MOONS’(SH:603728) Changjiang Securities·2024-02-24 16:00Investment Rating - The report assigns a "Buy" rating for Mingzhi Electric (603728.SH) for the first time [5]. Core Viewpoints - Mingzhi Electric has successfully broken the Japanese monopoly in the hybrid stepper motor market, with its HB stepper motor production reaching approximately 18 million units in 2022, ranking among the top three globally in terms of sales volume and revenue [5][21]. - The company is expanding its product range beyond stepper motors, including brushless motors, hollow cup motors, servos, and linear drives, which are increasingly applied in high-end emerging sectors such as mobile robotics, medical devices, and smart automotive electronics [5][41]. - The hollow cup motor market is expected to grow significantly, driven by the increasing demand for humanoid robots, with the global market size currently in the tens of billions [6][47]. Summary by Sections Stepper Motors as the Foundation - Mingzhi Electric has established itself as a leading manufacturer of stepper motors in China, with a significant market share and production capacity [21][29]. - The company has made substantial investments in new production facilities, including a major base in Taicang, which is expected to enhance operational efficiency [5][29]. Breaking the Japanese Monopoly - The company has achieved a notable position in the HB stepper motor market, moving from fourth place in 2015 to third place globally by 2022, demonstrating its competitive strength [21][23]. - The technological advancements and scale of production have positioned Mingzhi Electric as a key player in the industry [21][29]. Product Diversification and Growth - The diversification of product offerings is crucial for the company's growth, as it mitigates the limitations of relying on a single product line [5][37]. - The company has seen significant revenue growth in its new product lines, with annual compound growth rates of approximately 67% for brushless motors and 82% for servo systems from 2020 to 2022 [5][41]. Humanoid Robots and Hollow Cup Motors - The humanoid robot market is anticipated to expand, with the hollow cup motor being a critical component, potentially doubling the market size if production reaches one million units [6][47]. - The company has positioned itself well in this emerging market, leveraging its technological capabilities and established client relationships [6][47]. Financial Performance and Projections - The report projects that Mingzhi Electric will achieve net profits of 174 million, 291 million, and 397 million yuan for the years 2023, 2024, and 2025, respectively, with corresponding price-to-earnings ratios of 94x, 57x, and 41x [6].