Investment 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].

Core Viewpoint - Tesla is preparing to launch its robotaxi services imminently, with a specific date set for June 12, which has generated significant investor interest and a stock price increase of approximately 23% last month despite a weak earnings report for Q1 2025 [1][10]. Group 1: Tesla's Robotaxi Launch - The robotaxi service will initially deploy about 10 Model Ys in Austin, with plans to scale up to 1,000 vehicles in the following months, although the service will be geo-fenced to avoid unsafe areas [8][10]. - CEO Elon Musk confirmed successful testing of a Model Y without a driver on public streets, indicating progress towards fully autonomous rides [7][8]. - The company aims to revolutionize mobility by offering cheaper rides without drivers, similar to Uber and Lyft, but at a lower cost [3]. Group 2: Cathie Wood's Position - Cathie Wood's ARK Innovation ETF sold around 50,000 Tesla shares worth approximately $17 million, but Tesla remains the top holding in the fund, with a price target of $2,600 by 2029 [2][3]. - The sale is interpreted as a strategic move to "sell high, buy low," allowing the fund to book gains while maintaining a long-term bullish outlook on Tesla's future [4][10]. Group 3: Competitive Landscape - Tesla is entering the robotaxi market later than competitors like Alphabet's Waymo, which currently dominates the U.S. market with over 250,000 paid rides per week and significant investments planned [9][10]. - Waymo has already established commercial services in four U.S. cities and has partnered with Uber to expand its reach, posing a competitive threat to Tesla's ambitions [9]. Group 4: Tesla's Core Business Challenges - Tesla's core EV sales are declining, with a reported 15% year-over-year drop in China sales and the weakest quarterly deliveries in over two years [12][13]. - The company faces increasing competition from both legacy automakers and new entrants in the EV market, compounded by reputational issues stemming from CEO Elon Musk's political controversies [13]. Group 5: Valuation Concerns - Tesla's stock is trading at a forward price-to-sales ratio of 10.23, significantly higher than the industry average of 2.75, indicating that much of the current valuation is based on optimistic projections regarding its robotaxi business [15][17]. - Analysts suggest that the market is pricing in significant breakthroughs in unproven areas like autonomous driving, which may take years to materialize [15][17].