The “little giant” bearing company has taken root in the aftermarket. The company's main products are used in braking systems, power systems and transmission systems. The products include wheel bearing units, wheel bearings, cone bearings, clutch bearings, tensioner wheels and idler bearings, unidirectional pulleys, heavy truck bearings, drive motor bearings, etc. The product system is complete, covering more than 6,000 models. After 20 years of intensive cultivation, it has now entered a comprehensive development stage, completed full coverage of sales channels in major overseas aftermarket sales channels such as North America, Europe, and Asia, and entered the supply chain of leading companies in the NAPA, Huimen, Optimal, and SKF industries. According to the company's 11.28 investor research notes, the company's order demand began to grow in the third quarter. Currently, the company has sufficient orders in hand, and the capacity utilization rate has been effectively improved.

Accelerate the expansion of the layout. The company has accelerated its overseas expansion in recent years. The second phase of the Thai factory investment was completed in the first quarter of 2024 and gradually entered mass production. The third phase of the investment started in April '24 and is expected to be completed by the second quarter of 2025. Currently, the capacity utilization rate of the Thai factory is 70%-80%. The company is actively promoting the construction of an intelligent fund-raising project with an annual output of 6.29 million sets of high-end automobile bearings. It is expected that production capacity will be gradually released in the second half of '25 according to market demand, which will help the company expand the production capacity of high-end intelligent products, further enrich the product structure, improve the company's overall production and operation capacity, and lay a good foundation for the company to seek mainframe market projects.

Layout the robot blue ocean. In 2024, the company established the robot parts division, which is responsible for planning the development direction and overall layout of robot parts, and invested 0.117 billion yuan to invest in the construction of an “intelligent technology transformation project for robot components”. The main content is to build a production line for harmonic reducers, actuator modules, ball screws, and planetary roller screw products on the basis of the company's existing research and development results related to robot components to build a professional robot parts production base.

The company's main industrial advantage is precision parts manufacturing, which has certain synergy with robot parts manufacturing, and some R&D technology and production equipment can be shared. According to the company's 11.28 investor research report, the equipment on the harmonic reducer production line is currently being installed and commissioned, and mass production can begin in small batches after the installation and commissioning is completed, and sales revenue is expected to be generated in 2025.

Investment advice: We forecast that the company's revenue for 24-26 will be 0.793/0.975/1.201 billion yuan, respectively, and net profit to mother will be 0.18/0.217/0.267 billion yuan, respectively, covering the first time to give a “buy” rating.

Risk warning: trade frictions, capacity expansion falling short of expectations, performance and valuation judgments falling short of expectations