Summary of Moons' Electric (603728.SS) Conference Call Company Overview - **Company**: Moons' Electric (603728.SS) - **Industry**: China Industrial Technology & Machinery Key Points and Arguments 1. **Rating Downgrade**: Moons' Electric has been downgraded from Neutral to Sell with a target price of Rmb41.40, indicating a potential downside of 43.5% from the current price of Rmb73.26 [1] 2. **Market Share Revision**: The expected global market share for Moons' humanoid robot coreless motor product has been revised down from 43% to 23% by 2030E, reflecting a narrowed opportunity due to evolving dexterous hand technology [1][18] 3. **Earnings Forecast Adjustment**: Earnings forecasts for 2026-2030E have been lowered by 22%-38%, indicating a significant reduction in expected profitability [1][21] 4. **Competitive Landscape**: The market is expected to adjust its expectations downwards, particularly due to the upcoming launch of Tesla's Optimus Gen3, which is likely to adopt tendon-driven hands, and increased competition from new entrants in the coreless motor supply chain [1][31] 5. **Stock Performance**: Moons' Electric's stock price increased by 35% over the past year, attributed to competitive products and alignment with humanoid robot technology trends, but the current valuation implies unrealistic shipment expectations of 1.2 million units of robots in the next 12 months [1][35] Financial Data 1. **Revenue Projections**: - 2024: Rmb2,415.9 million - 2025E: Rmb2,764.9 million - 2026E: Rmb3,193.9 million - 2027E: Rmb3,612.6 million [3][14] 2. **Earnings Per Share (EPS)**: - 2025E: Rmb0.22 - 2026E: Rmb0.47 - 2027E: Rmb0.70 [3][21] 3. **Valuation Ratios**: - P/E Ratio for 2026E: 154.9 - P/B Ratio for 2026E: 9.7 [3][9] Industry Dynamics 1. **Dexterous Hand Technology**: The industry is witnessing a coexistence of various dexterous hand technologies, including fully actuated direct-driven hands, tendon-driven hands, and under-actuated linkage hands, which are impacting the market for coreless motors [1][30][33] 2. **Supply Chain Competition**: Increasing competition from domestic automation companies entering the dexhand supply chain is intensifying the market landscape, with several companies already in product verification stages [1][31][34] 3. **Market Share Expectations**: The forecast for Moons' coreless motor market share has been adjusted to 25% for high-spec, 20% for mid-spec, and 20% for low-spec humanoid robots from previous estimates of 50%/33%/33% [1][27] Risks and Upside Potential 1. **Risks**: A slower-than-expected timeline for humanoid robot shipments and intensified competition could pose significant risks to Moons' Electric's market position [1][38] 2. **Upside Potential**: Positive developments in humanoid robot applications or faster-than-expected progress in robotic AI could lead to upside in estimates and market share [1][40][44] Conclusion Moons' Electric is facing significant challenges due to evolving technology and increased competition in the humanoid robot market. The downgrade in rating and revised earnings forecasts reflect a cautious outlook for the company's future performance in this rapidly changing industry.