Green harmonics: Deeply cultivate the field of harmonic speed reducers and accelerate the deployment of mechatronic products. The company was founded in 2011. After years of continuous R&D investment, the company pioneered the industrial production and large-scale application of harmonic speed reducers in China, breaking the monopoly of international brands in the field of harmonic speed reducers. The company is deeply involved in the field of precision transmission. With advanced technical level, high-precision manufacturing capabilities and a perfect product system, the company has formed a layout with harmonic reducers as the core and expanded to mechatronic products. It has successfully established a strong brand reputation in the industry and has grown into a leading domestic enterprise. The company's downstream customers are widely distributed in various industries and fields such as industrial robots, service robots, CNC machine tools, photovoltaic equipment, medical devices, etc.

The harmonic reducer market is growing rapidly, and domestic substitution is being carried out at an accelerated pace. Driven by new industries and new technology, the application prospects of harmonic reducers are becoming more and more broad. According to MIR Rui Industrial's forecast, China's harmonic reducer shipments will increase from 470,000 units to 790,000 units from 2021 to 2024, with a CAGR of 18.9% during this period. The global harmonic reducer market concentration is extremely high, and the leading Japanese manufacturer Hamanaco accounts for about 80% of the market share; in the domestic market, domestic brands such as Green Harmonic, Laifu Harmonic, and Dazu Precision are catching up with advantages such as cost performance and customized services, and the localization rate is gradually increasing.

Multiple fields promote the expansion of the harmonic reducer market. 1. Industrial robots: As the largest downstream application of harmonic reducers, industry recovery will drive the release of harmonic reducers. According to our estimates, the number of harmonic reducers used in the industrial robot field in 2024 is 1,069 million units, and the market size is expected to exceed 1.5 billion yuan. 2. Industrial mother machine: Driven by the resonance of the three factors of autonomy and control, the renewal cycle and industrial transformation, the machine tool industry is moving towards the middle and high-end. Harmonic reducers can improve the performance and lifespan of machine tools, and the application prospects are very broad. 3. Humanoid robots: Harmonic speed reducers are mainly used in the rotating actuators of humanoid robots. A single BOT requires 16, worth about 24,000 yuan. If Optimus delivers 1 million units, it is expected to bring 10 billion incremental space to the harmonic reducer.

Reviewing Hamanaco, the multi-dimensional nature of green strengthens its leading position in the country. The company has core competitive advantages in six major dimensions, including product, technology, strategy, production capacity, customer, and market. 1. The company's product performance is close to HD, and the price of products of the same type is generally 40-50% lower than HD; 2. The company independently develops and breaks through technical blockades, has the core technology “P tooth” harmonic meshing tooth shape and a unique patented “Y series” reducer; 3. The company uses harmonic reducers as an advantage to lay out mechatronic products to expand mechatronic products such as industrial robot joints, electrohydraulic drive joints, and machine tool CNC turntables. The subsidiary Kaixuan intelligently lays out frameless torque motors to jointly build robot actuators 4;. The company is actively expanding production and is determined An additional capital of 2,027 billion yuan was raised to increase the production capacity of next-generation harmonic reducers by 1 million units and 200,000 sets of mechatronic products; 5. The company cooperated steadily with mainstream robot manufacturers at home and abroad, such as Eston and Universal Robots, and obtained ISO9001 and IS014001 international quality system certifications; 6. The company laid out two major overseas R&D and production bases in North America and Europe, and established a joint venture with Sanhua Intelligent Control to expand overseas channels.

Investment advice: We expect the company's revenue for 2023-2025 to be 389 million yuan, 577 million yuan, and 844 million yuan; net profit to mother of 1.08, 1.85, and 263 million yuan respectively; and EPS of 0.64, 1.09, and 1.56 yuan, respectively. Combined with industry average valuations, considering the company's first-mover advantage and leading position in the field of harmonic speed reducers, it is expected to fully benefit from the recovery and growth of downstream, including industrial robots, industrial mother machines, and humanoid robots. It is expected to fully benefit from the recovery and growth of downstream robots, including industrial robots, industrial mother machines, and humanoid robots. It will be covered for the first time, and given a “recommended” rating.

Risk warning: increased market competition; product iteration; declining industry sentiment; exchange rate fluctuations.