CISI FIN released a research report stating that IMPRO PRECISION (01286) is among the global top 10 manufacturers of high-precision, high-complexity, and high-performance castings and machined components. The company has a global production capacity layout with its Mexico factory gradually ramping up production. With high overseas revenue proportion, tariffs are smoothly passed through to US customers. Growing demand from downstream sectors such as high-horsepower engines and robotics enhances the company's performance potential, while the company continues to reward shareholders with dividends.
The firm forecasts the company's net profit attributable to shareholders for 2025-2027 to be HK$721 million, HK$828 million, and HK$931 million respectively, representing year-on-year growth of +11.9%, +14.9%, and +12.4%. Based on the closing price as of September 12, 2025, the corresponding PE ratios are 9.8x, 8.5x, and 7.6x respectively. The firm initiates coverage with a "BUY" rating and recommends investor attention.
**High-Precision Component Supplier**
IMPRO PRECISION was established in Wuxi, China in 1998, with headquarters relocated to Hong Kong in 2011. The company provides various investment castings, sand castings, precision machined parts, and surface treatment services. It is now among the global top 10 manufacturers of high-precision, high-complexity, and high-performance castings and machined components, capable of providing comprehensive one-stop solutions including "R&D + mold design and manufacturing + casting + heat treatment + secondary machining + surface treatment services."
**Global Capacity Layout with Mexico Factory Gradually Ramping Up**
As of the end of 2024, the company operates 21 factories across China, Turkey, Germany, Czech Republic, and Mexico. The Mexico factory serves North American orders in proximity, benefiting from USMCA (United States-Mexico-Canada Agreement) tariff preferences for exports to the US and Canada. The gradual capacity ramp-up drives long-term performance growth for the company.
**High Overseas Revenue Proportion with Smooth Tariff Pass-through to US Customers**
As of the end of 2024, the company's products reach over 1,000 customers across more than 30 countries and regions globally, providing long-term component supply to renowned global enterprises including Bosch Group, Caterpillar, Cummins, Honeywell, Husco, and Parker Hannifin. In H1 2025, the company's revenue by region shows Americas accounting for 47.3% (including 40.8% from the US), Europe 29.9%, and Asia 22.8% (including 20.7% from China).
The company's products feature small batch sizes, diverse varieties (over 9,500 active part numbers as of the end of 2024), and excellent quality, maintaining long-term partnerships with customers. The cost proportion of its components in customers' finished products is generally low, and some parts have few alternative suppliers, resulting in strong pricing power. Under US tariff disruptions, the company smoothly passes through major tariffs on US exports to American customers.
**AIDC and Robotics Industry Chain Target with Long-term Growth Potential**
The company's products serve multiple industries including high-horsepower engines, construction machinery, agricultural machinery, recreational marine vessels, passenger vehicles, commercial vehicles, aviation, energy, and healthcare. Overall demand remains stable with upward trend, with high-horsepower engines and robotics segments showing high growth momentum and higher profit margins.
AIDC drives demand for high-horsepower engines, with the company providing sand casting cylinder blocks for high-horsepower engines to Caterpillar, Cummins, and others. In H1 2025, related business revenue increased 48.3% year-on-year to RMB 530 million, accounting for 21.8% of total revenue. Additionally, the company has entered the Da Vinci surgical robot supply chain and is in discussions with overseas humanoid robot companies for collaboration, enhancing long-term growth potential.
**Risk Factors:** Demand falling short of expectations, intensified market competition, overseas political and policy volatility risks, Mexico factory ramp-up below expectations, company operational risks, etc.