Equity Research: High-Tech (688556.SH)

Core Business Recovery Accelerates; Humanoid Robotics & Aerospace Applications Forge New Growth Engines

Date: March 30, 2026
Rating: BUY
Current Price: CNY 13.45
Target Price: Implied Upside >15% (Based on 2026-2028 Earnings Trajectory)
Analyst: Yao Yao (S1130512080001)
Sector: New Energy & Power Equipment / Advanced Manufacturing

Executive Summary

On March 30, 2026, High-Tech (hereinafter referred to as "the Company" or "High-Tech") released its full-year 2025 annual report. The results mark a pivotal inflection point in the Company’s operational trajectory. While the top-line revenue of CNY 3.65 billion represented an 18.43% year-over-year (YoY) decline, and net profit attributable to shareholders stood at a loss of CNY 41 million (an 8.24% YoY narrowing of losses compared to the prior year's deeper deficit), the sequential trends reveal a robust recovery momentum. Notably, the fourth quarter of 2025 demonstrated significant improvement, with quarterly revenue reaching CNY 1.219 billion (+24.46% quarter-over-quarter, QoQ) and turning profitable with a net profit of CNY 41 million (+500% QoQ). This sequential profitability enhancement aligns with market expectations and signals that the Company has successfully navigated the trough of the industry cycle.

The core investment thesis for High-Tech is undergoing a structural evolution from a pure-play photovoltaic (PV) equipment and consumables provider to a diversified advanced manufacturing platform with high-growth exposure to humanoid robotics and aerospace applications.

1. Core PV Business Stabilization: The Company’s traditional diamond wire and slicing services business is entering a phase of simultaneous volume and margin recovery. In 2025, High-Tech sold approximately 67 million kilometers of diamond wire (including self-use), with tungsten-based diamond wires accounting for 86.57% (approx. 58 million km). The aggressive expansion of cold-drawn tungsten mother wire capacity has widened the technological lead in fine-wire processing. Furthermore, the slicing OEM business produced ~60GW, ranking among the top five industry players, with utilization rates significantly outperforming industry averages.
2. Aerospace & Space Photovoltaics Catalyst: The Company is capitalizing on the emerging demand for ultra-thin silicon wafers driven by space-based solar power initiatives. High-Tech has mastered cutting technology for wafers below $50\mu m$ and has begun sample deliveries for $60-80\mu m$ wafers. This positions the Company uniquely in high-barrier, high-value aerospace scenarios, moving beyond terrestrial PV constraints.
3. Humanoid Robotics Breakthrough: High-Tech has successfully penetrated the supply chain for humanoid robots. Its composite metal tendons, characterized by low creep, small bending radius, and super wear resistance, have secured initial orders (CNY 200k in 2025) and entered trial phases with leading clients. Additionally, the Company has developed prototype internal and external thread grinders for planetary roller screw drives and established a dedicated reducer R&D team, rapidly advancing from component supplier to critical subsystem provider.

We maintain our "BUY" rating. We forecast net profits of CNY 162 million, CNY 445 million, and CNY 764 million for 2026, 2027, and 2028, respectively. The current valuation multiples (P/E of 69x/25x/15x for 2026-2028E) appear attractive given the projected earnings compound annual growth rate (CAGR) and the optionality provided by the robotics and aerospace segments.

Key Takeaways

1. Financial Performance: Turning the Corner from Loss to Profit

The 2025 fiscal year was a transition period for High-Tech, characterized by revenue contraction but profound operational optimization. The broader PV industry faced severe overcapacity and price wars, which pressured revenues across the board. However, High-Tech’s ability to limit losses and achieve profitability in Q4 2025 demonstrates superior cost control and product mix optimization.

• Revenue Dynamics: Full-year 2025 revenue declined 18.43% YoY to CNY 3.65 billion. This contraction was largely anticipated due to the downward adjustment in global PV capex and wafer pricing. However, the Q4 rebound (+24.46% QoQ) suggests that order books are stabilizing and that the Company is gaining market share as weaker competitors exit the market.
• Profitability Inflection: The swing from a full-year net loss of CNY 41 million to a Q4 net profit of CNY 41 million is a critical signal. The 500% QoQ increase in Q4 profit indicates that fixed costs are being better absorbed by higher utilization rates, and the premium pricing for tungsten wires and specialized slicing services is beginning to offset commodity price deflation.
• Cash Flow & Balance Sheet Health: Operating cash flow remained negative in 2025 (CNY -328 million), primarily due to working capital adjustments and inventory management during the downturn. However, the balance sheet remains robust with total assets of CNY 7.59 billion and a manageable debt structure. The company’s ability to generate positive operating cash flow is projected to return in 2026 (forecasted CNY 51 million), supporting future R&D and capex without excessive dilution.

Source: Company Annual Reports, Guojin Securities Institute Estimates

The forecast implies a dramatic margin expansion. Gross margins are expected to recover from 14.4% in 2025 to nearly 30% by 2028. This recovery is driven by two factors: the stabilization of raw material costs (tungsten wire) and the higher value-add of new businesses (robotics components and aerospace wafers) which carry significantly higher margins than standard PV slicing services.

2. Core Business Analysis: Diamond Wire & Slicing Services

The Company’s foundational business remains the production of diamond cutting wires and the provision of silicon wafer slicing services. Despite the cyclical downturn, High-Tech has strengthened its competitive moat through technological leadership in tungsten-based wires.

A. Tungsten Wire Dominance and Capacity Expansion

The shift from high-carbon steel wires to tungsten wires has been the most significant technological trend in PV slicing over the past three years. Tungsten wires offer higher tensile strength, allowing for thinner diameters (fine-line capability), which reduces silicon consumption (kerf loss) and increases the number of wafers per ingot.

• Volume & Mix: In 2025, High-Tech achieved a total diamond wire sales volume of ~67 million kilometers. Of this, 58 million kilometers were tungsten-based, representing a staggering 86.57% mix. This high penetration rate underscores the Company’s successful transition and customer acceptance of its premium products.
• Technological Moat: The Company has rapidly expanded its capacity for cold-drawn tungsten mother wires. Cold drawing is a critical process that determines the uniformity and strength of the wire. By controlling this upstream process, High-Tech has created a "technical generation gap" against competitors who rely on purchased mother wires or less efficient production methods. This vertical integration allows for better cost control and faster iteration of finer wire diameters (e.g., moving from $30\mu m$ to $28\mu m$ and below).
• Competitive Advantage: As the industry pushes for thinner wafers to reduce costs, the demand for high-quality tungsten wires becomes inelastic. Competitors struggling with yield issues in tungsten wire production will find it difficult to match High-Tech’s consistency. This positions the Company to capture disproportionate market share as the industry consolidates.

B. Slicing OEM Services: Scale and Efficiency

High-Tech’s slicing service business operates on an "Equipment + Consumables + Process" integrated model. This closed-loop advantage ensures that the slicing parameters are perfectly optimized for their own wires and machines, resulting in higher yields and lower breakage rates for customers.

• Market Position: In 2025, the Company’s slicing output reached ~60GW, securing a position in the top five globally. The market penetration rate for its slicing services rose to 8.82%.
• Utilization Rates: A key differentiator in a down-cycle is utilization. While many independent slicers operated at sub-50% capacity due to lack of orders, High-Tech reported utilization rates "significantly better than the industry average." This is attributed to long-term contracts with major tier-1 wafer manufacturers who prioritize yield stability over marginal price differences.
• Profitability Trend: Since Q3 2025, the profitability of the slicing segment has improved sequentially. This is driven by:
  1. Higher efficiency in new factory ramps.
  2. Reduced depreciation pressure as older assets are fully depreciated.
  3. Premium pricing for slicing complex cell types (such as BC and HJT compatible wafers).

The integration of equipment and consumables creates a sticky customer relationship. Clients relying on High-Tech’s slicing services are also locked into using High-Tech’s diamond wires, creating a recurring revenue stream that is resilient to short-term price fluctuations.

3. New Growth Engine I: Aerospace & Space Photovoltaics

The second pillar of High-Tech’s growth strategy leverages its core competency in ultra-thin wafer cutting for the emerging space economy. Space-based solar power (SBSP) and satellite constellations require photovoltaic modules that are lightweight, flexible, and highly efficient. This necessitates silicon wafers that are significantly thinner than those used in terrestrial applications.

A. Technological Leadership in Ultra-Thin Wafers

Terrestrial PV wafers typically range from $130\mu m$ to $150\mu m$. In contrast, space applications demand wafers in the $50\mu m - 80\mu m$ range. Cutting such thin wafers without breakage requires exceptional wire tension control, slurry formulation, and machine precision.

• Capability Milestone: High-Tech has officially announced that it possesses the capability to cut silicon wafers below $50\mu m$.
• Commercialization Status:
  • The Company has achieved small-batch delivery capability for $60-80\mu m$ wafers.
  • It has taken the industry lead in launching $50\mu m$ ultra-thin wafers, which are currently in the sample testing phase with downstream clients.
• Strategic Partnerships: The Company is actively collaborating with upstream and downstream enterprises to accelerate the industrial application of $80\mu m$ and $60\mu m$ wafers. This includes joint development of rectangular and half-cut wafer formats optimized for space module assembly.

B. Market Potential and Value Proposition

The "Space Photovoltaic" sector is transitioning from niche military/satellite use to broader commercial constellations (e.g., low-earth orbit internet satellites).

• High Barrier to Entry: The yield rate for $50\mu m$ wafers is extremely sensitive to process parameters. Few companies possess the know-how to mass-produce these wafers at commercially viable yields. High-Tech’s experience in fine-line tungsten wire cutting directly translates to this capability.
• High Value-Add: Space-grade wafers command a significant premium over standard wafers. While terrestrial wafer prices have collapsed to near-cash-cost levels, space-grade wafers maintain healthy margins due to the specialized nature of the product and the criticality of weight savings in launch economics.
• Future Application: Beyond pure power generation, these ultra-thin wafers can be integrated into flexible substrates for wearable electronics or unmanned aerial vehicles (UAVs), expanding the total addressable market (TAM) beyond just satellites.

This segment transforms High-Tech from a cyclical PV supplier into a strategic partner for the aerospace industry, diversifying its revenue base and reducing correlation with terrestrial PV cycles.

4. New Growth Engine II: Humanoid Robotics

The third and potentially most transformative growth driver is the Company’s entry into the humanoid robot supply chain. Leveraging its expertise in precision metal processing and grinding, High-Tech has identified two critical components: Composite Metal Tendons and Planetary Roller Screw Grinders/Reducers.

A. Composite Metal Tendons for Dexterous Hands

Humanoid robots require "dexterous hands" capable of fine motor skills. Traditional rigid actuators are being replaced by tendon-driven systems that mimic human muscles and tendons. These tendons must be strong, flexible, and durable.

• Product Specifications: High-Tech’s composite metal tendons feature:
  • Low Creep: Maintains tension over time, ensuring consistent grip strength.
  • Small Bending Radius: Allows for compact joint designs.
  • Super Wear Resistance: Critical for longevity in high-cycle operations.
• Customer Validation: The product has received "high recognition" from clients. In 2025, the Company secured breakthrough orders worth CNY 200,000. While the monetary value is currently small, the strategic significance is immense. These orders represent entry into the supply chains of head-tier humanoid robot manufacturers.
• Trial Phase: The products are currently in the trial use phase with leading clients. Successful trials typically lead to design-in wins, where the component becomes part of the standard bill of materials (BOM) for mass production. Given the anticipated ramp-up of humanoid robot production in 2027-2028, this early mover advantage is crucial.

B. Planetary Roller Screw (PRS) Grinding Equipment

The linear actuators in humanoid robots (particularly for legs and arms) increasingly utilize Planetary Roller Screws due to their high load capacity and compact size. However, PRS are difficult to manufacture, requiring precise grinding of internal and external threads.

• R&D Progress: High-Tech began laying out PRS grinding equipment capabilities at the start of 2025. Within the year, the R&D progressed smoothly.
• Prototype Launch: The Company has successfully developed and launched prototypes for:
  • Internal Thread Grinders
  • External Thread Grinders
• Strategic Implication: Currently, the global supply of high-precision PRS grinding machines is dominated by a few European and Japanese firms. By developing domestic alternatives, High-Tech addresses a critical bottleneck in the Chinese robotics supply chain. This not only opens a new equipment sales channel but also strengthens the Company’s relationship with robot makers who need secure supply lines.

C. Reducer Development

In addition to screws, reducers (gearboxes) are essential for torque multiplication.

• Team Building: High-Tech has assembled a dedicated R&D team for reducers.
• Sample Delivery: The Company has rapidly produced samples of reducers specifically designed for humanoid robots.
• Customization: The development is being conducted in close coordination with client progress, indicating a "joint development" model rather than a purely off-the-shelf approach. This deepens customer stickiness.

The robotics segment represents a classic "second curve" growth story. Starting from low-volume, high-margin niche components (tendons), expanding into critical manufacturing equipment (grinders), and then into core subsystems (reducers), High-Tech is systematically embedding itself into the robotics value chain.

Operational & Strategic Deep Dive

Supply Chain Vertical Integration

High-Tech’s strategy relies heavily on vertical integration. In the diamond wire business, this means producing the tungsten mother wire, coating it with diamond grit, and then using it in their own slicing machines. In the robotics business, this involves designing the grinding machines that produce the screws, and potentially producing the screws themselves in the future.

Benefits of Integration:
1. Cost Leadership: By controlling upstream materials (tungsten), the Company insulates itself from raw material price volatility.
2. Speed to Market: Internal feedback loops between wire production and slicing service allow for rapid optimization of new wire specifications. Similarly, feedback from robot clients informs the design of the grinding machines.
3. Quality Control: End-to-end control ensures that quality standards are met at every stage, which is critical for high-reliability applications like aerospace and robotics.

R&D Investment Profile

Despite the financial pressure in 2024-2025, High-Tech has maintained a disciplined R&D spend.

• 2025 R&D Expense: CNY 189 million (5.2% of revenue).
• Focus Areas:
  • Fine-line tungsten wire technology.
  • Ultra-thin wafer cutting processes.
  • Precision grinding algorithms for robotics.
  • New material science for composite tendons.

The R&D intensity is expected to remain stable at around 5% of revenue in the forecast period. This level of investment is sufficient to maintain technological leadership while allowing operating leverage to drive margin expansion as revenue grows.

Capacity Utilization and Capex

The Company’s capital expenditure (Capex) has been prudent. In 2025, Capex was CNY 84 million, significantly lower than previous years. This reflects a shift from aggressive expansion to optimizing existing assets.

• 2026E Capex: Forecasted to rise to CNY 286 million. This increase is likely allocated to:
  1. Scaling up tungsten mother wire capacity to meet growing demand.
  2. Pilot lines for robotics component manufacturing.
  3. Specialized equipment for aerospace wafer production.

The moderate Capex profile supports free cash flow generation, which is crucial for funding new ventures without excessive debt or equity issuance.

Valuation and Financial Forecasts

Earnings Forecast Methodology

Our forecasts for 2026-2028 are based on the following assumptions:

1. Revenue Growth:

   • 2026 (14.01% Growth): Driven by the recovery in PV capex and the initial contribution from robotics orders. We assume a modest recovery in global PV installations and a continued gain in market share for tungsten wires.
   • 2027 (27.91% Growth): Accelerated by the mass adoption of humanoid robots (assuming pilot programs scale to small-scale production) and increased adoption of space PV wafers.
   • 2028 (21.89% Growth): Sustained growth as robotics become a significant revenue contributor and the aerospace segment matures.

2. Margin Expansion:

   • Gross Margin: Expected to improve from 14.4% (2025) to 19.5% (2026), 25.1% (2027), and 29.5% (2028). This assumes:
     • Stabilization of PV wire pricing.
     • Higher mix of high-margin tungsten wires.
     • Contribution from high-margin robotics and aerospace products.
   • Operating Expenses: SG&A and R&D expenses are projected to grow slower than revenue, leading to operating leverage. Management expenses are forecasted to remain around 7.5% of revenue, indicating strict cost control.

3. Tax Rate: We assume an effective tax rate of 20% in 2026, normalizing to 12% in 2027-2028, reflecting potential high-tech enterprise incentives and R&D super-deductions.

Valuation Metrics

Note: P/E calculated based on current price of CNY 13.45.

Interpretation:
* 2026 P/E of 69x: Appears high on a standalone basis but is typical for a company emerging from a loss-making trough with high expected growth. The market is pricing in the turnaround.
* 2027 P/E of 25x: Becomes more reasonable as earnings visibility improves. This multiple is in line with high-growth advanced manufacturing peers.
* 2028 P/E of 14.6x: Attractive valuation for a company with a diversified portfolio in robotics and aerospace. If the robotics narrative gains traction, the market may re-rate the stock to a higher multiple (e.g., 30-40x), offering significant upside.

Peer Comparison:
While direct peers in the diamond wire space trade at lower multiples due to cyclicality, High-Tech’s valuation should command a premium due to its:
1. Leading position in tungsten wire (higher barrier).
2. Exposure to humanoid robotics (higher growth multiple).
3. Aerospace applications (higher margin potential).

Companies in the robotics supply chain often trade at P/E ratios of 30-50x during growth phases. As High-Tech’s robotics revenue becomes material, its valuation framework will likely shift from a PV-equipment multiple to a robotics/automation multiple.

Risks / Headwinds

Investors should be aware of the following risks that could impact the Company’s performance and valuation:

1. Technology Progression Risks

• Robotics Commercialization Delay: The humanoid robot industry is still in its infancy. If mass production is delayed beyond 2027-2028, the expected revenue contribution from tendons, grinders, and reducers will not materialize as forecasted.
• Aerospace Adoption Rate: The space PV market is dependent on government policies and private sector investment in satellite constellations. Any slowdown in space infrastructure spending could delay the uptake of ultra-thin wafers.
• Technical Failure: If the Company’s composite tendons or grinding machines fail to meet the rigorous reliability standards of top-tier robot manufacturers, it could lose its "first-mover" advantage to competitors.

2. PV Industry Cyclical Risks

• Silicon Wafer Price Decline: Although the Company sells services and consumables, a prolonged collapse in wafer prices could force customers to cut costs further, pressuring the pricing power of diamond wires and slicing services.
• Overcapacity Persistence: If the PV industry’s overcapacity situation persists longer than expected, utilization rates in the slicing business could drop, leading to higher unit fixed costs and margin compression.
• Technology Disruption: While tungsten wire is currently dominant, any disruptive cutting technology (e.g., laser cutting improvements) that bypasses the need for diamond wires would pose an existential threat to the core business. However, this is considered a low-probability, long-term risk.

3. Financial and Operational Risks

• Raw Material Volatility: Tungsten prices can be volatile. While the Company has some hedging capabilities, sharp increases in tungsten costs could squeeze margins if they cannot pass them on to customers.
• Working Capital Pressure: As the Company expands into new businesses, inventory and receivables may increase. If collection periods lengthen or inventory turns slow down, cash flow could remain constrained, limiting flexibility.
• Execution Risk: Managing three distinct business lines (PV, Aerospace, Robotics) requires significant management bandwidth. Execution missteps in any area could distract from core operations.

4. Market Sentiment Risks

• Valuation Compression: If the broader market shifts away from growth stocks or if the "robotics theme" loses investor interest, the multiple expansion expected in 2027-2028 may not occur, limiting stock price appreciation despite earnings growth.

Rating / Sector Outlook

Sector Outlook: Advanced Manufacturing & Robotics

The broader sector of advanced manufacturing is undergoing a structural shift. Traditional industrial automation is maturing, while humanoid robotics represents the next frontier. Governments worldwide are prioritizing supply chain security and technological sovereignty, benefiting domestic leaders in precision manufacturing.

• PV Sector: The PV sector is expected to bottom out in 2025-2026. Consolidation will weed out inefficient players, leaving survivors like High-Tech with stronger market positions. The focus is shifting from pure capacity expansion to technological differentiation (e.g., tungsten wires, thin wafers).
• Robotics Sector: The humanoid robot industry is poised for exponential growth post-2026. Early suppliers who secure design wins now will enjoy long-term recurring revenue streams. The supply chain for precision components (screws, reducers, sensors) is fragmented, offering opportunities for specialized manufacturers to consolidate share.
• Aerospace Sector: The commercialization of space is accelerating. Demand for lightweight, high-efficiency power solutions is structurally growing. Companies that can bridge the gap between terrestrial manufacturing scale and aerospace quality standards are rare and valuable.

Investment Rating: BUY

We maintain a BUY rating on High-Tech.

• Short-Term (6-12 months): The stock is driven by the earnings turnaround in the core PV business. The Q4 2025 profit signal confirms the bottom, providing a safe margin of safety.
• Medium-Term (1-3 years): The stock is driven by the validation of the robotics and aerospace narratives. Successful mass supply of tendons and grinders will trigger a re-rating of the valuation multiple.
• Long-Term (3+ years): The Company evolves into a platform technology provider for precision manufacturing, with diversified revenue streams that reduce cyclicality.

Target Price Implication:
Based on a 2027 EPS estimate of CNY 0.535 and applying a target P/E of 30x (reflecting a blend of manufacturing and robotics multiples), the implied target price is CNY 16.05. This represents an upside of approximately 19% from the current price of CNY 13.45, excluding potential dividend yields. If the robotics segment accelerates, a higher multiple (35-40x) could push the target price towards CNY 18-21.

Investment View

High-Tech presents a compelling investment opportunity for institutional investors seeking exposure to the intersection of cyclical recovery and secular growth themes.

1. The "Turnaround" Play:
The core PV business has passed the worst of the downturn. The sequential improvement in Q4 2025 provides tangible evidence that the Company can maintain profitability even in a challenging environment. For value-oriented investors, this offers a degree of downside protection. The market has largely priced in the losses of 2024-2025; the focus is now on the recovery trajectory.

2. The "Optionality" Play:
The investments in humanoid robotics and aerospace are not merely speculative; they are backed by tangible progress (orders, prototypes, samples).
* Robotics: The CNY 200k order for tendons is a "proof of concept." The real value lies in the potential for these components to be scaled across millions of robot units. The development of grinding machines also positions High-Tech as an enabler of the entire domestic robotics supply chain, not just a participant.
* Aerospace: The ability to cut $50\mu m$ wafers is a demonstrable technical moat. As space launches become cheaper and more frequent, the demand for such specialized components will grow non-linearly.

3. Strategic Clarity:
Management has demonstrated a clear strategy: leverage core competencies in precision processing (wire drawing, grinding, cutting) to expand into adjacent high-value markets. This "adjacency strategy" minimizes execution risk compared to entering entirely unrelated fields. The synergy between PV wire technology and robotics tendon production (both involve fine metal processing) is a key insight that validates the Company’s diversification.

4. Valuation Appeal:
At current levels, the market is effectively giving away the robotics and aerospace options for free, valuing the Company primarily on its distressed PV earnings. As these new businesses contribute to the bottom line in 2027-2028, the earnings base will expand, and the multiple will likely expand concurrently. This "double expansion" potential (earnings growth + multiple expansion) is the hallmark of a high-conviction buy recommendation.

Conclusion:
High-Tech is no longer just a diamond wire company. It is transforming into a precision manufacturing platform with footholds in three high-growth industries: Photovoltaics, Aerospace, and Humanoid Robotics. The 2025 annual report confirms the stabilization of the core business and the successful incubation of new growth engines. We recommend investors accumulate positions to benefit from the impending earnings recovery and the long-term structural growth of the robotics sector.

Appendix: Detailed Financial Analysis

Income Statement Analysis

The income statement reveals the mechanics of the margin recovery.

• Cost of Goods Sold (COGS): In 2025, COGS was CNY 3,126 million, representing 85.6% of revenue. This high ratio reflects the low utilization and price pressure. By 2028, we forecast COGS to drop to 70.5% of revenue. This 15 percentage point improvement is the primary driver of profit growth. It comes from:
  • Fixed cost absorption (higher volume).
  • Product mix shift (more tungsten wire, less steel wire).
  • Higher pricing power in niche segments (robotics/aerospace).
• Operating Expenses:
  • Sales Expenses: Stable at ~2% of revenue. Indicates that the Company does not need to spend heavily on marketing to sell its products; demand is driven by technical specifications and long-term relationships.
  • Administrative Expenses: Declining from 9.3% in 2024 to 7.5% in 2025, and forecasted to stay at 7.5%. This shows effective overhead management.
  • R&D Expenses: Decreasing slightly as a % of revenue (from 6.3% in 2023 to 5.0% in 2028E) as revenue grows faster than R&D spend. This indicates operating leverage in innovation.

Balance Sheet Strength

• Asset Structure: The Company has a high proportion of current assets (79.5% in 2023, stabilizing around 70-77% in forecasts). This liquidity provides flexibility.
• Inventory: Inventory levels increased in 2025 to CNY 1,037 million. Investors should monitor inventory turnover days. If inventory grows faster than sales, it could signal demand weakness. However, given the Q4 revenue jump, this inventory is likely positioned for Q1 2026 sales.
• Debt: Short-term borrowings increased to CNY 166 million in 2025, but long-term debt remains manageable. The net debt-to-equity ratio is low (1.51% in 2025), indicating a conservative capital structure. This allows the Company to borrow if needed for aggressive expansion in robotics without jeopardizing financial stability.

Cash Flow Dynamics

• Operating Cash Flow (OCF): The negative OCF in 2024-2025 is a concern but is typical for companies building inventory and facing delayed receivables in a downturn. The forecasted return to positive OCF in 2026 (CNY 51 million) and strong growth in 2027-2028 (CNY 341m / CNY 847m) validates the quality of earnings.
• Investing Cash Flow: Capex is controlled. The Company is not engaging in reckless expansion.
• Financing Cash Flow: The Company has relied on some debt financing but has not diluted shareholders significantly recently. This is shareholder-friendly.

Final Remarks

High-Tech stands at a crossroads. The past two years have been about survival and consolidation in the PV sector. The next three years will be about expansion and diversification into robotics and aerospace. The 2025 Annual Report provides the first clear evidence that this transition is succeeding.

For institutional investors, the key takeaway is that the downside risk is limited by the recovering core business, while the upside potential is significant due to the optionality in humanoid robotics. The Company’s technical prowess in precision manufacturing is the common thread that ties these diverse opportunities together, making it a unique and compelling investment case in the Chinese advanced manufacturing landscape.

We reiterate our BUY rating with a positive outlook for the 2026-2028 period.

Disclaimer: This report is based on information available as of March 30, 2026. It is intended for institutional investors only. Past performance is not indicative of future results. Please refer to the full disclaimer in the original source document for legal and regulatory disclosures.