DTECH (01377) saw its share price jump more than 8% before midday on Tuesday, with the stock climbing 8.38% to trade at HK$346.80 at the time of reporting, and recording a turnover of HK$22.71 million.
The company recently published its interim report for the first half of 2026, and CMSC highlighted that DTECH achieved revenue of RMB 1.943 billion in 1H26, representing a year-on-year increase of 114.85%. Net profit attributable to shareholders reached RMB 679 million, up 325.12% year-on-year, while deducted non-recurring net profit stood at RMB 670 million, surging 353.28% from the prior-year period.
On the operational front, the company posted a gross margin of 57.85% in Q2 2026, which was 17.55 percentage points higher than the same period last year and 4.60 percentage points above the previous quarter. Net margin for the quarter was 37.02%, up 18.98 percentage points year-on-year and 5.06 percentage points quarter-on-quarter, driven primarily by the continued ramp-up in sales of high value-added products, including fine-diameter drill bits, high aspect ratio drill bits, and premium coated drill bits.
The brokerage further noted that according to the interim report, the company invested RMB 89 million in research and development during 1H26, a 54.6% year-on-year increase. DTECH has now achieved mass production of drill bits with aspect ratios exceeding 40 times, and has successfully broken through the design and manufacturing processes for ultra-high aspect ratio drill bits above 60 times. Moreover, diamond composite coated drill bits designed for processing M9+ ceramic composite materials have entered the small-batch application stage.
The institution believes that the supply shortage of drill bits is intensifying, with very few players participating in the high-end segment. Looking ahead to Q3, the anticipated simultaneous increase in both volume and pricing of drill bits, catalyzed by the Rubin platform, is expected to accelerate, and the firm remains optimistic about the company's continued high growth trajectory in the second half of the year.