Key investment points

Company announcement: On November 27, the company issued the “Notice on the Company's Share Repurchase Plan and Obtaining a Special Loan Commitment Letter for the Repurchase of Shares from Financial Institutions”.

Price range for shares to be repurchased: no more than RMB 40 per share.

The number of shares to be repurchased and the ratio of the company's total share capital: Based on the maximum repurchase amount of 200 million yuan, the estimated number of shares to be repurchased is about 5 million shares, accounting for about 2.16% of the company's current total share capital. Based on the lower repurchase amount of 100 million yuan, the estimated number of shares to be repurchased is about 2.5 million shares, accounting for about 1.08% of the company's current total share capital; the specific number of shares to be repurchased at the end of the repurchase period is based on the actual number of shares to be repurchased.

Proposed repurchase amount: not less than RMB 100 million and no more than RMB 200 million.

Source of funds for the repurchase of shares: The funds for this share repurchase are own funds and special loans for share repurchase. The company has received the “China Construction Bank Loan Commitment” issued by the Wuxi branch of China Construction Bank and agreed to provide a special stock repurchase loan of no more than 100 million yuan for the company's stock repurchase. The loan period is 1 year. In addition to the above loans, the remaining capital of this share repurchase is the company's own capital.

The purpose and use of repurchasing shares: enhance investor confidence, enhance the company's value, and promote the company's sustainable and healthy development; the company plans to repurchase shares through centralized bidding transactions through the Shenzhen Stock Exchange trading system. All shares repurchased will be cancelled and the company's registered capital reduced.

Robotics business: The process technology involved in products such as high-precision motor cores, sensor modules, and ultra-precision parts in the company's existing products has a high degree of commonality with humanoid robots. According to a report by Wuxi Radio and Television 7.31, in the future, the company will focus on developing technologies such as rapid and precise positioning, multi-dimensional process sensing, and intelligent quality judgment, and plans to use 20-30 humanoid robots on site before the end of the year.

Aerospace business: Products mainly include satellite solar wing hinges, satellite solar wing compression release mechanisms, satellite solar wing drive components, satellite attitude control mechanisms, satellite antenna mechanisms, etc. The company signed a strategic cooperation agreement with Galaxy Aerospace to cooperate in the production and processing of core precision components such as satellite energy modules, communication modules and control modules. In addition, the company's Phase III plant is being built in an orderly manner, and the Microresearch Zhongjia Phase III aerospace production base is expected to complete the infrastructure part by the end of the year.

The proposed establishment of a joint venture in Chongqing is expected to increase the depth and breadth of supporting Cyrus. On November 1, the company reviewed and agreed that Longsheng Technology's subsidiary, Wuxi Longsheng New Energy Technology Co., Ltd. (Longsheng New Energy) and Maomao (Chongqing) Automobile Drive Systems Co., Ltd. (Chongqing Maomao), will jointly fund the establishment of Chongqing Longsheng Maomao New Energy Technology Co., Ltd. and invest in the construction of a factory in Chongqing.

Profit forecast and valuation: The company's 2024-2026 revenue is expected to be 2.661/3.347/4.067 billion, YOY is 45.6%/25.8%/21.5%, respectively; the estimated net profit to mother for 2024-2026 is 0.238/0.315/0.398 billion, YOY is 61.9%/32.6%/26.2%; EPS is 1.03/1.36/1.72/yuan/share, corresponding PE is 24.26/ 18.30/14.50 times Maintain a “buy” rating.

Risk warning: New business progress falls short of expectations; market development falls short of expectations, etc.