Summary of the Conference Call for Dayang Motor Company Overview - Dayang Motor is a leading enterprise in the global building ventilation and home appliance motor sector, comparable to Wolong Electric Drive in HVAC motors [3][4] - The company has achieved a compound annual growth rate (CAGR) of over 70% in recent years, with overseas revenue accounting for nearly 50% [3] Core Business Segments 1. **Traditional Building and Home Appliance Motors**: - Revenue contribution exceeds 60%, serving major domestic and international HVAC players like Gree, Midea, Haier, and Daikin [4] 2. **Automotive-related Motors**: - Comprises both new energy vehicles (NEVs) and traditional fuel vehicles, with NEVs accounting for over 10% of revenue [5] 3. **Hydrogen Fuel Cell Business**: - Currently has a low revenue contribution, focusing on hydrogen fuel cell engines and core components [5] Key Insights and Arguments - The traditional building and home appliance motor business is expected to provide stable cash flow, supporting the growth of the NEV segment, which is projected to reach profitability by 2025 [2][9] - The company aims for a revenue of 1.4 billion yuan in 2026, corresponding to a valuation of less than 20 times earnings [2][17] - Global NEV penetration is increasing, with the market size exceeding 150 billion yuan, and China accounting for approximately 70%-80% of this market [6] - Dayang Motor's gross margin improved to 16% in the first half of 2024, indicating operational efficiency [8] Global Expansion and Market Position - By the first half of 2025, 50% of Dayang Motor's revenue is expected to come from overseas markets, with new factories being established in Thailand, Morocco, and the USA [2][5] - The company has a leading position in both domestic and North American markets, with major clients including well-known brands [10] Research and Development - Dayang Motor has increased R&D investment and digital transformation efforts since 2020, launching eight employee incentive programs to strengthen core team alignment with long-term strategies [5] - The company is collaborating with Tongji University on humanoid robot technology and has invested in Mech-Mind Technology to enhance its capabilities in this area [12] Future Growth Potential - The traditional business is expected to grow at a steady rate of 10%-15%, while the NEV segment is projected to grow at 20%-25% over the next three years [15][16] - The company anticipates an overall revenue CAGR of 10%-15% in the coming years, driven by increased overseas revenue and high-efficiency smart motor products [16] Risks - Key risks include international trade and geopolitical uncertainties, fluctuations in downstream industry demand, and potential underperformance in new business and technology developments [18] Investment Recommendation - The company is rated as a "buy" with a target market capitalization of 42 billion yuan based on a 30 times PE ratio for 2026, indicating over 50% upside potential from the current market cap of 28 billion yuan [3][17]

Financial Performance - In the first half of 2025, the total assets of the company reached 19.906 billion CNY, an increase of 3.08% compared to the beginning of the period [2] - Total operating revenue was 15.338 billion CNY, a year-on-year increase of 8.59% [2] - Net profit attributable to shareholders was 310 million CNY, up 7.27% year-on-year [2] - Net cash flow from operating activities was 686 million CNY, a significant increase of 602.45% [2] Gas Supply and Market Position - In the first half of 2025, the company supplied 2.131 billion cubic meters of natural gas, with industrial and commercial users accounting for approximately 81.29% [3] - The gross profit from urban gas business was 666 million CNY, an increase of 2.1% year-on-year, with a gross profit margin of 10.12% [3] - The company has established a robust customer structure primarily focused on industrial and commercial sectors, benefiting from the industrial scale of Foshan [2] Supply Chain and Revenue Growth - The supply chain business achieved operating revenue of 8.282 billion CNY in the first half of 2025, a year-on-year growth of 22.66%, accounting for 54% of total revenue [9] - The company has diversified its supply chain operations to include various products such as refined oil, fuel oil, and biodiesel [9] SOFC Development - The company has formed a specialized R&D team for SOFC (Solid Oxide Fuel Cell) technology, currently developing a 50kW SOFC system prototype [10] - The company aims to apply SOFC technology in various scenarios, including data centers and waste treatment facilities [12] Dividend Policy - Since its listing in November 2017, the company has maintained a stable dividend level, with cumulative cash dividends amounting to 3.088 billion CNY, averaging over 65% of net profit attributable to shareholders [7] - In 2024, the total cash dividend was 623 million CNY, accounting for 73% of net profit [8] Future Investments and Strategic Initiatives - The company plans to adopt a more cautious investment strategy in the coming years, focusing on sustainable returns for shareholders [7] - The company is investing in green methanol production, with a total planned investment of 10 billion CNY to establish production bases with a combined capacity of 1 million tons per year [13][14]

Core Insights - Company reported strong financial performance for the first half of 2025, with revenue of 1.822 billion yuan, a year-on-year increase of 23.21%, and net profit of approximately 51.22 million yuan, a significant increase of 187.23% [1] - The company is focusing on core business areas while investing in technology innovation, particularly in solid-state and semi-solid batteries, and has established partnerships for hydrogen production materials [1][4] Business Segments Performance - The HEV power battery segment saw substantial growth, with sales of foam nickel reaching 1.3484 million square meters, a 41% increase, and revenue of approximately 118 million yuan, up 30% [2] - Lithium resource development has been integrated into a "mining-selection-smelting" model, with total lithium resource reserves of 12 million tons, equivalent to 400,000 tons of lithium carbonate [2] - The consumer battery segment also experienced rapid growth, achieving sales revenue of 542 million yuan, a 28% increase, with products certified by national standards [2] Independent Energy Storage Development - The company is accelerating the development of independent energy storage stations, with 90 projects connected to the grid in the first five months of 2025, representing a 95% increase in quantity and a 107% increase in capacity year-on-year [3] - Successful projects include the Hebei Jingxing 200MW/400MWh and Hebei Wangdu 100MW/200MWh independent energy storage stations, which have exceeded investment return expectations [3] - The company plans to complete the construction and grid connection of no less than 4GWh of energy storage projects by the end of 2025 [3] Technological Advancements - The company has made significant progress in dry electrode technology and is collaborating with various research institutions to advance solid-state battery materials and processes [4] - The company aims to achieve market application of semi-solid battery products by the end of 2025 to 2026, driven by demand from independent energy storage stations [4] - The introduction of three-dimensional porous foam copper-manganese alloy for SOFC applications marks a step towards domestic production of key components, with samples sent to multiple clients [4]