Key points of investment

A leading intelligent equipment company, Shenzhen Hi-Tech Investment is the largest shareholder. The company's endogenous+epitaxial collaborative development space company was founded in 2003 and listed on the Shenzhen Stock Exchange in 2011. The company mainly produces intelligent manufacturing equipment and automation systems. Its products cover the fields of automobiles, new energy, rail transit, etc., and provides industrial automation solutions such as industrial robots, automated production lines, and intelligent warehousing and logistics systems.

The intelligent manufacturing equipment industry is growing steadily, and robotics, logistics and warehousing, intelligent assembly, lithium batteries, etc. are flourishing at many points (1) Robotic automation: accounting for 18% of revenue in 2023. The global welding robot and global intelligent welding robot market is growing rapidly. According to GGII data, the global sales volume of intelligent welding robots will be 0.004 million units in 2023, and the global sales volume is expected to reach 0.0503 million units by 2030. The CAGR will reach 43.6% in 2023-2030, and the market size is expected to exceed 8 billion yuan.

(2) Logistics and warehousing automation: accounting for 45% of revenue in 2023. The penetration rate of intelligent warehousing in commercial distribution and industrial applications continues to increase. China's smart warehousing market reached 114.55 billion yuan in 2021, is expected to reach 266.53 billion yuan by 2026, and the CAGR is expected to reach 18.4% in 2021-2026.

(3) Automated transportation and intelligent assembly line: The revenue share in 2023 will reach 37%. According to MarketsAndMarkets, the global smart manufacturing market size is $88.7 billion in 2021, and is expected to reach $228.2 billion in 2027, with a CAGR of 18.5% in 2027.

(4) The penetration rate of new energy vehicles continues to increase, and the company continues to expand into the field of lithium batteries: according to the IEA, global NEV sales will reach 14 million units in 2023, and are expected to reach 44 million units in 2030, and the CAGR will reach 18.7% in 2023-2030. The global NEV penetration rate is 18% in 2023, and the penetration rate is expected to reach 30% in 2030. There is plenty of room for increased demand for lithium battery automation equipment. As an intelligent automation equipment system service provider, the company will rely on its technical advantages to seek business expansion into the lithium battery industry in the future. According to the company's announcement, the company is in contact with companies related to the lithium battery equipment industry to plan a cash share purchase.

High-quality customers cooperate steadily, actively expand overseas markets, and continue to expand its business layout (1) The company provides intelligent equipment products and services to many Fortune 500 customers such as BMW, GM, Volkswagen, VOLVO, Ford, Chrysler, Nissan, Honda, Toyota, Tesla, Daimler, BYD, Geely, and Cyrus, and has received unanimous praise from customers. The company has manufacturing bases and R&D centers in Shanghai, Wuhan, Yantai, Shiyan, and Detroit and New Jersey in China, and its business targets global core customer markets.

(2) Shenzhen Hi-Tech Investment Group is the largest shareholder of the company and is expected to use its industrial resource advantages to inject high-quality assets into the company in due course. With resource integration and financial support, the company's main business is expected to enter the fast track of development, gradually increase profitability, further optimize the downstream application layout, and open up new markets.

Profit forecasting and valuation

We expect the company's net profit to be 0.12 billion yuan, 0.2 billion yuan, and 0.25 billion yuan respectively, with year-on-year increases of 58%, 60%, and 30%, respectively. The 2023-2026 CAGR is about 49%, corresponding to 2024-2026 PE about 64, 40, and 31 times, respectively. As a leading domestic intelligent manufacturing equipment enterprise, the company has endogenous+epitaxial two-wheel drive, which is expected to open up room for growth, cover for the first time, and give it an “increase in weight” rating.

Risk warning: Vehicle companies' capacity construction falls short of expectations; exchange rate fluctuations affect; overseas production capacity construction progress falls short of expectations