CICC released a research report maintaining its profit forecasts for HAITIAN INT'L (01882) at 3.64 billion yuan and 4.067 billion yuan for 2025/2026 respectively. The current stock price corresponds to 8.8x/7.8x P/E for 2025/2026. The firm maintains its target price of HK$29.5 and outperform rating, corresponding to 11.8x/10.5x P/E for 2025/2026, representing 35% upside potential from the current stock price.

The company announced its 1H25 results with revenue of 9.018 billion yuan, up 12.5% year-on-year, and net profit attributable to shareholders of 1.712 billion yuan, up 12.6% year-on-year. Despite the high base effect from 2024, the company still achieved double-digit growth in the first half of 2025, with overseas demand providing significant momentum. The 1H25 performance was largely in line with CICC's expectations.

CICC's main viewpoints are as follows:

**Overseas markets contributed primary growth in 1H25, with overseas revenue up 34.7% year-on-year**

By region, the company's domestic and overseas sales in 1H25 were 5.20 billion yuan and 3.82 billion yuan respectively, representing year-on-year changes of +0.3% and +34.7%. CICC attributes this to: 1) High base effect in the domestic market, combined with structural slowdown in domestic demand, resulting in stable year-on-year sales. 2) The company's continued overseas expansion, benefiting from structural adjustments in global industrial chains, with significant year-on-year growth in sales to Southeast Asia and other countries and regions.

**Overseas consumer goods demand and domestic new energy vehicle and home appliance industry demand drove growth in Mars and Jupiter series**

In 1H25, the company's injection molding machine sales increased 12.1% year-on-year to 8.637 billion yuan, while parts and services sales grew 21.0% year-on-year to 381 million yuan. By product series, Mars/Jupiter/Electric series achieved sales revenue of 5.855 billion yuan, 1.672 billion yuan, and 1.072 billion yuan respectively in 1H25, representing year-on-year growth of 13.2%, 14.7%, and 5.3% respectively.

**Stable profitability with improved operational efficiency**

1) The company's gross margin in 1H25 was 32.8%, up 0.5 percentage points year-on-year, mainly due to relatively lower raw material prices. Net margin was 19.0%, flat compared to the previous year. 2) Net cash flow from operating activities in 1H25 was 1.402 billion yuan, with net inflow increasing by 197 million yuan year-on-year, showing improved working capital management capabilities.

**Global expansion strategy expected to continue providing growth flexibility**

The company continues to deepen overseas capacity investment and market development. Since 2025, the company has held open house events at factories globally. The South China headquarters open week from April 15-18 attracted over 3,000 customers, partners, and investors from more than 20 countries. Overseas revenue accounted for 42.3% of total revenue in 1H25, up 6.9 percentage points year-on-year. CICC expects that with the completion of the Serbia and India Phase II factories in 2025, the company's overseas revenue proportion may further increase.

**Risk warnings:** Injection molding machine market demand below expectations, raw material price inflation risks.