Core Viewpoint - The company Wuzhou Xinchun plans to raise up to 1 billion yuan through a private placement, with 700 million yuan allocated for the development and industrialization of humanoid robots and core components for intelligent vehicles, and 300 million yuan for working capital [2] Investment Project Summary - The total investment for the current fundraising project is 1.055 billion yuan, with 721 million yuan earmarked for equipment procurement, primarily for production lines of planetary roller screws, micro ball screws, and general-purpose robot bearings [4][6] - The project aims to produce 980,000 sets of planetary roller screws, 2.1 million sets of micro ball screws, and 70,000 sets of general-purpose robot bearings, which can support the production of 70,000 humanoid robots [4][7] Market Demand and Clientele - The market demand for the company's products is driven by the growth in the humanoid robot and intelligent vehicle sectors, with a projected market share of approximately 3.9% by 2030 based on global humanoid robot sales reaching 2.05 million units [7] - The company has established connections with notable clients in the humanoid robot and intelligent vehicle industries, including ByteDance and Changan Automobile Group, and has received orders for components from these clients [7][8] Revenue and Orders - Initial revenues from the current fundraising project have been recorded, with screw products generating 6.13 million yuan in 2024 and 2.7 million yuan in the first half of 2025 [8] - The company notes that current order amounts are small due to the early stage of the humanoid robot industry, but anticipates significant demand as the market matures [8]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [5] Core Views - The company achieved a year-on-year increase of 26% in net profit attributable to shareholders for Q1-Q3 2025, supported by the issuance of convertible bonds to enhance cash flow [5][6] - The company is focusing on advanced projects such as oil-gas springs, autonomous driving systems, and humanoid robot lead screws, indicating a strong potential for growth in emerging markets [6] - The issuance of targeted convertible bonds aims to improve cash flow and support long-term development, with a net fundraising amount of approximately RMB 148.22 million [6] Financial Performance Summary - For 2025, the company expects revenue of RMB 779 million, a year-on-year growth of 23.87%, and net profit of RMB 141 million, a year-on-year growth of 29.57% [5][7] - The company's earnings per share (EPS) is projected to be RMB 1.19 for 2025, with a return on equity (ROE) of 21.56% [5][7] - The company’s total market capitalization is approximately RMB 5.97 billion, with a circulating market value of about RMB 3.29 billion [3][5]

Core Insights - A company in Hangzhou has improved the lifespan of humanoid robot lead screws to a usable level through cold heading technology, potentially reducing costs to a feasible range [1] - The industry is facing challenges with the precision and lifespan of lead screws used in humanoid robots, leading some companies to consider alternative designs [4][5] Group 1: Technology and Manufacturing - The reverse planetary ball screw structure is complex, requiring compact design and high precision, with most humanoid robots needing P5 precision, which corresponds to an ISO standard of C5 [2] - Cold heading technology has been introduced for micro planetary roller screws, achieving C3 precision and significantly higher efficiency (5 minutes per screw) compared to traditional methods [5][10] - The cold heading process reduces material waste and improves production efficiency, making it a promising solution for lowering costs in the production of micro lead screws [8][10] Group 2: Company Overview - New Coordinates, established in 2002 and listed on the Shanghai Stock Exchange in 2017, is a leader in precision cold forging and has expanded its business into automotive and robotics sectors [5][11] - The company has a strong global presence, with manufacturing bases in Europe and North America, and has shown robust revenue growth, with a CAGR of 16.0% from 2020 to 2024 [11] - New Coordinates has developed proprietary equipment for internal thread rolling and hot forming, achieving a material utilization rate of 91%, significantly higher than the industry average [10]

Investment Highlights - The company is covered for the first time by CICC with an "outperform" rating and a target price of HKD 38.60, based on a P/E valuation method corresponding to FY2026 at 13x P/E [1] - The company is a leading player in the high-end CNC lathe market, with strong internal competitiveness [1] Business Performance - Established in 2003, the company is rooted in China's manufacturing sector, with a stable growth in its main business. The company is primarily focused on lathes (Swiss-type lathes) and supplemented by machining centers and grinding machines [1] - For FY2025 (Q2 2024 to Q1 2025), the company expects revenue of CNY 4.262 billion and a net profit attributable to shareholders of CNY 780 million, representing year-on-year growth of 36.6% and 63% respectively [1] Market Position and Expansion - The metal cutting machine tools are long-lasting general-purpose equipment, with demand influenced by capital expenditures in the automotive and general manufacturing sectors. The cumulative growth rate of metal cutting output in China from January to August 2025 is 14.6%, indicating a recovery in the industry [1] - The CNC machine tool market in China is projected to be CNY 71.5 billion in 2024, with the company holding a market share of 4.1% (by revenue), ranking first in the lathe market [1] - In March 2025, the company announced the construction of its sixth factory in Pinghu, which is expected to add approximately 3,000 units of assembly capacity per year [1] Profitability and Dividends - The company has shown significant growth in profitability, maintaining a dividend payout ratio of over 40% since FY2023, reflecting stable operational quality [2] New Growth Areas - Since 2024, the company has actively expanded into AI liquid cooling connector processing and humanoid robot components, such as lead screws and reducers [2] - The market has not fully recognized the incremental potential of liquid cooling and robotics, but the company remains optimistic about the opportunities these sectors present [2] Earnings Forecast and Valuation - The company forecasts EPS of CNY 2.6 and CNY 3.1 for FY2026 and FY2027 respectively, with a CAGR of 22%. The target price of HKD 38.60 corresponds to a P/E of 13x for FY2026, with current prices reflecting P/E ratios of 11x and 10x for FY2026 and FY2027 respectively, indicating a potential upside of 17.1% [2]

Group 1 - The core viewpoint of the report is that the company, Tsugami Machine Tool (01651), is expected to achieve an EPS of 2.6 and 3.1 CNY for FY2026/2027, with a CAGR of 22%, and a target price of 38.6 HKD, indicating a potential upside of 17.1% based on current P/E ratios [1] - The company has a strong foothold in China's manufacturing sector, with a product matrix primarily focused on screw machines and supplemented by machining centers and grinding machines. For FY2025, the company is projected to generate revenue of 4.262 billion CNY and a net profit of 780 million CNY, reflecting year-on-year growth of 36.6% and 63% respectively [2] - The company is actively expanding its production capacity to reinforce its leading position in the market. The metal cutting machine tool sector is influenced by capital expenditures in the automotive and general manufacturing industries. The production growth rate for metal cutting tools in China from January to August 2025 is 14.6%, indicating a recovery in the market [3] Group 2 - The company's profitability has significantly increased, maintaining a dividend payout ratio above 40% since FY2023, reflecting its strong operational quality [4] - The company is strategically investing in AI liquid cooling connectors and humanoid robot components, which are expected to drive its second growth phase. Potential catalysts include advancements in liquid cooling infrastructure and humanoid robot grinding machines [5]

Core Viewpoint - Zhejiang Zhaofeng Electromechanical Co., Ltd. held a conference call on August 29, 2025, with 25 institutions, discussing the company's operational performance and core competitiveness. Group 1: Operational Performance - In the first half of 2025, the company achieved revenue of approximately 344 million yuan, representing a year-on-year growth of 5.88% [1] - The main business segment, which includes the production of automotive hub bearing units, is expected to grow by about 40% in 2025, with the current revenue contribution from this segment at 35% [2] Group 2: Core Competitiveness - The company is recognized as a high-tech enterprise specializing in automotive hub bearing units, with significant core competencies including: 1. **Technological Innovation**: The company has a comprehensive R&D and production system, covering various vehicle hub bearing units, and has over 100 valid patents [1] 2. **Production Line Layout**: The company is advancing intelligent and flexible transformations to meet diverse business needs and is actively expanding its industrial chain [1] 3. **Product Differentiation**: With years of experience, the company has developed nearly 5,500 types of bearing products, providing full lifecycle services to enhance added value [1] 4. **Strategic Transformation**: The company is adapting to automotive industry trends by promoting electric control business expansion, with small batch supply of electric control products already initiated [1] 5. **Research Collaboration**: The company has established multiple research centers and collaborates with overseas institutions, bringing in postdoctoral researchers to enhance R&D innovation [1] 6. **Intelligent Production**: As a model enterprise for "integration of informatization and industrialization" in Zhejiang Province, the company has implemented fully automated production lines since 2014 [1]

Investment Rating - The investment rating for the company is "Buy" (initial coverage) [2] Core Views - The company is a leader in automotive wheel hub bearings, with a stable growth in its core business and strategic investments in humanoid robot manufacturers and screw production capacity [6][11] - The company has a competitive advantage with a gross margin exceeding 30%, driven by its focus on high-end products and intelligent manufacturing [6][11] - The company is expanding its business into automotive electronics and high-end industrial bearings, with significant growth potential in these emerging sectors [6][11] Financial Summary - Revenue projections for the company are as follows: - 2024A: 665 million - 2025E: 757 million (+13.7%) - 2026E: 973 million (+28.6%) - 2027E: 1,287 million (+32.3%) [2] - Net profit projections are as follows: - 2024A: 140 million - 2025E: 169 million (+20.7%) - 2026E: 204 million (+20.8%) - 2027E: 248 million (+21.7%) [2] - Earnings per share (EPS) are projected to increase from 2.0 in 2024 to 3.5 in 2027 [2] Business Development - The company has established a dual-driven strategy focusing on both aftermarket and OEM markets, with significant growth in the wheel hub bearing unit [11][12] - The aftermarket business is expected to grow steadily, particularly in the European and American markets, driven by increasing vehicle ownership and aging [6][11][22] - The OEM business is poised for high growth, particularly in the electric vehicle sector, with production expected to ramp up significantly [6][11][30] Emerging Business Areas - The company is actively investing in automotive electronics, with a project for 300,000 sets of vehicle-mounted electronic controls expected to launch by the end of 2025 [6][11] - The company is also developing high-end industrial bearings, with several products in the research and testing phases [6][11] Investment and Profitability - The company has seen a significant increase in investment income, contributing to a 20% year-on-year growth in net profit for Q1 2025 [6][11][48] - The company is building an "automotive + robotics" ecosystem through strategic investments in various companies, enhancing its growth potential [6][11][54] Production Capacity and Industry Trends - The company has established a subsidiary to focus on humanoid robot screw production, with a project for 1 million sets of humanoid robot ball screws approved for production [6][11][61] - The domestic market for ball screws and planetary roller screws is expected to grow significantly, with the company positioned to capture a larger market share [6][11][64]