Since 2024, the wave of stock repurchases in the Hong Kong market has continued to rise, with both the number of repurchase cases and the total amount reaching historical highs for the same period. According to Wind data, as of November 25, 264 listed companies in Hong Kong have conducted repurchases this year, with a total of 8.98 billion shares repurchased and a total amount of approximately 236 billion HKD, a significant increase compared to the 102.198 billion HKD repurchased by 187 companies in the same period of 2023.

Among them, Tencent undoubtedly becomes the 'repurchase king.' As of now, Tencent's repurchase amount has exceeded 90 billion HKD this year. In addition to large-cap companies, some small and medium-sized enterprises have also performed brilliantly in repurchases, such as TIANGONG INT'L (00826), a leading company in the special steel industry.

According to Zhituo Finance APP, as of now, TIANGONG INT'L has accumulated 51 repurchase events in 2024, with a total of 50 million shares repurchased, marking its largest annual repurchase effort since its listing in 2007.

Not only that, on the evening of December 11, TIANGONG INT'L announced that it will repurchase some shares of TIANGONG Tools held by certain investors. After the completion of the subsequent repurchase, TIANGONG INT'L's holding in TIANGONG Tools will increase from 82.35% to 89%. On December 12, TIANGONG INT'L announced again, indicating that aside from the proposed repurchasing investors, external investors and employee stock ownership platforms such as CICC Jiatai, Jinshi New Materials Fund, and Danyang Tianyi will continue to hold shares, with a total holding ratio of 11%.

This indicates that most external investors remain bullish on the future development prospects of TIANGONG Tools. According to industry practices, investors who generally choose to exit usually include those who have funds maturing or are clearing non-core investments.

According to public information, TIANGONG Tools is an indirect non-wholly owned subsidiary of TIANGONG INT'L, mainly engaged in the manufacturing and sales of mold steel and high-speed steel, which are the two most significant businesses for TIANGONG INT'L's revenue. This repurchase of TIANGONG Tools' shares not only demonstrates TIANGONG INT'L's financial strength but also enhances the shareholder net income indicators, thus better rewarding small and medium investors, manifesting TIANGONG INT'L's confidence and bullish outlook for its future development.

In 2025, domestic and international market demand is expected to resonate upward.

In the past two years, various industries have faced varying degrees of impact from a combination of factors such as macroeconomic downturns and geopolitical tensions. TIANGONG INT'L has inevitably been affected as well.

However, during this process, TIANGONG INT'L has demonstrated strong business resilience. Its dual-driven strategy of domestic and international development has enhanced its risk resistance capabilities. The year 2025 may mark the beginning of TIANGONG INT'L entering an upward cycle, as the phase of resonating domestic and international demand may be approaching.

In the domestic market, to boost the economy, several significant economic policies have been released this year, including "Promoting Large-Scale Equipment Renewal and Consumer Goods Trade-In Action Plan," which has driven growth in demand for autos, home appliances, home decoration, and other consumer goods, thereby stimulating market demand for the entire range of TIANGONG INT'L products.

As we enter 2025, the domestic market demand is expected to further strengthen. The economic work conference from December 11 to 12 again released a series of Bullish Signals, defining next year's fiscal and monetary policies as "more proactive" and "moderately loose" respectively. The moderately loose monetary policy is the first to re-emerge since 2011, indicating that the stimulus efforts next year will be further intensified, and market demand is expected to stabilize and improve.

In the foreign market, although the current international situation is complex and changeable, going abroad has become an important choice for Chinese companies to expand new growth curves and has become an obvious trend. A new wave of overseas expansion by Chinese enterprises is in full swing, with Emerging Markets becoming a hotspot. TIANGONG INT'L is a leading enterprise that was the first to internationalize in the special steel industry and has already achieved significant results, with revenue from overseas markets reaching 47.3% in the first half of 2024. Currently, the USA has begun a rate-cutting cycle, which may stimulate a rebound in overseas market demand, allowing TIANGONG INT'L to accelerate its expansion efforts in overseas markets and push internationalization to new heights.

The mass breakthrough of high-end products propels the company’s development into the fast lane.

As domestic and international demand may resonate upward, the accelerated advancement of TIANGONG INT'L's high-end products will make its performance more resilient to growth. Those familiar with TIANGONG INT'L's development history will find that the high-end product development is a critical strategy to establish its core competitive barriers, and this strategy has achieved significant results, with various business lines of TIANGONG INT'L now having multiple high-end products in reserve.

In the mold steel product line, TIANGONG INT'L has officially launched the 7,000-ton rapid forging project, breaking the reliance on imported super-large specification mold steel in China. At the same time, TIANGONG INT'L has established contacts with several auto manufacturers, laying the groundwork for subsequent material research and market expansion.

In the field of powder metallurgy, TIANGONG INT'L continues to transform towards high-end powder metallurgy products in the first half of 2024, vigorously promoting applications of powder high-speed steel tools such as powder taps and powder drill bits to achieve import substitution.

In the cutting tool sector, TIANGONG INT'L has a complete and specialized product matrix, and the double-spiral hole bar developed by the company has passed preliminary verification by customers, showing good performance, and has entered the mass production and supply stage.

In terms of titanium alloys, the successful production of the EB furnace at TIANGONG INT'L not only enriches its process routes for high-quality titanium and titanium alloys but also elevates the quality control and product value, laying a solid foundation for TIANGONG INT'L to capture the high-end titanium and titanium alloy market.

Moreover, in the second half of 2024, TIANGONG INT'L's new technologies and products have achieved a new breakthrough in mass production. According to TIANGONG INT'L's public account, a new product and technology appraisal meeting was recently held, where the appraised products included high-hardness nickel-integrated die casting mold materials, new high-strength and high-toughness injection mold materials, high-wear and high-corrosion resistance nitrogen-containing plastic mold materials, high-throw performance electric furnace pre-hardened plastic mold materials, high-wear and corrosion-resistant powders for high-end cutting tool steel, and high-hardness and high-strength powder high-speed steel for composite saw blades, totaling six items.

After a comprehensive evaluation, the appraisal committee unanimously believes that the six new technologies and products mentioned above are all original innovations in China, and the performance of the new products can reach an advanced level in the industry. Ultimately, all six new products and technologies passed the appraisal successfully.

This not only showcases TIANGONG INT'L's outstanding capabilities in the field of new materials research and application but also injects new momentum into promoting the technological upgrade and localization of the mold steel industry. It can be anticipated that, with its industry-leading manufacturing capabilities, the six new technologies and products are expected to accelerate market introduction. As the range of high-end product categories continues to enrich, TIANGONG INT'L's market competitiveness is continuously improving, while its profitability level will significantly outperform peers.

It is worth noting that the price increases of several products will also help TIANGONG INT'L enhance its profit levels. The Zhito Finance APP has observed that after many products had their prices raised in the first half of the year, TIANGONG INT'L has successively announced on its public account that prices for its high-speed steel, mold steel, and hard alloy products will continue to rise in the second half of the year.

The price increase strategy not only indicates that TIANGONG INT'L's downstream market demand is gradually recovering, but also that TIANGONG INT'L has the ability to pass the increasing cost pressure to the downstream, which reflects the company's competitiveness and signifies its strong market position and bargaining power.

Summary

Based on the above analysis, it is highly certain that TIANGONG INT'L is about to enter an upward cycle. With the resonance of domestic and foreign demand rising and the ongoing promotion of the high-end product strategy, TIANGONG INT'L may accelerate the release of profit elasticity in the future, thus achieving continuous growth.

From the perspective of the secondary market, TIANGONG INT'L's current PB valuation is only 0.72 times, and its Market Cap is far below the company's Net Assets, indicating that its true value has been significantly underestimated by the market. In the strong contrast between the high certainty of a fundamental upturn and the true value being significantly undervalued, it is easy to understand that TIANGONG INT'L has repurchased 50 million shares 51 times this year, which may also give investors who have long-term positions in TIANGONG INT'L more confidence.