The Zhitong Finance App learned that Tiangong International (00826) released a research report saying that Tiangong International (00826) is expected to generate revenue of 5.77 billion, 6.92 billion yuan/7.99 billion yuan respectively, and the predicted net profit to mother is 600 million/820 million/1.02 billion yuan respectively, giving a target price of HK$389, corresponding 15 times PE in 2026. There is room for 52.4% increase compared to the current price, maintaining a “buy” rating.
First, the main views of Shanghai are as follows:
Profit continued to grow in double digits, and gross margin increased significantly
In the first half of 2026, the Group achieved revenue of 2,471 billion yuan, up 5.5% year on year; gross profit increased 38.2% year on year to 613 million yuan, gross margin increased 5.9 percentage points year on year to 24.8% year on year; and net profit to mother increased 11.2% year on year to 226 million yuan. Raw material costs are smoothly transmitted downstream, compounded by the release of high-value-added products, and the improvement of main business profits.
Tool and tool steel's net price ability continues to be realized, and hard alloy emissions contribute to growth
In the first half of 2026, the revenue of mold steel and high speed steel increased by 1.0% and 20.8%, respectively, to reach 1,166 million yuan and 476 million yuan; gross margin increased to 17.5% and 25.7%, respectively, with a year-on-year increase of 3.7 and 10.1 percentage points. Among them, mold steel increased profits by optimizing the domestic product structure, while high-speed steel benefited from tungsten price transmission and a recovery in overseas demand, and export revenue increased by 48.9% year-on-year. The cutting tools business grew at the same time, with revenue up 42.3% year on year to 565 million yuan, and gross margin rising to 34.4%; among them, the sales scale of hard alloy tools increased 221% year on year to 176 million yuan, becoming an important growth point for domestic replacement of high-end products.
Titanium alloy orders are pressurized in stages, and PCB tools are arranged
In the first half of 2026, titanium alloy revenue fell 35.1% year on year to 226 million yuan, and gross margin fell 11.7 percentage points year on year to 12.5%, mainly affected by delays in the production of new consumer electronics products. In terms of growth layout, in July of this year, the company launched a project to expand production of special bars with an annual output of 300 tons of ultra-fine grain PCB tools, and plans to finally achieve annual production and sales of 300 million drills and 100 million cutters through a joint venture.
Powder metallurgy application verification continues to break through, and the industrialization of high-end materials progresses steadily
The company continues to promote the extension of powder metallurgy technology to high-end applications: 1) In terms of integrated die-casting, the relevant core components passed production tests by many leading domestic die-casting companies in the first half of the year; 2) in terms of nuclear fusion, 304B7 powder metallurgy high boron steel completed specific tests and sent samples to the French ITER organization for further verification.