Tuopu Group(SH:601689)2025-06-19 09:47Investment Rating - The report upgrades Ningbo Tuopu to an Overweight (OW) rating with a price target of Rmb56.00, reflecting a positive outlook based on recent developments and recovery in sales volume from key customers [2][41]. Core Insights - The worst is considered to be behind for Tuopu, with signs of recovery in sales volume from key customers Tesla and Seres. The company is expected to benefit from upcoming catalysts such as Tesla's Robotaxi and AI Day events [7][9][41]. - Tuopu is gradually reducing its reliance on Tesla by expanding its customer base among domestic NEV manufacturers, which is expected to enhance revenue stability [13][41]. - The company anticipates mitigating the impact of US tariffs by leveraging production capacities in Thailand and Mexico, thereby reducing its export exposure [41]. Summary by Sections Financial Performance - Tuopu's revenue for FY24 is estimated at Rmb26.6 billion, with projections of Rmb33.6 billion for FY25 and Rmb41.6 billion for FY26, indicating a growth trajectory [12][18]. - The adjusted net income is projected to grow from Rmb2.999 billion in FY24 to Rmb3.572 billion in FY25, reflecting a year-on-year growth of 19% [12][18]. Customer Insights - Tesla and Seres are significant contributors to Tuopu's revenue, accounting for 33% and 17-18% of FY24 revenue, respectively. Recent sales volume recovery from these customers is expected to drive revenue growth [7][13]. - Tesla's global deliveries in 1Q25 decreased by 13% year-on-year, but recovery is noted since April 2025, with weekly retail sales volume increasing to approximately 9,000 units [7][23]. Valuation - The report maintains a price target of Rmb56, applying a sum-of-the-parts (SOTP) valuation method, with a 40x P/E for robotic parts and a 20x P/E for auto parts [14][42]. - The current valuation reflects an attractive entry point post recent share price corrections, trading at 18x 2026E P/E [10][12]. Market Trends - The report highlights a sequential recovery in sales volume for Tuopu, particularly in 2Q25, with expected revenue growth of approximately 15% year-on-year and 30% quarter-on-quarter from a low base in 1Q25 [10][12]. - The anticipated launch of Tesla's Robotaxi and updates on Tesla's AI Day are seen as near-term catalysts that could further enhance Tuopu's market position [9][10].