Company and Industry Overview - The company is a leading global player in refrigeration control components and automotive thermal management systems, with products including electronic expansion valves, solenoid valves, and integrated components for thermal management in new energy vehicles. The business and production capacity are highly globalized, with overseas revenue expected to account for 44.7% in 2024 [2] - The global market for bionic robot electromechanical actuators is projected to grow from 0.01 billion in 2020 to 1.376 billion by 2024, with a CAGR of 95.7%. It is expected to reach approximately 62.8 billion by 2029, with a CAGR of 114.7% from 2024 to 2029 [2] - The global market for refrigeration and air conditioning control components is steadily growing, with an overall compound growth rate of about 7%. Valves and heat exchangers are the main contributors to this growth [2] - The global automotive thermal management system components market is expanding, primarily driven by new energy vehicle thermal management components, with a projected CAGR of 26.6% from 2024 to 2029 [2] Key Assumptions - Revenue from the automotive components business is expected to grow by 9.0%, 8.0%, and 7.5% year-on-year from 2025E to 2027E, driven by increased penetration of thermal management systems in new energy vehicles and platform customer growth [3] - Revenue from the air conditioning and refrigeration components business is anticipated to grow by 24.0%, 22.0%, and 20.0% year-on-year from 2025E to 2027E, supported by a recovery in global appliance demand [3] - The gross margin for the automotive components business is expected to remain stable, with projections of 27.8%, 27.7%, and 27.8% from 2025E to 2027E, driven by the increasing share of new energy-related products and product complexity [3] - The gross margin for the air conditioning and refrigeration components business is expected to be relatively stable, with projections of 27.9%, 28.2%, and 28.3% from 2025E to 2027E, benefiting from product structure upgrades and economies of scale [3] - The company is expected to have significant growth potential and profit elasticity in the automotive components business compared to traditional home appliance businesses, driven by the penetration of new energy vehicles and platform customer growth [3] - The company possesses technological and scale advantages in the high-reliability electromechanical actuator field, providing potential for expansion into the robotics sector, with long-term growth opportunities not yet fully priced in [3]

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [6]. Core Insights - The company is a leading global player in thermal management solutions and is expanding its robotics business, which presents new growth opportunities [6]. - Revenue projections for 2025E, 2026E, and 2027E are estimated at 329.46 billion, 384.57 billion, and 444.73 billion RMB, respectively, with year-on-year growth rates of 17.9%, 16.7%, and 15.6% [6]. - The company is expected to achieve net profits of 42.41 billion, 48.53 billion, and 56.69 billion RMB for the same years, reflecting year-on-year growth of 36.8%, 14.4%, and 16.8% [6]. Company and Industry Overview - The company is a leading manufacturer of refrigeration control components and automotive thermal management systems, with a product range that includes electronic expansion valves, solenoid valves, and integrated components for new energy vehicles. Its operations are highly globalized, with overseas revenue accounting for 44.7% in 2024 [6]. - The global market for bionic robot electromechanical actuators is projected to grow from 0.01 billion RMB in 2020 to 13.76 billion RMB by 2024, with a CAGR of 95.7%. It is expected to reach approximately 628 billion RMB by 2029, with a CAGR of 114.7% from 2024 to 2029 [6]. - The global market for refrigeration and air conditioning control components is steadily growing, with an overall compound annual growth rate (CAGR) of about 7%, driven mainly by valves and heat exchangers [6]. - The automotive thermal management system components market is expanding, primarily driven by new energy vehicle thermal management components, with a projected CAGR of 26.6% from 2024 to 2029E [6]. Financial Data and Profitability Forecast - The company’s total revenue is forecasted to grow from 24,558 million RMB in 2023 to 32,946 million RMB in 2025, with a year-on-year growth rate of 17.9% [5]. - The gross profit margin is expected to remain stable, with projections of 27.9% for 2025E, 28.0% for 2026E, and 28.1% for 2027E [6]. - Return on equity (ROE) is projected to be 17.7% in 2025E, 16.8% in 2026E, and 16.4% in 2027E [6].

Investment Rating - The investment rating for the company is "Buy" with a target price not specified [6] Core Views - The company has shown stable revenue performance with a year-on-year increase in revenue of 4.1% for the first three quarters of 2025, reaching 9.72 billion yuan, and a net profit increase of 18.5% to 770 million yuan [1] - The company is focusing on expanding its automotive thermal management business, which is expected to continue its growth trend [2] - The gross margin has improved to 19.3%, reversing the downward trend observed in the first half of the year, with a net profit margin of 7.8% [3] - The company is positioned as a leader in the refrigeration components sector, with ongoing structural upgrades in its home appliance business and a focus on high-growth areas such as new energy vehicle thermal management [4] Financial Summary - For 2025, the company is projected to achieve a net profit of 1.08 billion yuan, with corresponding dynamic P/E ratios of 13.9x, 11.8x, and 10.2x for the years 2025, 2026, and 2027 respectively [4] - The revenue forecast for the years 2025 to 2027 is 13.47 billion yuan, 15.29 billion yuan, and 17.33 billion yuan, with growth rates of 6.26%, 13.50%, and 13.37% respectively [5] - The company’s net profit is expected to grow from 1.08 billion yuan in 2025 to 1.47 billion yuan in 2027, reflecting a growth rate of 16.13% [5]

Summary of Conference Call on Su Lian Co., Ltd. and UQD Market Company and Industry Overview - The conference call discusses Su Lian Co., Ltd. and the server liquid cooling UQD (Quick Connect Disconnector) market, which is projected to reach a market size of 20 billion RMB, with potential for even higher growth [2][4]. Core Insights and Arguments - The UQD market is expected to account for approximately 10% of the total server liquid cooling market value, translating to around 20 billion RMB by 2030 [4]. - Compared to the automotive thermal management market, the UQD market could potentially reach half the size of the global automotive thermal management piping and connector market [2][4]. - UQD technology has high barriers to entry, requiring strict no-leak technology, optimized flow rates, pressure drop management, and intuitive visual identification and automatic connection features [5]. - Domestic companies are rapidly developing in the server liquid cooling UQD sector, but the competitive landscape is still forming, with no long-established players like Parker Hannifin or Stäubli [6]. Su Lian Co., Ltd. Advantages - Su Lian Co., Ltd. has a strong foundation in the nylon piping market and extensive customer relationships, particularly in the new energy vehicle thermal management sector [2][7]. - The company has developed capabilities in injection mold design and product testing, which are crucial for entering the server liquid cooling UQD market [7]. - Su Lian Co., Ltd. has a comprehensive customer base in the new energy vehicle sector, including major players like Changan, BYD, and CATL, providing solutions across battery packs, chassis, motors, and air conditioning [8]. Upstream Industry Chain Development - The company has enhanced its precision mold processing and equipment design capabilities, which significantly benefit high-end new energy vehicles and complex server liquid cooling systems [9]. Recent Developments - Su Lian Co., Ltd. has established a subsidiary, Su Lian Intelligent Control, to expand into the intelligent computing market, aiming for multiple growth trajectories beyond the UQD market [3][10]. Market Outlook and Risks - The liquid cooling industry presents numerous opportunities, especially for companies transitioning from new energy vehicle thermal management systems [11]. - Risks include the potential underperformance of UQD development and significant increases in raw material prices [11].

Investment Rating - The investment rating for the company is "Buy" with a target price not specified [5] Core Views - The company has shown continuous improvement in profitability despite challenges in its equipment business, which has been a drag on growth [1][2] - The cooling component revenue reached 5.41 billion yuan in H1 2025, up 8.8% year-on-year, while the equipment business revenue fell to 480 million yuan, down 31.4% [2] - The company is positioned as a leader in the refrigeration component sector, with ongoing structural upgrades in its home appliance business and expansion into the high-growth new energy vehicle thermal management sector [3] Financial Performance Summary - In H1 2025, the company achieved operating revenue of 6.73 billion yuan, a year-on-year increase of 6.1%, and a net profit attributable to the parent company of 540 million yuan, up 12.9% [1] - The gross margin for H1 2025 was 17.3%, slightly down by 0.7 percentage points year-on-year, but improved to 18.3% in Q2 2025 [2] - The company expects net profits for 2025, 2026, and 2027 to be 1.12 billion yuan, 1.31 billion yuan, and 1.54 billion yuan respectively, with corresponding dynamic P/E ratios of 12.6x, 10.8x, and 9.2x [3] Market Position and Growth Prospects - The company is leveraging opportunities in the secondary supply chain and is gradually establishing a new growth curve [3] - The domestic central air conditioning market saw a decline of 15.9% in H1 2025, impacting the equipment business, which has a longer cycle and fluctuating revenue recognition [2] - The company has optimized its expense ratios, with sales, management, R&D, and financial expense ratios showing improvements in Q2 2025 [2]

Investment Rating - The investment rating for the company is "Buy" with a target price not specified [4][3]. Core Views - The company reported a revenue of 3.021 billion yuan in Q1 2025, representing a year-on-year increase of 15.05%, and a net profit attributable to shareholders of 218 million yuan, up 4.34% year-on-year [1]. - The automotive parts business is expected to maintain high double-digit growth, supported by a favorable production schedule in the air conditioning sector [2]. - The company is positioned as a leader in the refrigeration components sector, with ongoing structural upgrades in its home appliance business and improvements in profitability [3]. Summary by Sections Financial Performance - In Q1 2025, the gross margin was 16.1%, down 1.4 percentage points year-on-year, attributed to a decline in high-margin equipment business and raw material costs [2]. - The net profit margin for Q1 2025 decreased by 0.7 percentage points to 7.2% [2]. Business Segments - The automotive valve market is entering an expansion phase, driven by new strategies from companies like BYD, which is expected to create significant demand for valve components [2]. - The company’s dual business segments are performing well, with projected net profits of 1.19 billion, 1.38 billion, and 1.57 billion yuan for 2025, 2026, and 2027 respectively [3]. Market Outlook - The overall production schedule for air conditioning is expected to show double-digit growth, which will support the company's revenue in the second quarter [2]. - The company is leveraging opportunities in the high-growth new energy vehicle thermal management sector [3].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 38.22 CNY [5]. Core Views - The company is expected to see improvements in its automotive parts business margins and is focusing on advancements in its robotics business [1]. - The revenue, gross margin, and expense ratios have been adjusted, with new profit forecasts for 2025-2027 indicating net profits of 3.666 billion, 4.246 billion, and 4.748 billion CNY respectively [2]. Financial Summary - **Revenue Forecasts**: - 2023: 24,558 million CNY - 2024: 27,947 million CNY (up 13.8% YoY) - 2025: 34,640 million CNY (up 23.9% YoY) - 2026: 39,396 million CNY (up 13.7% YoY) - 2027: 43,972 million CNY (up 11.6% YoY) [4][10] - **Profitability Metrics**: - Gross Margin: 27.6% in 2023, expected to remain stable through 2027 - Net Profit Margin: 11.9% in 2023, projected to decline slightly to 10.6% by 2025 [4][10] - **Earnings Per Share (EPS)**: - 2023: 0.78 CNY - 2024: 0.83 CNY - 2025: 0.98 CNY - 2026: 1.14 CNY - 2027: 1.27 CNY [4][10] - **Valuation Ratios**: - Price-to-Earnings (PE) Ratio: Expected to decrease from 37.9 in 2023 to 23.3 in 2027 - Price-to-Book (PB) Ratio: Expected to decrease from 6.2 in 2023 to 4.1 in 2027 [4][10] Business Segments - **Automotive Parts Business**: - Revenue of 113.87 billion CNY in 2024, up 14.9% YoY, with a gross margin of 27.64% [10]. - **Refrigeration and Air Conditioning Business**: - Revenue of 165.61 billion CNY in 2024, up 13.1% YoY, with a gross margin of 27.35% [10]. - **Robotics Business**: - The company is nearing mass production of humanoid robots, which is expected to open new growth opportunities [10].