Global Research Solid outlook for auto parts business Management believes that Minth's auto parts business possesses solid growth momentum, primarily driven by: 1) a comprehensive global capacity layout, which could mitigate potential impacts from trade friction risks and meets OEMs' requirements of localised supply, thereby supporting the overseas business expansion; 2) rising content value per vehicle through product integration and systematization; 3) active expansion in low-penetrated new regions, such ...

Group 1 - JPMorgan Chase & Co. reduced its stake in Minth Group (00425.HK) by selling 2,797,122 shares at an average price of HKD 33.4474 per share, totaling approximately HKD 93.56 million [1] - After the sale, JPMorgan's total holdings in Minth Group decreased to 69,715,715 shares, representing a reduction in ownership from 6.16% to 5.92% [1]

香港联交所最新资料显示，11月24日，摩根大通减持敏实集团(00425)279.7122万股，每股作价33.4474 港元，总金额约为9355.65万港元。减持后最新持股数目约为6971.57万股，最新持股比例为5.92%。 ...

Group 1 - Morgan Stanley reduced its stake in Sensata Technologies (00425) by 2,797,122 shares at a price of HKD 33.4474 per share, totaling approximately HKD 93.5565 million [1] - After the reduction, the latest number of shares held is approximately 69,715,700, representing a holding percentage of 5.92% [1]

Summary of the Conference Call for Meishijituan Industry and Company Overview - The conference call discusses Meishijituan, a company that has successfully expanded from automotive exterior parts to emerging businesses such as robotics and liquid cooling, leveraging its technological accumulation and global layout advantages [2][4][5]. Key Points and Arguments Business Performance and Financials - Meishijituan is currently in a capacity harvesting phase, with improved operational efficiency and profitability. Capital expenditures are expected to decline significantly starting in 2024, with only 900 million yuan projected for the first half of 2025. Gross margin is anticipated to increase from 19% in 2023 to 23% in the first half of 2025, benefiting from strong domestic and international market performance [2][6]. - The company aims to optimize its core business while increasing investment and R&D in emerging sectors like robotics, liquid cooling, and low-altitude technologies to maintain a technological edge and diversify revenue sources [2][9]. Market Opportunities - The European new energy market positively impacts Meishijituan's battery box business, with a target penetration rate of 25.7% for new energy vehicles in 2025. The company holds approximately 30% market share in Europe and has a well-established production capacity, allowing it to benefit from market growth [2][7][8]. - In the domestic battery box market, Meishijituan's market share is around 11%. If it reaches 15% domestically and 40% and 30% in Europe and the U.S. respectively, profit margins are expected to significantly increase, potentially creating a company of equal scale [2][10]. Emerging Business Developments - Meishijituan has made significant progress in emerging businesses, including robotics, liquid cooling, and low-altitude products. The company maintains a high R&D expenditure of 6% to 7%, which is a key factor in its rapid transformation [2][11][12]. - In the liquid cooling sector, the company has achieved mass production capacity, with an expected output value of 455 million yuan. Collaborations with partners like San Ai and Fu Man are enhancing its production capabilities [4][13]. - The low-altitude market is projected to have trillion-level potential. The establishment of Meiyi Technology and a strategic partnership with Yihang Intelligent are expected to contribute revenue in the coming years [2][14]. Valuation and Future Profit Expectations - For 2025, Meishijituan anticipates profits of approximately 2.8 billion yuan, potentially rising to 3.3 billion yuan in 2026. The current valuation is around 10 times earnings, with new businesses expected to be valued at 20 to 30 times PE based on future revenue and profit margins [2][15]. - Historically, the company has maintained a dividend payout ratio of around 40%. If this ratio returns to 40% and core business growth accelerates, the main business could support a valuation of around 15 times, with emerging businesses providing additional valuation upside [2][15]. Other Important Insights - The company’s historical accumulation of technology in aluminum parts, battery boxes, and wireless charging has provided a solid foundation for entering robotics and liquid cooling sectors [5]. - The strategic layout and technological reserves in production and manufacturing have positioned Meishijituan favorably to seize industry development opportunities [4][5].

Investment Rating - The report rates Minth shares as "Buy" with a target price raised to HK$46 from HK$38, reflecting an expected share price return of 31.4% and a total return of 33.6% [1][7][17]. Core Insights - Management anticipates a positive outlook with revenue growth accelerating in 2026, driven by new business initiatives, a return to growth in domestic revenue, and strong growth in Europe [1][4]. - New business initiatives include robotics, AI server liquid cooling products, and eVTOL, projected to contribute a total revenue of Rmb10 billion by 2030 [2][4]. - The company expects to maintain capital expenditures around Rmb2 billion in 2025/26, leveraging existing auto parts capacity for new initiatives [3]. Revenue and Profit Estimates - The forecast for net profit in 2H25 is Rmb1.48 billion, representing an 18.3% year-over-year increase [4]. - Revenue forecasts for 2026 and 2027 have been raised by 4-7% to Rmb29.3 billion and Rmb32.0 billion, respectively, due to contributions from new initiatives and improved domestic revenue visibility [4]. - The expected dividend payout ratio for 2025 is projected to rise to 30%, with a dividend yield of 2.2% [4]. Market Share and Growth - Minth's battery housing market share in Europe is expected to increase from approximately 36% in 2024 to over 40% in 2025, supported by design wins from major EV manufacturers [5][6]. - The gross margin for AI server liquid cooling products is anticipated to be around 35% in the early stages, with long-term margins projected at over 30% [2]. Financial Summary - For the year ending December 31, 2023, net profit is reported at Rmb1.903 billion, with diluted EPS of Rmb1.654, reflecting a growth of 26.9% [6]. - The projected P/E ratio for 2026 is 11.2, indicating a favorable valuation compared to historical averages [6][18].

Investment Rating - The report maintains a "Buy" rating for the company [12]. Core Insights - The company is experiencing accelerated growth in its core automotive business, driven by the rapid adoption of new energy vehicles in Europe, while also making significant strides in new business areas such as robotics, liquid cooling, and low-altitude economy [10][18]. Summary by Sections Company Overview - The company is a global leader in automotive exterior parts and has successfully expanded into the battery box business since 2017, becoming one of the top players in this sector. The ongoing increase in the penetration of new energy vehicles in Europe is expected to further boost the company's core business growth [3][7]. Business Performance - The company is entering a capacity harvesting phase, with operational efficiency improving and profitability on an upward trajectory. The capital expenditure peaked in 2022 at 34.1 billion, but is projected to decrease significantly in 2024, supporting future dividend increases [6][26]. Battery Box Business - As one of the largest battery box suppliers globally, the company benefits from Europe's clear carbon reduction goals and the resurgence of electric vehicle subsidies. The penetration rate of new energy vehicles in Europe is expected to reach approximately 19.6% in 2024, with significant growth anticipated in subsequent years [7][49]. New Business Ventures - The company is strategically diversifying into multiple business areas, including robotics, liquid cooling, and low-altitude economy, which are expected to create new growth trajectories. The robotics sector is projected to see significant advancements by 2025, while liquid cooling is becoming increasingly important due to rising energy efficiency demands [8][9]. Financial Projections - The company is expected to see substantial increases in net profit, with projections of 28.1 billion, 33.1 billion, and 40.6 billion for the years 2025 to 2027, respectively. The corresponding price-to-earnings ratios are forecasted to be 12.9X, 11.0X, and 8.9X [10][18].

Core Viewpoint - The battery box business of Minth Group is in a high growth phase, driving performance growth and valuation enhancement, with a target price raised from HKD 42 to HKD 50, corresponding to a forecasted P/E ratio of 15.2 times for 2026 [1][2] Group 1: Business Development - Minth Group's liquid cooling products are set for mass production, including immersion cooling cabinets, CDU, cooling plates, and distributors [1] - The subsidiary, Precision Industry, has received orders from a Taiwanese AI server manufacturer for the design, development, and production of immersion cooling cabinets, with deliveries expected to start in mid-November 2025 [1] - Minth Group has also passed technical validation for distributors from another Taiwanese AI server liquid cooling system manufacturer, with the first batch of products expected to be delivered by the end of December 2025 [1] Group 2: Emerging Business Potential - The company is focusing on two main product systems in low-altitude flight, collaborating with several flying car/eVTOL companies, and has signed a strategic agreement with EHang for mass production orders [2] - In the robotics sector, the company is concentrating on integrated joint modules, robotic electronic skin, smart masks, wireless charging systems, and limb structures, having signed a strategic cooperation agreement with Zhiyuan Robotics [2] - The projected net profit for the company is expected to reach CNY 2.76 billion, CNY 3.39 billion, and CNY 4.15 billion for 2025-2027 [2]

Core Insights - The company has experienced significant growth in its battery box business, driven by the rapid expansion of the European electric vehicle market, resulting in a year-on-year revenue increase of 10.8% to 12.287 billion RMB and a net profit growth of 19.5% to 1.277 billion RMB [1] - The battery box business has seen a nearly 50% year-on-year increase in revenue, reaching 3.582 billion RMB, which now accounts for 29.2% of total revenue, marking it as the largest revenue source for the company [1] - The company is actively exploring new sectors such as AI, robotics, low-altitude economy, and smart mobility, aligning with its strategic goal of achieving 82 billion RMB in revenue by 2030, representing a compound annual growth rate of 23% from 2024 to 2030 [1] Group 1 - The company announced new orders for AI liquid cooling systems from a Taiwanese AI server manufacturer, with product deliveries expected to begin in mid-November [2] - The company has also passed technical validation for a splitter system from another Taiwanese AI server liquid cooling system manufacturer, with initial product deliveries anticipated by the end of December [2] - An investor visit to the AI liquid cooling and robotics production lines is scheduled, which may enhance investor confidence and act as a short-term catalyst [2] Group 2 - Emerging businesses are entering a high growth phase, with projected revenue and adjusted profit compound annual growth rates of 14.2% and 18.2% respectively for the fiscal years 2024 to 2027, although current growth rates are slower than the company's strategic targets [3] - If the company can meet its strategic goals, it may present a potential surprise for investors [3] - The current valuation corresponds to approximately 12.7 times the forecasted FY25E price-to-earnings ratio, which is higher than the average over the past five years, but the expansion of emerging business applications is expected to drive upward valuation [3]

Investment Rating - The report assigns a "Buy" rating to the company, with a target price raised from 42 HKD to 50 HKD, corresponding to a projected P/E ratio of 15.2 times for 2026 [1][3][6]. Core Insights - The company is experiencing rapid growth in its battery box business, which is driving performance improvements and valuation increases. Emerging businesses are gradually taking shape, contributing to overall growth [1][3]. - The company has secured significant orders for liquid cooling products, including immersion cooling cabinets and other components, with mass production expected to begin soon. These products are aimed at major semiconductor clients [2][3]. - The company is also expanding into new business areas such as eVTOL and robotics, having established strategic partnerships and received production orders from leading firms in these sectors [3]. Financial Projections - The company is projected to achieve net profits of 2.76 billion RMB in 2025, 3.39 billion RMB in 2026, and 4.15 billion RMB in 2027, reflecting a strong growth trajectory [4][10]. - Revenue is expected to grow from 20.52 billion RMB in 2023 to 38.01 billion RMB in 2027, with a compound annual growth rate (CAGR) of approximately 20% [4][10]. - The gross margin is anticipated to improve slightly from 27.4% in 2023 to 29.5% in 2027, indicating enhanced operational efficiency [4][10].