Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Insights - The company is a global leader in automotive micro-motors and systems, with a complete global manufacturing system and stable Tier 1 customer resources. Revenue projections for 2026E-2028E are $3.816 billion, $4.100 billion, and $4.634 billion, respectively, with corresponding net profits of $271 million, $297 million, and $339 million. The company’s valuation shows significant attractiveness compared to A-share and global peers [7]. Summary by Sections 1. Global Leading Micro-Motor Manufacturer - The company has evolved through three stages since its establishment in 1959, transitioning from toy micro-motors to automotive electric motors and expanding into various fields through acquisitions [18]. 2. Main Business: APG Growth Amid Electrification - The company’s automotive product group (APG) is expected to see volume and price increases due to the transition from fuel vehicles to electric vehicles. The average number of motors in electric vehicles is approximately 17 times that of fuel vehicles, leading to a significant increase in single-vehicle value [8][51]. 3. Key Assumptions - The company’s APG business is projected to benefit from the growth in electric vehicle production, with global electric vehicle output expected to rise from 24.9 million units in 2024 to 40.2 million units in 2028, reflecting a CAGR of 12.7% [8]. - The humanoid robot business is anticipated to become a core supplier for domestic and international manufacturers, leveraging its global manufacturing layout and system-level motor technology [8]. - The AI data center liquid cooling pump business is expected to benefit from the growing demand for cooling efficiency, with the market projected to grow from $2 billion in 2024 to $72.89 billion by 2030 [8]. 4. Financial Forecast and Valuation - The company’s projected revenues and net profits for 2026E-2028E are $3.816 billion, $4.100 billion, and $4.634 billion, and $271 million, $297 million, and $339 million, respectively. The corresponding P/E ratios are 15.2, 13.9, and 12.2 [10][12]. 5. Market Perception - Contrary to common perceptions that the company’s growth is constrained by the automotive cycle, the report highlights the company’s capabilities in high-precision motors and fluid control systems, which provide a strong foundation for growth in emerging sectors [11]. 6. Revenue Structure and Growth - The company’s revenue structure is increasingly concentrated in the automotive sector, with APG expected to account for 84% of total revenue by 2025. The company’s global customer base includes major automotive manufacturers and high-end brands across various industries [20][33]. 7. Electric Vehicle Market Dynamics - The report indicates that the global automotive industry is transitioning from quantity growth to structural optimization, with electric vehicles becoming the primary source of growth. The penetration rate of electric vehicles is expected to rise significantly, driving revenue growth for the company [55][56]. 8. Single Vehicle Value Enhancement - The average single vehicle value for electric vehicles is projected to be significantly higher than that of fuel vehicles, with estimates of $326.5 for electric vehicles compared to $217.6 for fuel vehicles [56].

Core Viewpoint - Kin Yat, a leading OEM manufacturer for IROBOT, is experiencing robust growth driven by strong shipment increases and expansion into new markets, particularly in China, Japan, and EMEA [1][2]. Group 1: Company Overview - Kin Yat is the largest supplier to IROBOT, accounting for 70% of its shipments, with IROBOT contributing approximately 50% to Kin Yat's total revenue in the first half of 2018 [1]. - The company has a long-term OEM relationship with IROBOT, which has been established for over 10 years [1]. Group 2: Growth Drivers - Shipment growth is expected to be strong compared to 2.9 million units in FY16, with China being a major growth driver following the opening of a sales office in 3Q16 [2]. - IROBOT plans to launch a new lawn mower product in 2018, which is anticipated to further drive growth for Kin Yat as it co-develops the product [2]. - Kin Yat's Shenzhen plant has a production capacity of 2.5 million units, with a new plant in Guizhou expected to add 2.4 million units of capacity [2]. Group 3: Micro-Motor Segment - The micro-motor segment grew by 20% in the first half of 2018, primarily due to new client orders in the automotive sector, which accounts for 30% of micro-motor sales [3]. - Key clients in the automotive segment include Hyundai, Kia, Subaru, Mitsubishi, and BMW [3]. - Management aims to increase production capacity from 850,000 units per day to 2 million units per day by 2020, anticipating further margin expansion [3]. Group 4: Land Valuation - The company owns three pieces of land in Guangdong province, with the Shenzhen land valued at over RMB 2 billion and the Shaoguan land valued at RMB 75 million [4]. - There are plans to potentially move the plant to Guizhou to free up land for sale in the medium term [4]. - The Shixing land, covering 300 mu, is likely to be co-developed with property developers in the future [4]. Group 5: Valuation and Dividend Policy - Kin Yat is currently trading at a valuation of 5.8x FY18 PE and 4x FY19 PE, which is considered undemanding [5]. - The company has a 30% payout dividend policy, yielding about 5%, with future growth expected from increased micro-motor capacity and IROBOT product sales [5]. - Any potential land sales could provide opportunities for special dividends [5].

Core Viewpoint - Jiangsu Leili is undergoing a significant leadership transition as its actual controller Su Jianguo transfers a majority stake to his son Su Da, marking a new era for the company that has evolved into a leading provider of micro-motor modular solutions in China since its establishment in 1993 [1] Group 1: Leadership Transition - Su Da has been groomed for nearly 20 years within the company, starting from grassroots positions and moving up to key management roles, including General Manager since September 2023 [1] - The transition of control from Su Jianguo to both Su Jianguo and Su Da indicates a planned succession strategy rather than an abrupt change [1] Group 2: Business Growth and Strategic Transformation - Jiangsu Leili has successfully transformed its strategy while maintaining steady growth in traditional home appliance businesses, entering high-growth sectors such as smart driving for new energy vehicles, energy storage, and humanoid robots [2] - The company's revenue has increased from 1.456 billion yuan in 2015 to 3.519 billion yuan in 2024, showcasing significant growth [2] - In the new energy vehicle sector, Jiangsu Leili focuses on smart driving and intelligent cockpit technologies, leading to successful mass production of laser radar motor products for clients like TuDatong, Hesai, BYD, and Sutech [2] Group 3: Product Development and Market Position - The company has developed leading products in the energy storage sector, including second-generation brushless AC electronic water pumps and electronic fans, achieving a leading market share domestically [2] - Jiangsu Leili is one of the few domestic companies with UL certification, enabling its products to be exported to North America [2] - In the humanoid robot sector, the company has expanded its product line through subsidiaries and partnerships, enhancing its offerings in linear joints, rotary joints, and dexterous hands [3] Group 4: Global Expansion and Future Outlook - Jiangsu Leili is enhancing its competitiveness through global expansion, establishing R&D and manufacturing bases in North America, Europe, Southeast Asia, South Korea, and Hong Kong [3] - The completion of the Vietnam factory expansion in 2024 and the new factory in Mexico set to begin production in 2025 will ensure supply stability for North American clients [3] - The company is positioned for a new growth cycle as it transitions from a family-owned business to a multi-domain motion control system integrator under new leadership [3]