Tztek (688003) — Comment on 9M2025 Results
Near-Term Earnings Pressure; New Businesses Gaining Traction
Key Data Snapshot
| Metric | Value |
|---|---|
| Ticker | 688003.SH |
| Rating | Overweight (maintain) |
| Report date | November 4, 2025 |
| Closing price | RMB 51.55 |
| 52-week low / high | RMB 36.68 / 69.96 |
| P/B | 5.36x |
| Free-float market cap | RMB 10.017 billion |
| Total market cap | RMB 10.017 billion |
| Book value per share (LF) | RMB 9.61 |
| Debt-to-assets (LF) | 51.38% |
| Total shares | 194.32 million |
| Free-float A-shares | 194.32 million |
Earnings Forecast & Valuation
| Metric | 2023A | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|---|
| Revenue (RMB mn) | 1,648 | 1,609 | 1,698 | 2,196 | 2,706 |
| YoY (%) | 3.70 | -2.38 | 5.55 | 29.31 | 23.23 |
| Net profit to parent (RMB mn) | 215.17 | 124.69 | 101.06 | 268.70 | 383.40 |
| YoY (%) | 41.46 | -42.05 | -18.95 | 165.89 | 42.69 |
| EPS — fully diluted (RMB) | 1.11 | 0.64 | 0.52 | 1.38 | 1.97 |
| P/E | 48.91 | 84.40 | 104.14 | 39.17 | 27.45 |
Investment Thesis
I. Revenue up; small losses continue near term
2025 Q1–Q3:
- Revenue: RMB 977 million, +14.8% YoY
- Net profit to parent: -RMB 15 million; loss slightly wider YoY
2025 Q3:
- Revenue: RMB 380 million, +22.6% YoY, +0.48% QoQ
- Net profit to parent: -RMB 1 million; loss vs. profit YoY/QoQ
Drivers of losses:
- Gross margin down on revenue mix
- Strong order growth → hiring and opex up
II. Margin pressure from mix
2025 Q1–Q3:
- Gross margin 35.6%, -3.8 ppt YoY
- Net margin -1.6%, broadly flat YoY
- Period expense ratio 39.6%, -3.2 ppt YoY
2025 Q3:
- Gross margin 36.9%, -3.5 ppt YoY, -0.5 ppt QoQ
- Net margin -0.25%, -4.3 ppt YoY, +5.1 ppt QoQ
Why gross margin fell:
- Lower share of high-margin vision inspection
- Higher share of process equipment
- Lower margin on PV wafer inspection / sorting
III. New orders +42% YoY in Q1–Q3; OCF positive
Orders & working capital:
- Contract liabilities RMB 366 million at Q3 end, +9.5% YoY
- Inventory RMB 1.29 billion, +14.5% YoY
- Q1–Q3 new orders RMB 1.917 billion, +41.97% YoY
Platform strategy: AI AOI, PCB, semiconductors, embodied AI — multiple new lines progressing.
Cash flow:
- Q1–Q3 operating cash flow RMB 31 million, positive YoY vs. prior period
IV. Consumer electronics, PCB, semiconductor, ADAS, robotics
1. Consumer electronics
- Core vision metrology / inspection base intact
- Sample development with key customers for foldables & AI-related structures
- 1H25: RMB 56 mn first-batch order for smart-energy inspection from a top domestic customer
2. PCB
- PCB equipment since 2019: LDI, AOI, CO₂ laser drilling, etc.
- 1H25 segment revenue +50%+ YoY; LDI customer coverage widening
3. Semiconductors
- Investee Suzhou Sixing: TB1500 bright-field tool at 40 nm — first domestic vendor with formal customer orders
- TB2000 (14–28 nm) in qualification at multiple leading customers
4. Intelligent driving
- Deep ties with NVIDIA & Horizon Robotics
- Solutions on Horizon J5/J6 and NVIDIA Jetson for smart network, unmanned logistics, low-altitude AI stacks
- 1H25: expanded passenger & commercial OEM programs; leading share in heavy-truck ADAS
5. Robotics
- Subsidiary Tianzhun Xingzhi: high-performance embodied-AI controller for humanoids (late 2024)
- 1H25 orders from several brands, including RMB 14 mn from one flagship customer
Financial Summary
| Metric | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|
| Gross margin (%) | 41.17 | 39.28 | 43.22 | 44.20 |
| Net margin to parent (%) | 7.75 | 5.95 | 12.24 | 14.17 |
| Revenue growth (%) | -2.38 | 5.55 | 29.31 | 23.23 |
| NP growth to parent (%) | -42.05 | -18.95 | 165.89 | 42.69 |
| ROIC (%) | 5.58 | 4.22 | 9.29 | 12.47 |
| ROE diluted (%) | 6.46 | 5.12 | 13.21 | 18.07 |
| Debt-to-assets (%) | 46.48 | 49.40 | 51.73 | 53.03 |
Risks
- Customer capex below expectations
- New businesses ramp slower than expected
Source: Soochow Securities Research
