TSUGAMI CHINA (01651.HK) saw its share price surge over 7% during early trading today. As of the latest report, the stock was trading 6.99% higher at HK$58.95, with a transaction value of HK$32.27 million.

The company recently disclosed the financial results of its controlling shareholder, Japan's TSUGAMI, for the three months ending June 30, 2026. Revenue reached 38.013 billion yen, marking a 41.4% year-on-year increase, while segment profit rose 50.1% year-on-year to 11.553 billion yen.

Citi has issued a research report initiating coverage on TSUGAMI CHINA with a "Buy" rating and a target price of HK$72. The brokerage expects the company to benefit from strong capital expenditure growth in the electronics and AI liquid cooling industries, which together account for approximately 40% of new orders, surpassing the automotive sector's contribution of less than 30%.

The report also notes that humanoid robots could become the next significant growth driver, despite currently contributing only about 2% of orders. Furthermore, the possibility of the stock being included in the Stock Connect program could serve as a positive short-term catalyst.