Tuopu Group has focused on the automotive industry for more than 40 years and has four major divisions, forming a “2+N” product strategy. The domestic business of products such as shock absorption systems and interior and exterior systems is leading the domestic business, and businesses such as chassis systems and automotive electronics are steadily providing growth. The company grasps industry trends and actively expands high-quality customers. Major customers in 2023 include Tesla, Geely, BYD, and Cyrus. We have more than 50 subsidiaries and more than 70 manufacturing plants around the world to expand production capacity to meet customer needs.

Tuopu Group was founded in 1983 and has been working in the automotive industry for more than 40 years. The Group has four major divisions: power chassis systems, trim systems, Yuxiang Zhixing, and electric drives. It mainly produces products such as shock absorption systems, interior and exterior systems, body weight reduction, chassis systems, intelligent cockpit components, thermal management systems, air suspension systems, and actuators. The shock absorber and interior functional parts business ranks high in the country. More than 50 subsidiaries have been set up around the world, including 5 technology research and development centers, more than 70 manufacturing plants, and multiple technical support centers and warehousing and logistics centers, and a global business network has been established.

The company successfully grasped the three major industry trends of joint ventures, independent substitution and the rise of new forces. From 2011-2015, Tuopu's main customer was a joint venture customer, Shanghai GM; in 2016-2019, the strong rise of its own brands led to the company's sales growth; in 2019-2024, new energy customers such as Tesla became an important increase. The company entered the Tesla supply chain in 2016. Currently, various products such as interior and exterior functional parts, shock absorbers, chassis, and thermal management are installed on Tesla's main models, and Tesla customers accounted for 39.9% of revenue in 2023. With the influx of key customers, the company's business continues to grow steadily.

The business field continues to expand, forming a “2+N” product layout. From shock absorbers and interior parts to new businesses such as lightweight chassis and automotive electronics, it has formed eight major product systems. Industries with traditional advantages, mainly shock absorbers and interior and exterior, are developing steadily; comprehensive competitiveness in lightweight chassis and thermal management businesses continues to increase, and sales revenue has maintained steady growth; orders for automotive electronics products have begun to increase, and orders for air suspension projects, smart cockpit projects, line control IBS projects, and wire-controlled steering EPS projects have gradually begun mass production. In July 2023, Tuopu split up the robotics division to develop the robot actuator business.

The first coverage gave it a “Highly Recommended” rating. The company's various businesses continue to maintain a good development trend. New products are continuously mass-produced and offline, and customer resources are of high quality. We expect the company's net profit to be 2.99/3.8/4.73 billion yuan in 2024/2025/2026, respectively, for the first time covered with a “Highly Recommended” rating.

Risk warning: 1) risk of cyclical fluctuations in the automotive industry; 2) risk of international trade friction; 3) risk of relative concentration of customers; 4) risk of product quality control.