Key points of investment

Core logic

A leading enterprise in the special robot industry, the reversal of traditional main business, the expansion of new industries, and the empowerment of products from large models are expected to drive the company's performance beyond expectations.

Logic that exceeds expectations

(1) The recovery of the traditional main business of power grid robots has exceeded expectations

1. Market expectations: The company's performance has been under pressure since the second half of last year. The pace of new orders for power grid robots and revenue conversion in the first half of this year was slow, and the market expects demand for grid robots to continue to be sluggish.

2. We predict that the traditional main business of power grid robots will continue to recover.

3. Driving factors: The company has long been deeply involved in the field of power grid robotics, leading product technology, and rich reserves of ongoing projects. It is expected that it will continue to transform to the order and revenue side in the future, and this business is expected to continue to reverse. In the long run, the intelligent demand represented by grid robots is the long-term direction of power grid development and construction, helping to improve the efficiency of grid fixed asset operation and maintenance. The slump in industry demand is temporary.

4. Inspection and catalyst: The company's power grid robot won the bid, and orders have clearly resumed.

(2) The expansion of new application fields such as commercial cleaning, rail transit, and smart shared charging has exceeded expectations.

1. Market expectations: The market for new application fields such as commercial cleaning, rail transit, and charging is not yet mature, and its scale growth is uncertain.

2. We predict that new application fields such as commercial cleaning, rail transit, and smart shared charging are in the rapid promotion stage, and subsequent customer and order expansion is expected to exceed expectations.

3. Drivers: First, the company has established rich technical reserves in vision technology, autonomous navigation technology, environmental sensing technology, AI algorithm technology, robot control technology, etc., and the general platform for robot underlying technology can rapidly empower the company's R&D expansion in these new application fields. Second, the company has been engaged in 2B business for a long time, and has a complete sales system and strong sales capacity in this field; the company's first shared charging system was successfully piloted in Suzhou in June last year, and has now been put into operation in Wuxi, Changzhou, Beijing, Nanjing, Shaoxing, Yinchuan and other places in just over a year, demonstrating its strong ability to land and sell new products. Third, the development of AI technology such as large models has greatly contributed to the human-computer interaction and generalized control capabilities of robots, helping to increase their penetration rate in new fields. New application fields such as commercial cleaning, rail transit, and charging are all blue ocean markets. The company is also an industry pioneer and market cultivator. With platform-based product development capabilities and strong 2B sales capabilities, it has already accumulated customer resources and product exploration. At the same time, considering the progress of AI technology, it is expected that robot products will continue to improve their ability to replace humans, and future orders are expected to be placed quickly.

4. Testing and catalysts: Commercial cleaning, rail transit customer breakthroughs, smart shared charging expansion from other locations, and continued order placement.

(3) The application of AI technology such as big models has a big impact on product power and sales 1. Market expectations: The application of AI technology such as big models in the field of robotics is slow, and it is still in the early stages of marketization.

2. We predict that AI technologies such as big models will accelerate implementation and application of the company's robot products and drive sales of the company's products.

3. Driving factors: Multi-modal technology is very helpful in improving the level of robot intelligence, and can improve the robot's human-computer interaction ability and generalized control ability. The company is actively exploring product-side applications of AI technology and has released the large model YJH-LM, which has functions similar to the “brain” and “cerebellum”. It helps robots quickly, accurately, and comprehensively understand and respond to human commands and intentions, and enhances their ability to perform tasks such as voice interaction, environment perception, task generation, and robot control. Functional tests have been completed on commercial cleaning robots, and it is expected that functional tests and applications will be implemented in other products in the future. The company also closely follows the development of the Huawei robot platform and explores opportunities for cooperation. HUAWEI CLOUD's Hongmeng model, artificial intelligence and other technologies can empower robot products. The company's exploration and implementation in AI fields such as large models is expected to further enhance the company's technological competitiveness and product strength.

4. Inspection and catalysts: The application of large models in the practical application of commercial cleaning and other products has been implemented and continuously upgraded and iterated, helping the company to improve its product strength and sales.

Profit forecasting and valuation

Maintain a “buy” rating. The company's net profit from 2023-2025 is estimated to be -0.71, 400, and 547 million yuan; the corresponding EPS is -0.35, 1.94, and 2.65 yuan respectively. Based on the closing price on November 17, the corresponding PE for 2024-2025 is 18 and 13 times, respectively. Comparable companies in the same industry, Shenhao Technology, Company 9, Eston, and Shitou Technology were given the company's 2024 target PE 25 times, corresponding to the target market value of 10 billion yuan, a target price of 48.50 yuan/share, and 42% of the current price space.

Risk warning

Investments in intelligent power grids fell short of expectations, market competition intensified, and the promotion of new products fell short of expectations.