal growth momentum, there are also external positive factors at play. In the profit warning announcement, the company mentioned that the rapid development of hot industries such as humanoid robots and artificial intelligence has increased the demand for the company's high-end CNC machine tools The author believes that this also indicates that the company's future growth sustainability and resilience are likely to continue to exceed expectations. In fact, secondary market investors have also given positive and timely "feedback" on this, as TSUGAMI CHINA's stock price has surged ahead of other A and H-share machine tool companies this year. Considering that the performance for the first half of the 2026 fiscal year has already set new records, it is expected that TSUGAMI CHINA's full-year performance will also have a high probability of reaching new highs, making the company's performance and stock price very promising