Dongwu Securities: Recommends a Buy rating for Tongli Co., Ltd.

Zhujie Yu, Yishen Shen, Huiyong Yu, Alang Wu, and Zhexiao Chen of Dongwu Securities Co., Ltd. recently conducted research on Tongli Co., Ltd. and published the research report “2025 Performance Express Briefing: Benefiting from the Green and Intelligent Transformation of Mining Equipment with Structural Increment, Full-Year Performance Steadily Up 8% Year-on-Year,” giving Tongli Co., Ltd. a “Buy” rating.

Tongli Co., Ltd. (920599)

Investment Highlights

The full-year 2025 performance is expected to grow steadily by 8% year-on-year, with Q4 2025 performance increasing by 51% quarter-on-quarter. The company released its 2025 performance express report, achieving operating revenue of 6.597 billion yuan, up 7.37%; total profit of 987 million yuan, up 7.93%; net profit attributable to shareholders of listed companies of 858 million yuan, up 8.19%; and net profit after deducting non-recurring gains and losses of 849 million yuan, up 9.36%. In Q4 2025 alone, the company achieved operating revenue of 1.802 billion yuan, with a quarter-on-quarter increase of +2.20% and a year-on-year increase of +10.77%; net profit attributable to shareholders of listed companies was 323 million yuan, with a quarter-on-quarter decrease of -3.14% but a year-on-year increase of +50.77%.

Reasons for performance growth: The implementation of four major strategies—new energy, intelligence, large-scale, and internationalization—has led to leading growth in non-recurring net profit. 1) Product structure upgrade: Under the “dual carbon” policy and green mining requirements, the company’s new energy products have become the core engine of revenue growth, driven by high demand, high unit price, and high gross profit, boosting overall profitability. Additionally, the company continuously launches or upgrades large-scale products to meet the efficient mining needs of large mines. 2) Market layout optimization: domestically, demand for open-pit coal mines remains stable, while demand for non-ferrous metal mining has significantly increased; overseas markets are the company’s future strategic focus, with ongoing strengthening of channel construction and service capabilities. 3) Large-scale autonomous driving: Through multi-mode strategic cooperation with leading autonomous driving technology companies, the company’s autonomous driving vehicle models are experiencing rapid growth. 4) Cost reduction and efficiency improvement: Measures such as optimizing process design, strict expense budgeting, and personnel adjustments have achieved cost savings and efficiency gains, with scale effects gradually emerging.

The company’s first-mover advantage in the non-road wide-body dump truck segment remains leading, with new energy and intelligence opening long-term growth space. 1) First-mover advantage: The company pioneered the design standards for non-road wide-body dump trucks and is among the first domestically to develop and produce such vehicles. After over 20 years of development, it leads domestically in process management, key component manufacturing, complete vehicle assembly, and testing, capable of flexible production of multiple variants in small batches and large quantities. 2) Growth in new energy vehicle sales: As one of the earliest companies to develop new energy products, accumulated technology and improved product quality have led to market-leading sales in recent years. The company’s pure electric, methanol range-extender, CNG, and LNG power products are performing well and are expected to unlock medium- and long-term growth potential. 3) Large-scale application of autonomous driving: Guided by national policies promoting intelligent mines, autonomous driving products are now fully capable of large-scale commercialization, with high downstream customer interest and some initial procurement, which could become a significant market demand driver in the future.

Profit forecast and investment rating: Considering the company’s status as a new entrant in overseas markets, facing challenges such as building sales and service channels and dispersed overseas markets, overseas progress has fallen short of expectations. We have lowered the company’s net profit attributable to shareholders for 2025-2027 to 858 million, 969 million, and 1.116 billion yuan (previously 955 million, 1.098 billion, and 1.227 billion yuan), corresponding to forward P/E ratios of 11x, 10x, and 9x. As the penetration of new energy products and autonomous driving increases, domestic demand for non-ferrous metals grows, and overseas markets gradually show results, the company’s performance is expected to grow steadily. We maintain a “Buy” rating.

Risk warnings: 1) International trade risks; 2) Macroeconomic fluctuations; 3) Intensified market competition.

The above content is compiled by Securities Star based on publicly available information, generated by AI algorithms (Wangxin Suanbei 310104345710301240019), and does not constitute investment advice.