DTECH (01377) surged more than 8% in morning trading, last up 8.19% at HK$346.2 with turnover reaching HK$22.6503 million.

The company recently disclosed its 2026 interim results, with China Merchants Securities highlighting that DTECH achieved revenue of RMB 1.943 billion in 2026H1, representing a year-on-year increase of 114.85%. Net profit attributable to shareholders reached RMB 679 million, up 325.12% year-on-year, while deducted non-recurring net profit climbed 353.28% to RMB 670 million.

On the operational front, the company recorded a gross margin of 57.85% in 2026Q2, up 17.55 percentage points year-on-year and 4.60 percentage points quarter-on-quarter. Net margin reached 37.02%, expanding 18.98 percentage points year-on-year and 5.06 percentage points sequentially, driven by sustained volume growth in high-value-added products such as micro-diameter drill needles, high aspect ratio drill needles, and premium coated drill needles.

According to the brokerage, DTECH's R&D investment in 2026H1 totaled RMB 89 million, marking a 54.6% year-on-year increase. The company has achieved mass production of drill needles with aspect ratios exceeding 40 times and successfully broken through the design and manufacturing processes for ultra-high aspect ratio drill needles beyond 60 times diameter. Additionally, diamond composite coated drill needles suitable for M9+ ceramic mixed-material processing have entered small-batch application stage.

The research house believes supply shortage for drill needles continues to intensify, with extremely few players in the high-end segment. Looking ahead to Q3, the volume and price growth driven by Rubin is expected to accelerate, with the firm remaining optimistic about sustained high growth in the company's second-half performance.