CICC: Maintain HAITIAN INT'L outperform industry rating, target price HKD 29.5

According to the Zhitong Finance APP, CICC has released a research report stating that it maintains the profit forecast for HAITIAN INT'L (01882) at RMB 3.64 billion / 4.067 billion for 2025/2026, with the current stock price corresponding to a P/E of 8.8x / 7.8x for 2025/2026. The target price remains at HKD 29.5 with an outperform rating, corresponding to a P/E of 11.8x / 10.5x for 2025/2026, indicating a 35% upside potential from the current stock price. The company announced its 1H25 performance, with revenue of RMB 9.018 billion, a year-on-year increase of 12.5%; net profit attributable to the parent company was RMB 1.712 billion, a year-on-year increase of 12.6%. Against the backdrop of a high base in the domestic market in 2024, the company still achieved double-digit growth in the first half of 2025, driven significantly by overseas demand; the performance in 1H25 was generally in line with the bank's expectations.

CICC's main points are as follows:

1H25 overseas market demand contributed to the main growth, with overseas revenue increasing by 34.7% year-on-year

By region, the company's domestic and overseas sales in 1H25 were RMB 5.20 billion / 3.82 billion, representing year-on-year growth of 0.3% / 34.7%, which the bank believes is mainly due to: 1) a high base in the domestic market, coupled with a structural slowdown in domestic demand, keeping sales stable year-on-year. 2) The company continues to expand overseas, benefiting from the structural adjustment of the global supply chain, with significant year-on-year sales growth in Southeast Asia and other countries and regions.

Growth of Mars and Jupiter series driven by overseas consumer goods and domestic demand in the new energy vehicle and home appliance industries

In 1H25, the company's sales of injection molding machines increased by 12.1% year-on-year to RMB 8.637 billion, and sales of parts and services increased by 21.0% year-on-year to RMB 381 million; among them, by product series, the sales revenue of Mars/Jupiter/electric series in 1H25 was RMB 5.855 billion / 1.672 billion / 1.072 billion, representing year-on-year growth of 13.2% / 14.7% / 5.3%.

Robust profitability and improved operational efficiency

1. In 1H25, the company's gross margin was 32.8%, an increase of 0.5 percentage points year-on-year, mainly due to relatively low raw material prices; the net profit margin was 19.0%, unchanged from last year. 2) In 1H25, the company's net cash flow from operating activities was RMB 1.402 billion, with a net inflow increase of RMB 197 million year-on-year, indicating an improvement in the company's working capital management capabilities.

Global layout strategy is expected to continue to bring growth flexibility

The company continues to deepen its investment in overseas production capacity and market development. Since 2025, the company has held open house events at its global factories, with the South China headquarters open week from April 15-18 attracting over 3,000 customers, partners, and investors from more than 20 countries; in 1H25, overseas revenue accounted for 42.3%, a year-on-year increase of 6.9 percentage points. The bank expects that with the completion of the second-phase factories in Serbia and India, the proportion of overseas revenue may further increase in 2025.

Risk Warning: Injection molding machine market demand may be lower than expected, and there is a risk of rising raw material prices