From the high growth interim report, look at TSUGAMI CHINA (01651): High profitability, high dividends returning to shareholders.

China This year, in the first three quarters, the performance of manufacturing companies has mostly been disappointing. Although the manufacturing industry is still waiting for a recovery in prosperity, the lackluster recovery is still a common "pain point", but in the face of this ever-changing market environment, some "top students" in Chinese manufacturing companies have already sent signals of business recovery. On November 13, TSUGAMI CHINA (01651) disclosed its financial report for the first half of the 2025 fiscal year. The financial report shows that in the period from April to September of this year, Tsugami China achieved a revenue of 1.978 billion yuan, a year-on-year increase of 32.4%; during the same period, the company's net profit was 340 million yuan, an even higher increase of 53.7%. While revenue and profit surged, Tsugami China's profitability also saw a breakthrough: during the period, the company's gross profit margin and net profit margin increased by 4.4 and 2.4 percentage points respectively to 32.1% and 17.2%, both of these indicators reaching historical highs for Tsugami China. Achieving comprehensive and high-quality growth in performance, what is even more commendable is that Tsugami China also announced in this financial report the distribution of a mid-term dividend of 0.45 Hong Kong dollars per share, the highest semi-annual dividend plan since the company went public. This shows that Tsugami China is not only committed to enhancing its market competitiveness and expanding market share, but also highly values creating value for shareholders and enhancing shareholder returns through its own growth. Historical high profitability The solid fundamental strength and outstanding growth potential of Tsugami China are evident in the company's latest half-year report. Specifically, on the revenue side, Tsugami China's various products contributed to increased revenue in the first half of the fiscal year compared to the same period last year. Among them, the largest revenue contributor was precision lathes, with revenue of 1.717 billion yuan, an increase of 36.1% year-on-year, and an increase in revenue share to 86.8% by 2.4 percentage points. During the same period, revenue from precision machining centers and precision grinding machines were 80.429 million yuan and 85.608 million yuan, respectively, an increase of 8.7% and 5.4% year-on-year, with corresponding revenue shares of 4.1% and 4.3%. In addition, revenue from other products (including precision thread rolling machines, component sales, and after-sales services) contributed 94.631 million yuan in revenue, an increase of 21.6% year-on-year, accounting for approximately 4.8% of total revenue. If the revenue is further segmented by region, Tsugami China's revenue from the domestic market in the reporting period was 1.68 billion yuan, an increase of 34.9% year-on-year, and a 21.8% increase compared to the second half of last year, accounting for 85% of total revenue. During the same period, the company's overseas sales were 290 million yuan, an increase of 19.4% year-on-year and 21.3% compared to the previous period. The growth rate in the domestic market is superior to that in the overseas market, which may be related to the increased demand for the company's machine tools from downstream industries, especially the automotive and general mechanical processing industries, during the reporting period. According to data provided by the company, revenue from the domestic automotive industry in the first half of the fiscal year reached 680 million yuan, an increase of 43.4% year-on-year and 12.5% compared to the previous period; revenue from the 3C industry was 150 million yuan, with year-on-year and period-on-period growth rates of 18.8% and 27.2%; revenue from the pneumatic and hydraulic industry was also 150 million yuan, with year-on-year and period-on-period growth rates of 17.9% and 27.8%. In addition, customers from other industries outside the above-mentioned industries contributed 700 million yuan in revenue, an increase of 29.6% year-on-year and 27.2% compared to the previous period. While expanding revenue scale in an orderly manner, Tsugami China has also made significant progress in lowering costs and enhancing profitability by improving operational quality. As mentioned at the beginning, the company's gross profit margin and net profit margin in the first half of the fiscal year reached 32.1% and 17.2%, respectively, both historical highs. Considering Tsugami's deep brand heritage and outstanding product competitiveness, the company has strong bargaining power in the supply chain; combined with Tsugami China's focus on operational optimization and cost control, such as promoting activities involving all employees in proposing improvements in recent years, it can be expected that the company's profitability will continue to have room for further growth in the future. Orderly business expansion, enhanced shareholder returns In his book "Built to Last," American management expert Jim Collins wrote: "Vision is a prerequisite for a successful company; innovation is the core of a company's long-lasting success," and this statement applied to Tsugami China seems perfectly fitting. As a manufacturing company with a strong spirit of innovation, Tsugami China actively optimizes and upgrades its products through technological means. A recent example of this is the introduction of two new products, the precision turret lathe model M08JL5L- and the precision automatic lathe model B0327W, to meet the strong demand in downstream industries such as the automotive industry and the medical industry, as well as the highly anticipated core components of humanoid Siasun Robot&Automation. For the processing of certain special parts, new machine models have been introduced to better adapt to market demand changes and enhance product competitiveness. At the same time as firmly developing new styles, Tsugami China is also strategically expanding production with a long-term vision to consolidate and strengthen the company's economies of scale. Recently, the renovation and expansion of Tsugami China's fifth plant in Pinghu has been successfully completed and officially put into operation last month. It is reported that this plant is positioned as a turret lathe assembly workshop, with an expected annual production capacity of about 3000-4000 units. In addition, Tsugami China has made positive progress in expanding its sales team and strengthening market penetration by its distributor team. As of the end of the reporting period, Tsugami China has increased the total number of distributors by 6% to 439, and the total number of customers served by the company has exceeded 9000 for the first time, reaching 9291, with a year-on-year increase of 9%. It is through the joint efforts of Tsugami China and its distributors across the country that the company has significantly strengthened its connection with end customers, thereby gaining a more solid position and a higher level of competitiveness in the market. During the industry adjustment period, Tsugami China, with its far-sighted vision and strong execution in expanding production on an "anti-cyclical" basis, has gained strategic initiative, which is one of Tsugami China's core competitive strengths. In the future, the company will continue to uphold its spirit of innovation, efficiently execute various strategic initiatives, and continuously consolidate and expand its leading position in the global manufacturing market, providing shareholders with more stable and sustainable returns.China's vision, as well as effective measures such as product innovation and talent team building, have successfully injected a continuous stream of new momentum into Tianjin China's sustainable development. These positive measures have also been constantly confirmed in the company's rising financial reports.As a Hong Kong-listed company, Jinsu China actively increases shareholder returns and enhances investors' sense of achievement during the process of continuous improvement in operations. According to the company's interim report, Jinsu China will distribute a mid-term dividend of HK$0.45 per share at the beginning of next year, which is also the highest semi-annual dividend amount since Jinsu China's listing. With the bedding industry entering a new growth period, Jinsu China, as the industry's "top student," is expected to continue to achieve performance beyond the industry's average growth rate. In the process of gradually realizing performance growth expectations, Jinsu China, which has a tradition of high dividends, is expected to provide investors with more generous investment returns. In short, whether from the perspective of corporate growth potential or dividends, Jinsu China can be considered a highly valuable investment target in the Hong Kong stock market, and the company's long-term investment value should not be underestimated.