Stepper motors have broken the Japanese monopoly, and epitaxial endogenesis has continued to strengthen competitiveness. After more than 20 years of intensive cultivation, stepper motors have become one of the company's iconic products. From a global perspective, Narushi Electric's HB stepper motors have also joined the front line: Narushi Electric is the only company to break the Japanese monopoly in the field of HB stepper motors. In 2022, the company produced about 18 million units of HB stepper motors, ranking in the top three in the world in terms of sales volume and value.
We believe that the company's success in the field of stepper motors is mainly due to the company's superior support in terms of technology, scale, and customers. In the future, as the construction of new plants and new production capacity continues to advance, the company's competitiveness is expected to be further strengthened. In 2022, the main body of the company's Taicang intelligent manufacturing industry base was completed and put into use. The 2022Q3 began the relocation of production capacity from Shanghai to Taicang. The Taicang base is the company's largest production base with the most complete product line, and is expected to further improve the company's production and operation efficiency; in 2019, the company decided to invest in the Vietnam base to build a hybrid stepper motor project with an annual output of 4 million units, which has now been renovated and put into mass trial production.
Product collaboration helps expand categories, and contribute more and more
We believe that diversification of product categories is the only way for the company to grow bigger and stronger, because there is a certain size limit for a single product, and with reference to leading overseas companies (Shinano Japan, that is, ASPINA, Japan, etc.), the current layout also has multiple product categories. In addition to stepper motors, Mingzhi Electric has also been actively expanding other related product categories around the field of motion control to expand its business coverage. At present, the company's new products such as brushless motors, hollow cup motors, servos, and linear drives are widely used in high-end emerging downstream fields such as mobile robots, high-end medical devices, smart car electronics, semiconductors, lithium batteries, and photovoltaics. In recent years, with the continuous innovation, iteration and downstream expansion of the company's product technology, new products have achieved continuous rapid growth. The compound annualized revenue growth rate of the company's brushless motors, servo systems, linear motors/linear modules and electric cylinders in 2020-2022 was about 67%, 82%, and 42%, respectively.
Humanoid robots are expected to expand, and hollow cup motors open up room for growth. As technological empowerment and policy catalytic superposition application scenarios continue to be developed, the industrialization process of humanoid robots has continued to advance since 2023. As a source of dexterous manual power, hollow cup motors have broad prospects. According to Optimus, its hands have 12 finger drives, 6 actuators (2 thumbs) in each hand, and a load of 20 pounds with one hand. Each actuator module includes a hollow cup motor+a reduction mechanism (such as a precision planetary gearbox) +transmission mechanism (such as a cable/screw). From the demand side, the global hollow cup motor market is currently at the level of several billion yuan. If the humanoid robot volume reaches one million units, the global hollow cup motor market is expected to double. From the supply side, there are three leading companies in the global industry: Switzerland's Maxon, Germany's Fauhalber, and Portescap. Domestic companies mainly include Mingzhi Electric, Dingzhi Technology, and Raysai Smart.
In terms of technical capabilities, Minzhi obtained world-leading technology in the field of brushless motors and hollow cup motor driving and control through the acquisition of Swiss T Motion a few years ago. Currently, it has developed brushless hollow cup motors with a φ13-30mm stand size and brushed hollow cup motors with a frame size of φ8-24mm. At the same time, the company can also provide modular products with hollow cup motor+gearbox+screw+encoder+driver. In addition, the company's hollow cup motors have expanded a wealth of downstream industries and application scenarios, and have achieved good growth in medical care, semiconductor equipment, mobile robots, etc. We believe that humanoid robots are expected to further open up space for the company's growth. The company has better card position advantages in technology and clients, and is expected to be the first to benefit. The company is expected to achieve net profit of 174 million, 291 million, and 397 million in 2023-2025. The corresponding PE is 94x, 57x, and 41x, respectively, and is covered for the first time with a “buy” rating.
Risk warning
1. Performance recovery falls short of expectations; 2. Humanoid robot business expansion falls short of expectations; 3. Risk that profit forecasting assumptions are untrue or fall short of expectations.