TSUGAMI CHINA (01651) rose nearly 8% in morning trading. By the time of writing, the stock was up 7.11% to HKD 61, with a turnover of HKD 67.29 million.

The increase follows the recent announcement of the annual results for the period ending March by its controlling shareholder, Japan's Tsugami Corporation. The company's China division reported revenue of 111.039 billion yen, a year-on-year increase of 22.7%. Division profit reached 31.155 billion yen, marking a significant 39.2% rise compared to the previous year.

Analysts point out that machine tools, as general-purpose equipment, have a wide range of downstream applications. Since the beginning of the year, strong capital expenditure in areas such as AI computing-driven liquid cold plates, AI server construction, as well as semiconductor and new energy vehicle components has driven a sustained recovery in machine tool demand. According to data from the National Bureau of Statistics, metal-cutting machine tool output in March 2026 increased by 4.70% year-on-year.

Furthermore, the continuous improvement in domestic manufacturing demand provides support for the robust demand outlook for these industrial "mother machines."