Core Viewpoint - The report highlights the growth and production statistics of China's AC motor industry, indicating a positive trend in output and market potential from 2025 to 2031 [1] Industry Summary - In April 2025, China's AC motor production reached 29.38 million kilowatts, reflecting a year-on-year increase of 2.3% [1] - From January to April 2025, the cumulative production of AC motors in China was 109.329 million kilowatts, showing a cumulative growth of 5.6% [1] - The report is based on data from the National Bureau of Statistics and is compiled by Zhiyan Consulting, a leading industry research institution in China [1] Company Summary - Listed companies in the AC motor sector include Wolong Electric (600580), Jiadian Co., Ltd. (000922), China Electric Motor (603988), Shanghai Electric (601727), and Dongfang Electric (600875) [1] - Zhiyan Consulting provides comprehensive industry research reports, business plans, feasibility studies, and customized services to support investment decisions in the AC motor industry [1]

Core Points - The electric motor sector experienced a significant decline of 4.43% on the trading day, with Zhaowei Electric leading the drop [1] - The Shanghai Composite Index closed at 3865.23, down 0.62%, while the Shenzhen Component Index closed at 12895.11, down 2.54% [1] Electric Motor Sector Performance - Major stocks in the electric motor sector showed mixed results, with some stocks like Dayang Electric and Kaizhong Precision seeing slight gains, while others like Zhaowei Electric and Mingzhi Electric faced substantial losses [2] - Zhaowei Electric's stock price fell by 7.71% to 116.67, with a trading volume of 109,100 shares and a transaction value of 1.319 billion [2] - The overall net outflow of funds from the electric motor sector was 1.369 billion, while retail investors saw a net inflow of 1.184 billion [2][3] Fund Flow Analysis - The main funds showed a net inflow in stocks like Dayang Electric, while other stocks like Shenli Co. and Bafang Co. experienced net outflows from main funds [3] - Retail investors contributed positively to several stocks, indicating a potential interest in the sector despite the overall decline [3]

Core Viewpoint - The rare earth sector has become a market focus amid escalating China-U.S. trade tensions and increased export controls on rare earths, with significant inflows into the rare earth ETF (516780) leading to record trading volumes and net inflows [1][2]. Group 1: Market Activity - On October 13, 2025, the rare earth ETF (516780) recorded a trading volume of 1.209 billion yuan, an increase of over 140% compared to the previous period, marking a new single-day trading record [1]. - The ETF saw a net inflow of 761 million yuan on the same day, setting a new record for single-day net inflows since its inception [1]. - The total size of the rare earth ETF (516780) reached 4.545 billion yuan, also a historical high, indicating strong liquidity and scale advantages [1]. Group 2: Regulatory Environment - On October 9, 2025, the Ministry of Commerce announced new export control measures on certain rare earth items, expanding the scope of controls to include technologies and equipment related to rare earth recycling, covering the entire industry chain [1][2]. - The new regulations are expected to strengthen supply rigidity in the rare earth sector, particularly in the context of ongoing U.S.-China competition [2]. Group 3: Industry Outlook - China remains the only country with the capability to produce a full range of rare earth products, holding significant advantages in both reserves and production [2]. - The industry is expected to maintain a tight supply-demand balance, supported by increasing demand driven by AI and other technologies, which may bolster product prices [2]. - The rare earth ETF (516780) closely tracks the CSI Rare Earth Industry Index, which includes companies involved in rare earth mining, processing, trading, and applications, with leading constituents being Northern Rare Earth, Wolong Electric Drive, Lingyi iTech, China Rare Earth, and Shenghe Resources [2].

Core Viewpoint - Morgan Stanley initiates coverage on Dechang Electric Holdings (00179) with a target price of HKD 67 and a "Buy" rating, while also setting a target price of RMB 43 for Wolong Electric Drive (600580.SH) with a "Neutral" rating, highlighting AI data centers, humanoid robots, and electric vertical takeoff and landing (eVTOL) aircraft as long-term growth drivers that will reshape industry profitability [1] Group 1: AI Data Centers - Wolong Electric Drive has supplied EC fans and cold plates to major domestic enterprises, while Dechang Electric provides integrated cooling pumps to top global hyperscale companies, indicating strong positioning in the AI data center cooling solutions market [1] - The long-term market size for AI data center cooling solutions is projected to reach 5 billion units, suggesting significant potential for growth [1] Group 2: Humanoid Robots - Dechang Electric supplies linear/rotary actuators and integrated dexterous hands for humanoid robots, while Wolong Electric Drive provides rotary actuators and dexterous hands, showcasing their contributions to this emerging sector [1] - The market for humanoid robots is expected to have a substantial growth trajectory, driven by advancements in technology and increasing demand [1] Group 3: Electric Vertical Takeoff and Landing Aircraft - The domestic market for eVTOL aircraft is anticipated to reach an annual production of 5,000 units by 2035, indicating a burgeoning industry [1] - Wolong Electric Drive collaborates with Geely's (00175) subsidiary, VoFly, while Dechang Electric leverages its automotive-grade technology to gain a competitive advantage in the eVTOL market [1]

Core Viewpoint - Morgan Stanley initiates coverage on Dechang Motor Holdings (00179) with a target price of HKD 67 and a "Buy" rating, while also setting a target price of RMB 43 for Wolong Electric Drive (600580.SH) with a "Neutral" rating, highlighting AI data centers, humanoid robots, and electric vertical takeoff and landing (eVTOL) aircraft as long-term growth engines that will reshape industry profitability [1] Group 1: AI Data Centers - Wolong Electric Drive has supplied EC fans and cold plates to major domestic enterprises, while Dechang Motor provides integrated cooling pumps to top global hyperscale companies, indicating strong positioning in the AI data center cooling solutions market [1] - The long-term market size for AI data center cooling solutions is projected to reach 5 billion units, suggesting significant potential for growth [1] Group 2: Humanoid Robots - Dechang Motor supplies linear/rotary actuators and integrated dexterous hands for humanoid robots, while Wolong Electric Drive provides rotary actuators and dexterous hands, showcasing their contributions to this emerging sector [1] - The market for humanoid robots is expected to have a substantial long-term growth potential, aligning with the overall industry trends [1] Group 3: Electric Vertical Takeoff and Landing Aircraft - The domestic market for eVTOL aircraft is anticipated to reach an annual production of 5,000 units by 2035, indicating a burgeoning market opportunity [1] - Wolong Electric Drive collaborates with Geely (00175) subsidiary VoFly Chang Kong, while Dechang Motor leverages its automotive-grade technology to gain a competitive advantage in the eVTOL market [1]

Core Viewpoint - Morgan Stanley has initiated coverage on Dechang Motor Holdings with a target price of HKD 67 and a "Buy" rating, and on Wolong Electric Drive with a target price of CNY 43 and a "Neutral" rating, highlighting AI data centers, humanoid robots, and electric vertical takeoff and landing (eVTOL) aircraft as long-term growth engines that will reshape industry profitability [1] Group 1: AI Data Centers - Wolong Electric Drive has supplied EC fans and cold plates to domestic ultra-large enterprises for AI data center cooling solutions, while Dechang Motor provides integrated cooling pumps to top global hyperscale companies [1] Group 2: Humanoid Robots - In the humanoid robot actuator segment, Dechang Motor supplies linear/rotary actuators and integrated dexterous hands, whereas Wolong Electric Drive offers rotary actuators and dexterous hands [1] Group 3: Market Potential - The long-term market size for these technologies is projected to reach 5 billion units, indicating significant potential for growth [1] Group 4: eVTOL Aircraft - The domestic market for eVTOL aircraft motors is expected to reach an annual production of 5,000 units by 2035; Wolong Electric Drive collaborates with Geely's VoFly, while Dechang Motor benefits from its automotive-grade technology accumulation, providing a competitive advantage upon market entry [1]

Group 1: ETF Performance and Liquidity - The rare earth ETF managed by Jiashi has a turnover rate of 4.05% and a transaction volume of 369 million yuan [3] - The latest scale of the Jiashi rare earth ETF reached 8.907 billion yuan, marking a new high since its establishment and ranking first among comparable funds [3] - In the past two weeks, the Jiashi rare earth ETF saw a significant increase of 248 million shares [3] - The latest net inflow of funds into the Jiashi rare earth ETF is 613 million yuan [3] - As of October 13, the Jiashi rare earth ETF has achieved a net value increase of 106.16% over the past year, ranking 4th out of 3066 index equity funds, placing it in the top 0.13% [3] - Since its inception, the Jiashi rare earth ETF recorded a highest monthly return of 41.25%, with the longest consecutive monthly increase lasting 4 months and a maximum increase of 83.89% [3] Group 2: Industry Insights and Demand Trends - The demand for rare earth elements is expected to benefit from the growth of industries such as new energy vehicles, wind power, and energy-saving motors, aligning with low-carbon and environmental policies [4] - The traditional peak demand season has arrived, and the supply-demand dynamics are likely to remain favorable, with rare earth prices expected to steadily improve [4] - It is anticipated that the performance of the rare earth industry chain will improve quarter by quarter in the third and fourth quarters of this year, with a continued recommendation for strategic allocation in the rare earth industry chain [4] Group 3: Key Stocks in the Rare Earth Sector - The top ten weighted stocks in the China Rare Earth Industry Index account for 61.96% of the index, including Northern Rare Earth, Wolong Electric Drive, Lingyi Technology, China Rare Earth, Shenghe Resources, Gree Environmental, Goldwind Technology, Baotou Steel, Xiamen Tungsten, and China Aluminum [3] - Notable stock performances include Northern Rare Earth with a 2.72% increase and China Aluminum with a 4.08% increase [6]

Core Viewpoint - The stock of Wolong Electric Drive has shown significant growth this year, with a year-to-date increase of 233.08%, despite a recent decline in the last five trading days [1] Group 1: Stock Performance - As of October 14, Wolong Electric Drive's stock price reached 47.33 CNY per share, with a market capitalization of 739.35 billion CNY [1] - The stock has experienced a 2.61% decline over the last five trading days, but a 15.52% increase over the last 20 days and a 127.99% increase over the last 60 days [1] - The company has appeared on the "Dragon and Tiger List" eight times this year, with the most recent appearance on September 18 [1] Group 2: Financial Performance - For the first half of 2025, Wolong Electric Drive reported a revenue of 8.031 billion CNY, reflecting a year-on-year growth of 0.66%, and a net profit attributable to shareholders of 537 million CNY, which is a 36.76% increase year-on-year [2] - The company has distributed a total of 2.056 billion CNY in dividends since its A-share listing, with 520 million CNY distributed in the last three years [3] Group 3: Shareholder Information - As of June 30, 2025, the number of shareholders for Wolong Electric Drive was 221,300, a decrease of 11.72% from the previous period [2] - The top ten circulating shareholders include Southern CSI 500 ETF, which increased its holdings by 4.5026 million shares, and Hong Kong Central Clearing Limited, which decreased its holdings by 416,380 shares [3]

Core Viewpoint - Yushu Technology is actively preparing for its IPO on the Sci-Tech Innovation Board, with plans to submit application materials between October and December 2025, marking a significant milestone for the company and the broader robotics industry in China [3][4]. Company Overview - Yushu Technology, established in August 2016 and headquartered in Hangzhou, specializes in high-performance quadruped robots, humanoid robots, and dexterous robotic arms, positioning itself as a globally recognized civil robotics enterprise [5]. Product Line - The company offers a range of products including: - Consumer-grade quadruped robots (Go1, Go2, A1) designed for home companionship and education [6]. - Industrial-grade quadruped robots (B1, B2) suitable for inspections and emergency rescue [6]. - General-purpose humanoid robots (H1, G1) aimed at developers for further customization [6]. - Derivative consumer products like the PUMP fitness pump [6]. Supply Chain and Partnerships - Yushu Technology has established deep collaborations with various suppliers, including: - Zhongdali De, a key supplier of precision reducers and motors, holding a 10% stake in Yushu Technology [10]. - Changsheng Bearings, providing self-lubricating bearings for humanoid robots [11][13]. - Best, a supplier of high-precision components for both Yushu Technology and Tesla robots [14][16]. - Other notable suppliers include Jiangsu Leili, providing brushless motors and gearboxes [39], and Jinfa Technology, supplying high-performance materials [29][31]. Market Context - The robotics industry is witnessing significant growth, with 75 listed companies reporting a total revenue of 582.1 billion and a profit of 30.1 billion in the first half of 2025, indicating a competitive landscape between traditional giants and AI newcomers [60].

Core Insights - The Ministry of Commerce has announced strengthened export controls on rare earth-related items, highlighting the strategic importance of rare earth resources and increasing market attention on the rare earth sector [1][2] - The rare earth ETF (516780) and its linked funds (Class A 014331, Class C 014332) are gaining investor interest as quality tools for exposure to the rare earth sector, with the underlying index showing a significant increase of 94.69% over the past year [1] Industry Overview - The export control measures require specific exporters to obtain licenses from the Ministry of Commerce before exporting rare earth items outside China, which is expected to tighten supply and enhance China's leverage in the rare earth supply chain [2] - The rare earth sector is experiencing a resonance of supply and demand, with China's quota management and export controls ensuring resources are directed towards high-end applications, while global green transformation and carbon neutrality goals are driving demand for key elements like praseodymium and neodymium [2] Market Performance - The top five constituents of the CSI Rare Earth Industry Index, which the rare earth ETF tracks, include North Rare Earth, Wolong Electric Drive, Lingyi iTech, China Rare Earth, and Shenghe Resources, collectively accounting for 41% of the index [1] - The strategic position of the rare earth industry is expected to strengthen further, providing long-term momentum for high-end manufacturing development [2]