Green harmonics: leading domestic harmonic reducer, fixed increase to expand scale effect
Green Harmonics is the leading domestic harmonic speed reducer. The founding team began researching harmonic transmission technology in 2003. The product performance has reached the international advanced level, and its market share is second in the world and number one in domestic production. The performance of products based on the “P” tooth profile theory has reached the international advanced level; the performance of the self-developed next-generation third-harmonic technology reducer has been significantly improved, and it can be applied to high-end CNC machine tools and semiconductor manufacturing. The company's R&D expense ratio is significantly higher than that of most companies in the same industry. Green's harmonic net interest rate remains at 30%-40%, which is far higher than that of companies in the same industry, leading in profitability. The company continues to expand production capacity, reaching 1.95 million units in 2027. Costs are expected to be further reduced, and market share is expected to increase further.
Speed reducer: import dependence is high, domestic replacement logic is clear
In 2025, the global robot harmonic reducer market is expected to reach 4.89 billion yuan, and the Chinese market size will reach 3 billion yuan; from 2020 to 2025, the compound annual growth rate of the global market size will be 18.4%, and the Chinese market will be 23.8%. The global market, Hammernac accounts for about 80% of the market, forming a monopoly pattern; in 2021, the domestic market, Hammernac, accounted for 35.5% of the market, down 1.5 pct from the previous year, and green harmonics accounted for 24.7%, up 3.7 pct from the previous year. Overall, the localization rate of the domestic market is less than 60%, and there is still room for domestic substitution. Industrial robots and CNC machine tools are the application fields of speed reducers, and China is the largest market in the world. At the same time, the profit of manufacturing units in China corresponds to the continuous increase in the installed volume of industrial robots, and the development of CNC machine tools to four-axis and five-axis machine tools. The company relies on harmonic speed reducers to lay out mechatronic products and CNC turntables. The recovery in the downstream market will drive a further increase in demand for speed reducers.
On the eve of mass production of humanoid robots, demand for harmonic reducers is expected to experience strong growth.
Currently, the degree of freedom of humanoid robots released by various companies is between 18-50, up to tens of times that of industrial robots, and the demand for speed reducers has increased dramatically. The development of artificial intelligence in recent years has catalyzed a significant increase in intelligent generalization capabilities, achieving a low-level shift from “mechanical automation” to “intelligence”. The production cost of a single humanoid robot has been reduced from millions of dollars in the past to tens of thousands of US dollars. According to Tesla's estimate, the cost of a single unit can be reduced by less than 20,000 US dollars after mass production, which is expected to usher in an “iPhone moment” for commercial mass production, driving an increase in demand for speed reducers.
Profit forecast and valuation: In 2022-2023, the downstream CNC machine tool and robot industry of harmonic reducers is under pressure. Considering that industrial robots and CNC machine tool industry chains are expected to benefit from cyclical recovery, humanoid robots are expected to be commercialized; on November 2, 2023, the Ministry of Industry and Information Technology issued the “Guiding Opinions on the Innovation and Development of Humanoid Robots” to further catalyze the development of humanoid robots. As the harmonic reducer leader with the highest market share among domestic independent brands, Green Harmonics has large domestic replacement space and incremental business space, and the company has sufficient production capacity, product competitiveness and profitability at the forefront of the industry. The company's net profit from 2023-2025 is estimated to be 1.10, 1.92, and 276 million yuan respectively, corresponding to PE of 221.7, 127.0, and 88.2 times, and was given a “buy” rating for the first time.
Risk warning: increased competition in the reducer market; risk of fluctuations in gross margin; downstream market progress falling short of expectations; policy driving effects falling short of expectations; product iteration risk due to technological development and changes in market demand; risk of high price-earnings ratio due to falling short-term net profit; the assumptions and profit forecasts in this article are subjective