Summary of Huichuan Technology Conference Call Company Overview - **Company**: Huichuan Technology - **Industry**: Industrial Automation and New Energy Vehicles Key Financial Performance - **Revenue Growth**: In the first three quarters of 2025, revenue reached 31.7 billion yuan, a year-on-year increase of 25% [3] - **Net Profit**: Net profit attributable to shareholders was 4.3 billion yuan, up 27% year-on-year, with a non-recurring net profit of 3.9 billion yuan, reflecting a 24% increase [3] - **Gross Margin**: Gross margin for the first three quarters was 29.27%, down 1 percentage point, primarily due to the increased proportion of the automotive business, which has a lower margin [3] - **R&D Investment**: R&D expenses increased significantly to 3 billion yuan, a 36% year-on-year rise, with an R&D expense ratio of 9.5% [3] Industry Insights - **Industrial Automation**: Remains a core focus, benefiting from smart manufacturing and digital transformation. The sector is viewed as a "golden track" with significant growth potential due to the integration of digital and AI technologies [5] - **New Energy Vehicles (NEV)**: The NEV sector saw substantial revenue growth of 39% year-on-year, despite facing intense competition. The company is expanding its overseas market presence to mitigate domestic competition pressures [8][5] Strategic Initiatives - **Global Expansion**: The company is actively pursuing global market opportunities, with overseas business growth reaching 50% in the first three quarters of 2025. The goal is to increase the overseas revenue share to 20% or more [20][15] - **Product Development**: Focus on high-margin products such as servo control systems and PLCs, with stable growth in general automation and significant growth in NEV revenue [8][7] - **Smart Robotics and Digital Energy Management**: New business units have been established to capture opportunities in smart robotics and digital energy management, which are seen as high-potential areas [6][17] Market Dynamics - **Domestic Market Recovery**: Most downstream industries have shown positive order growth, indicating a recovery in domestic manufacturing. The company has gained market share primarily by replacing foreign brands [9][10] - **Competitive Landscape**: The automotive industry is highly competitive, with the company focusing on enhancing product competitiveness to attract clients [21][34] Future Outlook - **Growth Projections**: Anticipated growth rate for the automation industry is around 20% for the fourth quarter and 2026, despite a high base effect from the previous year [41] - **Profitability Goals**: The company aims to improve net profit margins from approximately 12% to 13-14% through cost control and product mix optimization [24] Additional Insights - **Technological Advancements**: The company is integrating AI and digital technologies into its products, enhancing the efficiency of smart manufacturing solutions [27][46] - **Software Development Challenges**: The development of industrial software faces challenges due to the complexity of underlying mathematical models and market acceptance [47] - **Investment Strategy**: The company is pursuing a small-scale acquisition strategy to enhance its industrial software capabilities and build an ecosystem around its automation platform [48] Conclusion Huichuan Technology is positioned for growth in the industrial automation and NEV sectors, with a strong focus on R&D, global expansion, and product innovation. The company is navigating competitive pressures while capitalizing on market recovery and technological advancements.

华泰证券研报显示，在工控业务领域，汇川技术订单持续向好，收入增速高于该机构预期，超越行业表 现；看好公司不断加速全球市场突破、提升全球市场份额。新能源汽车板块，子公司联合动力9月于创 业板上市，长期看好公司持续巩固第三方头部地位、规模效应显现带动盈利水平提升。 国金证券研报称，公司已发布人形机器人相关零部件产品，包括旋转和直线模组、行星滚柱丝杠、驱动 器、无框力矩电机、仿生臂等。产品在扭矩、使用寿命和热稳定性等关键指标上已经实现了行业领先的 产品性能，同时是目前少数能够大规模量产"小体积、大动力、低温升"人形机器人核心零部件的公司， 看好业务长期增长潜力。 中证报中证网讯（记者 张兴旺）10月23日晚间，汇川技术发布2025年三季报。2025年前三季度，公司 实现营收316.63亿元，同比增长24.67%；实现归属于上市公司股东的净利润42.54亿元，同比增长 26.84%。 汇川技术表示，从公司各业务销售情况来看，2025年前三季度，通用自动化（含工业机器人）业务实现 销售收入约131亿元，同比增长约20%；新能源汽车和轨道交通业务实现销售收入约148亿元，同比增长 约38%；智慧电梯业务实现销售收入约36 ...

Group 1 - The core point of the news is that Huichuan Technology experienced a significant block trade on October 24, with a transaction volume of 68,700 shares and a transaction amount of 4.4312 million yuan, at a price of 64.50 yuan, which represents a discount of 17.71% compared to the closing price of the day [2][3] - Over the past three months, Huichuan Technology has recorded a total of 14 block trades, with a cumulative transaction amount of 999.3 million yuan [2] - On the same day, Huichuan Technology's closing price was 78.38 yuan, down 1.10%, with a turnover rate of 2.09% and a total transaction amount of 3.856 billion yuan, indicating a net outflow of 157 million yuan from main funds [2] Group 2 - The latest margin financing balance for Huichuan Technology is 3.515 billion yuan, which has increased by 43.92 million yuan over the past five days, reflecting a growth rate of 1.27% [3] - In terms of institutional ratings, three institutions have provided ratings for the stock in the past five days, with Dongwu Securities setting the highest target price at 100.50 yuan as of October 24 [3]

Core Insights - In the trading session on October 24, Huichuan Technology experienced a decline of 1.10%, closing at 78.38 yuan, with a significant block trade executed totaling 68,700 shares and a transaction value of 4.4312 million yuan [1] Trading Activity - The first transaction was priced at 64.50 yuan for 68,700 shares, resulting in a transaction value of 4.4312 million yuan, with a premium rate of -17.71% [1] - The buyer was from China Galaxy Securities Co., Ltd., Hangzhou Xinbei Road Securities Business Department, while the seller was from Guotou Securities Co., Ltd., Zhejiang Branch [1] - Over the past three months, the stock has recorded a total of 14 block trades, with a cumulative transaction value of 999.3 million yuan [1] - In the last five trading days, the stock has seen a cumulative increase of 1.02%, but the main capital has experienced a net outflow of 103 million yuan [1]

Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside of 15% to 35% [7][12]. Core Insights - The company reported a revenue of RMB 31.66 billion for the first three quarters of 2025, representing a year-over-year increase of 24.7%. The net profit attributable to shareholders was RMB 4.25 billion, up 26.8% year-over-year [8]. - The general automation business showed recovery, while the growth rate of the new energy vehicle components business has slowed down. The company achieved a revenue of RMB 11.15 billion in Q3, with a year-over-year growth of 21.0% [9]. - The gross margin for the first three quarters of 2025 was 29.27%, a decrease of 1.01 percentage points year-over-year, primarily due to intense competition in the new energy vehicle sector [9]. Summary by Sections Company Overview - The company operates in the electrical equipment industry, with a current A-share price of RMB 79.25 and a market capitalization of RMB 187.98 billion [2]. Financial Performance - For Q3 2025, the company reported a net profit of RMB 1.29 billion, a year-over-year increase of 4.0%. The adjusted net profit was RMB 1.22 billion, up 14.1% year-over-year [8][9]. - The company’s revenue composition includes 42.9% from general automation, 45.2% from new energy vehicles and rail transportation, and 11.3% from elevator electrical systems [3]. Profitability Forecast - The company is expected to achieve net profits of RMB 5.3 billion, RMB 6.4 billion, and RMB 7.3 billion for the years 2025, 2026, and 2027, respectively, with year-over-year growth rates of 24%, 21%, and 14% [9][11]. - The earnings per share (EPS) are projected to be RMB 2.0, RMB 2.4, and RMB 2.7 for the same years, with corresponding price-to-earnings (P/E) ratios of 40, 33, and 29 [11]. Market Position - Institutional investors hold 21.5% of the circulating A-shares, indicating a significant level of institutional interest in the company [4]. - The stock price has shown a decline of 5.7% over the past month but has increased by 21.2% over the past three months and 41.3% over the past year [2]. Business Development - The company has made rapid progress in humanoid robotics, launching several products and achieving full-stack research and development capabilities [9].

Group 1 - On October 24, Inovance Technology conducted a block trade of 68,700 shares, with a transaction value of 4.4312 million yuan, accounting for 0.11% of the total trading volume for the day [1] - The transaction price was 64.5 yuan, representing a discount of 17.71% compared to the market closing price of 78.38 yuan [1][2] - The buyer was China Galaxy Securities Co., Ltd., while the seller was Guotou Securities Co., Ltd. [2]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 104.41 [7]. Core Insights - The company reported a Q3 revenue of RMB 11.15 billion, a year-on-year increase of 21.05%, but a quarter-on-quarter decrease of 3.28%. The net profit attributable to shareholders was RMB 1.29 billion, up 4.04% year-on-year but down 21.87% quarter-on-quarter [1]. - The company's gross margin for Q3 was 27.51%, down 2.18 percentage points year-on-year and 2.13 percentage points quarter-on-quarter, primarily due to the impact of low-margin electric vehicle business [2]. - The industrial control business saw a revenue increase of 27% year-on-year in Q3, with strong order growth and performance exceeding industry expectations [3]. - The company is actively expanding into the humanoid robotics sector, leveraging its technology and supply chain advantages to drive commercialization [4]. - The profit forecast for the company remains stable, with expected net profits of RMB 55.35 billion, RMB 67.28 billion, and RMB 81.27 billion for 2025-2027, reflecting a compound annual growth rate of 23.78% [5]. Summary by Sections Financial Performance - Q3 revenue reached RMB 11.15 billion, with a year-on-year growth of 21.05% and a quarter-on-quarter decline of 3.28%. The net profit attributable to shareholders was RMB 1.29 billion, reflecting a year-on-year increase of 4.04% but a quarter-on-quarter decrease of 21.87% [1]. - For the first three quarters of 2025, total revenue was RMB 31.66 billion, up 24.67% year-on-year, and net profit was RMB 4.25 billion, up 26.84% year-on-year [1]. Business Segments - The industrial control segment generated approximately RMB 43 billion in Q3, a year-on-year increase of 27%. The electric vehicle and rail transit business generated about RMB 55 billion, up 23% year-on-year [3]. - The company is focusing on humanoid robotics, developing core components and providing scenario-based solutions to meet customer needs [4]. Research and Development - R&D expenses in Q3 increased by 40.28% year-on-year, with a focus on software development and products for overseas markets, which is expected to support long-term growth [2]. Valuation and Forecast - The company is projected to achieve net profits of RMB 55.35 billion, RMB 67.28 billion, and RMB 81.27 billion for 2025, 2026, and 2027, respectively, with an EPS of RMB 2.04, RMB 2.49, and RMB 3.00 [5]. - The target price of RMB 104.41 corresponds to a PE ratio of 42 times for 2026, reflecting the company's leading position in the industry and its growth potential [5].

Financial Data and Key Metrics Changes - The overall revenue for the first three quarters reached CNY 31.7 billion, representing a 25% year-on-year increase [17] - Net profit attributable to shareholders was CNY 4.3 billion, up 27% year-on-year [19] - Gross margin decreased to 29.27%, down by one percentage point due to changes in product structure [21] - R&D expenses increased by 36% year-on-year, totaling CNY 3 billion, accounting for 9.5% of revenue [22] Business Line Data and Key Metrics Changes - Industrial automation revenue for the first three quarters was CNY 13.1 billion, with a 20% growth [32] - New Energy Vehicles (NEV) revenue reached CNY 14.4 billion, a 39% increase year-on-year [33] - Intelligent Elevator revenue remained flat at CNY 3.6 billion [35] - In Q3, industrial automation revenue was CNY 4.3 billion, growing by 25% year-on-year, while NEV revenue was CNY 5.3 billion, a 22% growth [33][34] Market Data and Key Metrics Changes - The company noted a recovery in most downstream industries, with 30+ sectors experiencing positive growth in Q3 [49] - The automotive equipment sector saw significant market share gains, primarily from overseas competitors [51] - The overseas revenue for Innovance Automotive grew by 50% from January to September [80] Company Strategy and Development Direction - The company is focusing on expanding its overseas market presence, as the overall size of the overseas business is two to three times larger than that of China [7] - Innovance is positioning its dual key businesses—industrial automation and innovative automotive—as "golden tracks" for future growth [6] - The company is restructuring to form new business units for intelligent robots and digital energy management to capture emerging opportunities [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining growth momentum despite competitive pressures, particularly in the automotive sector [26] - The company anticipates that the demand for intelligent vehicles will continue to rise, driven by electrification and technological advancements [92] - Management acknowledged challenges in the domestic market due to price wars but remains optimistic about overseas expansion and new product developments [76][90] Other Important Information - The company is actively investing in R&D to enhance product offerings, particularly in intelligent robotics and digital energy management [22][74] - The establishment of a global business group marks a significant step in the company's international expansion strategy [31] Q&A Session Summary Question: Future trends in the manufacturing industry and order placements - Management noted a recovery in Q3 with positive growth in most industries, indicating a rebound in manufacturing demand [49][50] Question: Market share growth and competition - The company is gaining market share primarily from overseas competitors, particularly in automotive and semiconductor sectors [51][52] Question: Overseas business investments and strategies - Management highlighted the importance of local hiring and R&D investments to support overseas expansion [55][56] Question: Humanoid robot business strategy - The company is focusing on core components for humanoid robots while exploring full robot solutions, with positive feedback from potential customers [68][69] Question: Digital energy management strategy - The company is shifting focus from energy storage to broader digital energy management solutions, aligning with market trends [75][76] Question: NEV business outlook - Despite a slowdown in Q3, management remains confident in achieving a 30% year-on-year revenue growth target for the NEV business [79][80]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [4][10]. Core Insights - The company reported a revenue of 31.66 billion yuan for the first three quarters of 2025, representing a year-on-year growth of 24.7%, with a net profit attributable to shareholders of 4.25 billion yuan, up 26.8% year-on-year [2]. - The company's core business in industrial automation is stable, while the electric vehicle segment shows high growth potential. Strategic expansions into new product categories, international markets, digitalization, energy management, and embodied intelligence are expected to continue driving growth [4]. Summary by Sections Performance Review - For Q3 2025, the company achieved a revenue of 11.15 billion yuan, a year-on-year increase of 21.0%, with a net profit of 1.29 billion yuan, up 4.0% year-on-year. The slight underperformance was attributed to increased R&D expenses and asset impairments [2]. Operational Analysis - **General Automation**: Revenue for the first three quarters reached 13.1 billion yuan, up 20% year-on-year, with Q3 revenue of 4.3 billion yuan, a 26% increase. The company is capitalizing on demand from logistics, semiconductors, and lithium battery sectors, with a focus on expanding overseas and in process industries [3]. - **New Energy Vehicles**: The subsidiary achieved a revenue of 14.53 billion yuan in the first three quarters, a 35.5% increase year-on-year. However, Q3 profits declined by 15.6% due to rising sales, management, and R&D expenses. The company anticipates profit margins to improve as new projects ramp up production [3]. Profit Forecast, Valuation, and Rating - The company is projected to achieve net profits of 5.47 billion yuan, 6.66 billion yuan, and 8.00 billion yuan for 2025, 2026, and 2027, respectively, with year-on-year growth rates of 28%, 22%, and 20%. The current price corresponds to P/E ratios of 39, 32, and 27 for the respective years [4].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][12] Core Views - The company's revenue for Q3 2025 increased by 21% year-on-year, while net profit grew by 4%, with revenue meeting expectations but profit slightly below expectations [2] - The general automation business shows a positive growth momentum, with expected continued recovery in Q4 and next year [3] - The electric vehicle segment is experiencing revenue growth driven by targeted volume increases, although profit is under short-term pressure due to increased expenses [4] - The elevator segment remains stable, with revenue expected to hold steady due to large-scale projects and overseas expansion [4] - The humanoid robot segment is expanding with new product releases, aiming to become a solution provider [5] - R&D investments have led to increased operating expenses, impacting short-term cash flow [5] Summary by Sections Financial Performance - For Q1-Q3 2025, the company reported revenues of 316.6 billion and 111.5 billion for Q3, with year-on-year growth of 25% and 21% respectively. Net profit for the same periods was 42.5 billion and 12.9 billion, with year-on-year growth of 27% and 4% respectively [2] - The gross margin for Q3 was 27.51%, down by 2.18 percentage points year-on-year [2] General Automation - Revenue for the general automation business was 131 billion for Q1-Q3 and 43 billion for Q3, with year-on-year growth of 20% and 26% respectively. The growth rate in Q3 showed a significant improvement [3] - Orders from July to September increased by 25-30% year-on-year, with expectations for Q4 to maintain similar growth [3] Electric Vehicles - Revenue from the electric vehicle and rail transit segments was 148 billion and 58 billion for Q1-Q3 and Q3 respectively, with year-on-year growth of 38% and 32% [4] - The gross margin for this segment was 14.5% in Q3, down by 2.9 percentage points year-on-year [4] Elevator Segment - Revenue for the elevator segment was 36 billion for Q1-Q3, remaining stable year-on-year [4] - The company is focusing on large-scale projects and overseas markets to drive growth [4] Humanoid Robots - The company is expanding its product offerings in humanoid robotics, including actuators and bionic arms, aiming to position itself as a solution provider [5] R&D and Expenses - Operating expenses for Q3 were 18.11 billion, with a year-on-year increase of 15.2%. R&D expenses were 10.3 billion, up 40% year-on-year [5]