Investment Rating - The report assigns an "Accumulate-A" rating for the company, marking its first coverage [1][7]. Core Insights - The company has established itself as a leading player in the linear drive industry, with over 20 years of experience and a strong market position. It is expanding into robotics, which presents new growth opportunities [4][6]. - The demand for linear drive products is expected to grow significantly due to the increasing application in various sectors such as smart homes, healthcare, and industrial automation [5][46]. - The company is well-positioned to benefit from the global trend towards automation and smart technology, with a projected compound annual growth rate (CAGR) of 8.34% for the linear drive market from 2023 to 2027 [46][67]. Summary by Sections Company Overview - The company has been deeply involved in the linear drive sector for over 20 years, holding a solid position as an industry leader. It was founded in 2000 and went public in 2018. The company has developed a diverse product range and has established subsidiaries in various regions [4][18]. - The management team is experienced, with a concentrated ownership structure that supports stability and strategic direction [10][29]. Financial Analysis - The company has shown consistent revenue growth, with a compound annual growth rate of 26.75% from 2017 to 2024. In 2024, the revenue reached 3.652 billion yuan, a year-on-year increase of 20.4% [8][32]. - The net profit for 2024 was 282 million yuan, reflecting a significant recovery with a year-on-year growth of 36.9% [8][32]. Market Demand - The linear drive market is expanding across various applications, including smart offices, healthcare, and smart homes. The global market for linear drive products is projected to reach 75.3 billion yuan by 2027 [46][67]. - The smart office segment is expected to grow due to increasing health awareness among workers, with the market for linear drive products in this area projected to reach 321 billion yuan by 2027 [55][58]. Growth Opportunities - The company is actively investing in robotics, having established a joint venture focused on developing robotic components, which is anticipated to open new growth avenues [6][4]. - The aging population and the demand for smart healthcare solutions are expected to drive the need for linear drive systems in medical devices, with a projected market size of 27.9 billion yuan by 2027 [59][67].

Summary of the Conference Call for Jiechang Drive Company Overview - Jiechang Drive reported a record revenue of over 900 million in Q1 2025, with profits exceeding 100 million, maintaining the growth trend from Q4 2024. The net profit margin is approximately 15.6% [2][3] - The company expects total revenue for 2025 to exceed 4 billion, with net profits projected between 450 million to 500 million [2][3] Business Segment Performance - **Office Business**: Expected revenue of approximately 2.4 billion in 2024, a year-on-year growth of 25% [2][4] - **Medical Business**: Projected revenue of around 400 million, with a 10% year-on-year increase [2][4] - **Smart Home Business**: Anticipated revenue of about 200 million, showing a 50% growth [2][4] - **Industrial Business**: Close to 50% growth expected [2][4] - **Automotive Sector**: Monthly sales have surpassed 10 million [2] Strategic Initiatives - The company has formed a joint venture with Lingqiao Intelligent to establish Zhejiang Lingjie Robotics, holding a 47% stake, focusing on key components like dexterous hands and drive modules [2][5] - Plans to establish a robotics actuator business center focusing on linear actuators, rotary modules, and hollow cup motors [2][5] Market Expansion and Trade Impact - Jiechang Drive is expanding into Southeast Asia to mitigate the impacts of the North American trade war, with controllable tariff effects. 90% of goods are shipped directly from Malaysia, with tariffs borne by customers [2][6][9] - The company anticipates a recovery in the U.S. market, with some improvement noted in Q1 compared to the previous year [2][6] Financial Outlook - Overall performance is expected to improve in 2025, with revenue exceeding 4 billion and net profit between 450 million to 500 million [2][7] - Specific growth expectations for 2025 include 10%-15% for the office segment, around 10% for the medical segment, and approximately 50% for other segments [2][8] Challenges and Risk Management - The company is addressing losses from its European operations (AIGAN) by reducing operational losses and improving financial conditions. A new factory is set to start production in May, with cost reductions expected [2][8] - The impact of tariffs on exports from Malaysia to the U.S. is manageable, with plans to negotiate price adjustments if tariffs persist [2][9] Robotics Division Developments - The robotics division is a key focus for future growth, with ongoing developments in dexterous hands and linear actuators. The company is preparing for market entry with low-cost solutions [2][11][24] - The robotics division is not expected to contribute significantly to revenue in the short term but is seen as a long-term growth driver [2][24][25] Conclusion - Jiechang Drive's overall business performance is on an upward trajectory, with a strong outlook for the next two years, aiming for revenue growth to reach 5 billion by 2026. The strategic focus on robotics and market expansion positions the company well for future growth [2][25]