Key points of investment

Preferred choice: Leading humanoid robot companies, covering education, logistics, commercial, industrial, consumer and other markets, with intelligent robots as carriers and artificial intelligence technology as the core, launched “hardware+software+service+operation” intelligent service robot solutions for various industries such as AI education, smart logistics, smart health, and business services. In 2022, the company's business revenue of educational robots, logistics robots, customized robots in other industries, consumer robots and other hardware devices accounted for 51.2%, 26.1%, 8.2%, and 13.1%, respectively.

In 2022, the company achieved operating income of 1,008 billion yuan, an increase of 23% over the previous year; net profit to mother - 975 million yuan.

Technology: Strong R&D strength, experienced technical team

By the end of June 2023, the company's R&D team had more than 700 people, leading figures with extensive R&D experience, and had more than 1,800 registered patents related to robots and artificial intelligence, of which more than 900 were invention patents and more than 380 were overseas patents. The company has independently developed servo drives with low torque of 0.2 Nm to high torque of 200 Nm, and humanoid robots can have up to 41 degrees of freedom. The company will upgrade technical fields such as gait algorithms and control algorithms for biped robots, iteration and optimization of the USLAM 4.0 system, next-generation Walker R&D and commercial scenario development, and next-generation high-torque protectors, and explore technology upgrade cost reduction and commercialization scenarios.

Products: The categories are rich and diverse, and many new products are ready to go

The company has a diverse robot product line. By the end of June 2023, it had launched more than 60 types of products and sold more than 760,000 robots. In the field of education, the company ranked first in China's educational intelligent service robot industry in 2022, with a market share of about 22.5% (in terms of revenue), and has also successfully established business relationships with many government education bureaus. The company has sufficient reserves of new products, including 4 humanoid robots, and 4 have been commercialized.

Channels: Multi-level sales channels. Participating in large-scale events to shape the brand image, the company lays out multi-level sales networks around the world, including direct sales, traditional distribution, online/offline hybrid distribution, and self-operated online stores. Among them, revenue from direct sales channels accounts for the main, and the gross margin of direct sales and self-operation is higher than distribution.

On the marketing side, the company actively participated in large-scale events such as the Spring Festival Gala, World Expo, and Winter Olympics to shape the brand image.

Profit forecasting and valuation

Covered for the first time, a “gain” rating was given. We expect the company's net profit to be -1,113 million yuan, -888 million yuan, and -406 million yuan respectively in 2023-2025. The company's current R&D expenses are large, and losses are expected to continue to decrease as technology matures and revenue scale increases; operating income is 1,391 billion yuan, 2,333 billion yuan, and 3.188 billion yuan, respectively, with year-on-year growth rates of 37.9%, 67.8%, and 36.7%, respectively. The corresponding PS valuations are 24.5, 14.6, and 10.7 times, respectively. The company is the first listed humanoid robot. Currently, there is no comparable listed company. We selected Yuncong Technology, Obi Zhongguang, and Shangtang as comparable companies with similar industry attributes. The average PS value of the industry in 2023-2025 was 18.5, 12.7, and 8.7 times. Considering that the company is on a high growth track for humanoid robots, it was covered for the first time and gave it an “gain” rating.

Risk warning

The progress of technological development and industrialization falls short of expectations; industry competition intensifies; the company's downstream orders fall short of expectations; performance falls short of expectations due to excessive costs and expenses; risk of technology leakage or departure of core technical personnel, etc.