Tsugami China (01651) breaks record again under high base, industry prosperity and internal dynamic resonance solidifies growth logic.

Machine tool industry, known as the cornerstone of industrial modernization, has benefited in recent years from the continuous increase in demand for precision processing in downstream new energy, humanoid Siasun Robot & Automation, and even AI computing power and other emerging fields, and it is constantly ushering in new certainty of growth dividends. By observing the performance of leading companies, it is enough to accurately grasp the industry's prospects. Take TSUGAMI CHINA (01651), which just released its 2026 annual report, for example, the company's series of record-breaking financial data is a vivid footnote to the high prosperity of China's CNC machine tool industry and the resonance of the company's endogenous growth momentum. According to TSUGAMI CHINA's financial report, the company achieved revenue of 5.184 billion yuan in the 2026 fiscal year, a year-on-year increase of 21.6%; net profit attributable to shareholders was 1.094 billion yuan, a strong increase of 39.9%, both revenue and profit set new historical records. In particular, the profit growth rate significantly outpaced the revenue growth rate, reflecting the company's continuous release of profit elasticity through multiple measures such as optimizing operational efficiency and strengthening cost control; in addition, TSUGAMI CHINA's net profit margin of as high as 21.1% is also a leading presence in the industry. While delivering its best performance to date, TSUGAMI CHINA has also continued its tradition of generous dividends, announcing a final dividend of 0.9 Hong Kong dollars per share, in addition to an interim dividend of 0.6 Hong Kong dollars per share, bringing the total dividend for the year to 1.5 Hong Kong dollars per share, highlighting its dividend attribute. Currently, given the high visibility of TSUGAMI CHINA's growth and high growth elasticity, the certainty of sustained high dividend payout will only get stronger. With the two major advantages of high growth and high dividend, the foundation for TSUGAMI CHINA's bullish trend in stock price is expected to continue to be solidified. Accelerated growth in the second half of the fiscal year Looking at TSUGAMI CHINA's latest financial report, GMTEight believes that the company's performance reaching new historic highs in the 2026 fiscal year is not surprising, but what is beyond expectations is that on the basis of its stellar performance in the first half of the fiscal year, TSUGAMI CHINA's performance accelerated across the board in the second half of the fiscal year. Data shows that in the second half of 2026, TSUGAMI CHINA's revenue was 2.687 billion yuan, an increase of 17.6% in the same period, and an increase of 7.6% compared to the first half of the fiscal year when it set a new historical high. During the same period, net profit attributable to shareholders increased by 33.9% and 17.9% quarter-on-quarter and year-on-year, respectively, with a net profit margin further increasing to approximately 22.0%, significantly higher than the 20.1% in the first half of the year. The whole second half of the year contributed approximately 54% of the annual profit, showing a clear accelerating trend in profit release, further confirming the company's growth resilience in breaking through on a high base. In terms of product breakdown, the breakthrough in TSUGAMI CHINA's overall performance in the 2026 fiscal year is directly related to its comprehensive upward trend in all of its businesses. As the company's core product and "ballast", precision lathes achieved revenue of 4.331 billion yuan for the year, an increase of 19.5% year-on-year, accounting for 83.5% of total revenue. Precision machining centers grew by 58.3% to 386 million yuan, the most outstanding business performance for TSUGAMI CHINA during the reporting period. Revenue from precision grinders was 227 million yuan, an increase of 8.9%, with a relatively moderate growth rate; other businesses including precision thread rolling machines, parts sales, and after-sales services totaled 241 million yuan, an increase of 30.1% year-on-year. From a geographical perspective, the domestic market is the core engine driving TSUGAMI CHINA's accelerated growth. Data shows that the company's domestic sales reached 4.82 billion yuan during the period, a year-on-year increase of 27.2%, setting a new historical record. In the second half of the fiscal year, the business climate of multiple downstream industries in the domestic market exceeded expectations, directly driving an increase of 5% in TSUGAMI CHINA's revenue from the domestic market in the second half of the fiscal year. Specifically, the 3C industry benefited from the recovery of demand for mobile phones and communication terminals, with a significant increase in orders in the second half of the fiscal year; intensive investment in AI computing power and semiconductor infrastructure drove the demand for related precision components, with the proportion of revenue from this segment in the domestic market reaching a historical high of 50% for TSUGAMI CHINA; at the same time, traditional areas of advantage such as pneumatic and hydraulic systems also maintained steady growth. The continuous breakthrough on the profit side is also worth noting. The overall gross profit margin of the company in the 2026 fiscal year increased to 34.9%, an increase of 1.8 percentage points year-on-year; the net profit margin reached 21.1%, an increase of 2.7 percentage points year-on-year, both sets of data setting new historical highs. From these several sets of data, it is not difficult to see that in the second half of the fiscal year, with the accelerated influx of orders from high value-added fields such as AI computing power, humanoid Siasun Robot & Automation, TSUGAMI CHINA's optimized product structure further facilitated the upward breakthrough of the company's profitability, and with the combined effects of multiple forces, the company's growth potential has been significantly strengthened. Seizing multi-dimensional industry opportunities and nurturing new growth drivers Looking ahead from the current perspective, the high prosperity cycle of China's CNC machine tool industry is far from over. Public data shows that in the first two months of this year, the domestic production of CNC metal cutting machine tools increased by 45.9% year-on-year, continuing the high growth momentum since the third quarter of 2025. The demand for high-precision and high-efficiency CNC machine tools in downstream new energy, humanoid Siasun Robot & Automation, AI computing power, and other emerging fields is still being continuously released, and the trend of the industry's upward cycle is expected to continue. In the midst of this historic opportunity, TSUGAMI CHINA's strategic layout around AI computing power and other new fields is entering a period of realization, opening up a new round of growth space for the company. From an industry perspective, AI computing power is undoubtedly the most imaginative prosperous direction at present. The rapid development of AI computing power has led to an unprecedented expansion in the demand for small precision components manufacturing, and TSUGAMI CHINA, with its long-standing expertise in small precision machine tools, is fully capable of meeting the increasing demand downstream. It is reported that TSUGAMI CHINA's equipment has achieved full coverage in the processing of precision components from core optical devices such as the light emission module (TOSA) and light receiving module (ROSA) in AI optical modules, to computing tray liquid cooling modules and base structural components. Leveraging its high-precision machining capabilities and cost-effectiveness advantages, TSUGAMI CHINA is expected to continue expanding its market share in the field of precision component machining for AI computing power, with the proportion of income from other industries led by AI computing power expected to further increase. With a sufficient confidence in the industry's prospects, TSUGAMI CHINA will also significantly increase its capital expenditure to 200 million yuan in the 2027 fiscal year, setting a new historical high, with the investment mainly used for equipment updates and new factory construction. According to the company, the Pinghu new factory has completed land leveling, wall construction, and factory design operations, and officially started construction earlier this month. According to the plan, TSUGAMI CHINA will build 2 new factories, with a total investment of approximately 150 million yuan, and the new project is expected to start production in January 2028. The author believes that the recent intensive capacity expansion actions not only confirm the management's firm confidence in the long-term prospects of the Chinese CNC machine tool market, but also provide capacity guarantees for TSUGAMI CHINA to continue to achieve outstanding results in the future. Expanding from traditional areas of strength to emerging fields such as AI computing power, it can be seen that as TSUGAMI CHINA's multi-dimensional growth potential is gradually realized, the visibility of its growth and elasticity has also greatly increased. As a responsible manufacturing enterprise, with an increasingly solid fundamental value, TSUGAMI CHINA has also strengthened its shareholder returns accordingly. As mentioned at the beginning, the company's dividend per share for the 2026 fiscal year will reach 1.5 Hong Kong dollars; moreover, the company's cumulative repurchase amount during the period reached 253 million yuan, far exceeding the previous year's approximately 62 million yuan. With high certainty of growth prospects and continuous increase in shareholder returns, TSUGAMI CHINA, as a premium blue-chip stock in the Hong Kong stock market benefiting from this round of AI development, is expected to attract more widespread attention from investors in the future.