Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 7.61, indicating a potential upside of 24% from the current price of HKD 6.14 [5][7][58]. Core Insights - The automotive steering system is transitioning from Electric Power Steering (EPS) to steer-by-wire (SbW) technology, which offers better responsiveness and safety features essential for advanced driving assistance systems (ADAS) and L3+ autonomous driving [5][30]. - The company's profitability is recovering, supported by a robust order book and strategic expansion into the steer-by-wire product line, which positions it competitively in the evolving automotive landscape [6][58]. - The company is expected to achieve significant revenue growth, with projected revenues of USD 4.47 billion, USD 4.77 billion, and USD 5.07 billion for FY2025, FY2026, and FY2027, respectively, reflecting year-on-year growth rates of 4.5%, 6.8%, and 6.2% [7][58]. Summary by Sections Company Overview - The company is a global leader in motion control technology, providing solutions for electric and hydraulic steering systems, steer-by-wire systems, and software solutions to over 60 customers, including major automotive manufacturers [16][21]. Transition to Steer-by-Wire - The shift from EPS to steer-by-wire is driven by the increasing demand for autonomous driving capabilities, with the technology expected to enhance vehicle safety and performance [30][31]. Recovery of Core Business - The company has seen a significant recovery in profitability, with net profit for 2024 projected at USD 61.72 million, a 68.1% increase from 2023 [6][38]. - The total order volume for 2024 reached USD 6 billion, with 31% of orders being new business, showcasing the company's competitive strength [41]. Financial Projections - The company forecasts revenues of USD 4.47 billion for FY2025, with a net profit of USD 121 million, representing a 96.2% increase year-on-year [58]. - The projected net profit margins are expected to improve, with net profit margins of 2.7%, 3.4%, and 3.7% for FY2025, FY2026, and FY2027, respectively [8][58]. Strategic Product Development - The company is expanding its steer-by-wire product portfolio, including the launch of rear-wheel steering (RWS) and electronic mechanical brake (EMB) systems, which are expected to enhance vehicle performance and safety [52][53]. - The EMB system represents a significant advancement in brake technology, replacing hydraulic systems with electronic controls for improved precision and integration [52]. Market Position and Competitive Advantage - The company maintains a strong market position in China, with a 16.16% market share in the EPS segment, ranking second in the domestic market [29]. - The strategic focus on software-defined vehicles (SDV) and collaboration with manufacturers enhances the company's ability to meet evolving market demands [36][37].
耐世特（01316）：主业盈利能力回升，构建完善的线控底盘产品组合