Core Viewpoint - Sanlian Forging is recognized as a high-quality supplier of automotive forged parts and is actively expanding into the robotics sector [1] Group 1: Product Lines and Recognition - The company has established seven product lines: hub bearings, high-pressure common rail, ball joint rods, steering knuckles, fork shafts, axles, and others [1] - Sanlian Forging has gained wide recognition from international automotive parts groups such as ZF and Schaeffler in terms of production capacity, product variety, and product quality [1] Group 2: Expansion into Robotics and Aerospace - In April 2025, the company will set up a subsidiary, Wuhu Sanlian Forging Co., Ltd., focusing on a research institute for robotics and aerospace components [1] - The main products will include planetary gear reducers, screws, shaft gears, gears, and transmission gears, which are closely related to the company's forging processes [1] Group 3: Future Growth Potential - The company has deep technical reserves and has established in-depth cooperation with several global top 100 parts groups [1] - There is an expectation for the company to gradually expand from automotive parts into the robotics and aerospace sectors, indicating potential new growth points [1] - The initial coverage of the company has been rated as "Buy" [1]

Core Viewpoint - The company, Sanlian Forging (001282), is establishing a subsidiary for robotics and aerospace components by May 2025 to enhance its R&D capabilities in these fields [1] Summary by Relevant Categories Company Development - The new subsidiary will focus on developing products such as planetary gear reducers, screws, shafts, gears, and transmission gears, which are closely related to the company's existing forging processes [1] Industry Challenges - The robotics and aerospace industries are characterized by high technical barriers, long R&D cycles, and significant investment requirements, which may lead to risks of technological breakthroughs falling short of expectations or R&D failures [1] - The new market is highly competitive and subject to substantial uncertainties due to regulatory policies and market conditions [1]

Core Viewpoint - The company is a high-quality supplier of automotive forged components, with a strong focus on forging and machining processes, and is expanding its product lines into robotics and aerospace applications [1][2]. Group 1: Company Overview - Established in 2004, the company has developed seven product lines including hub bearings, high-pressure common rail systems, ball joint rods, steering knuckles, fork components, shafts, and others [1]. - The company has gained wide recognition from international automotive parts groups such as ZF and Schaeffler for its production capacity, product variety, and quality [1]. Group 2: Product Development - In April 2025, the company will establish a subsidiary, Wuhu Sanlian Forging Co., Ltd., focusing on a research institute for robotics and aerospace components, with products including planetary gear reducers, screws, shaft teeth, gears, and transmission teeth [2]. - The company employs hot die forging technology, allowing it to independently complete product design, mold design, and manufacturing, giving it a leading edge in precision forging and mold design [1]. Group 3: Customer Relationships - The company has established deep collaborations with several global top 100 automotive parts groups, including Bosch, ZF, Magna, Schaeffler, BorgWarner, Benteler, NTN, American Axle, Linamar, JTEKT, and NSK [2]. - Notably, Bosch, ZF, and Magna rank among the top five in the 2024 global automotive parts supplier list, highlighting the company's strong market position within the industry [2]. Group 4: Investment Outlook - The company is expected to achieve steady growth in performance, with projected net profits of 170 million, 220 million, and 270 million yuan for 2025-2027, corresponding to growth rates of +15%, +28%, and +23% [2]. - The company is initiating coverage with a "buy" rating, based on its deep expertise in forging and machining, and its expansion into new growth areas in robotics and aerospace [2].

Core Viewpoint - The company is establishing a subsidiary for robotics and aerospace components to enhance its R&D capabilities in these fields [1] Company Development - The subsidiary will focus on developing products such as planetary gear reducers, screws, shafts, gears, and transmission gears, which are closely related to the company's existing forging processes [1] Industry Challenges - The robotics and aerospace industries are characterized by high technical barriers, long R&D cycles, and significant investment requirements, which may lead to risks of underperformance in technological breakthroughs or R&D failures [1] - The new market is highly competitive and subject to substantial uncertainties due to regulatory policies and market conditions [1]

Core Viewpoint - The company has established a new subsidiary focused on robotics and aerospace components to enhance its R&D capabilities in these fields [1] Group 1: Company Developments - The new subsidiary was set up in May 2025 and will focus on products such as planetary gear reducers, screws, shafts, gears, and transmission gears, which are similar to the company's current forging processes [1] - The company aims to expand its presence in the high-tech sectors of robotics and aerospace [1] Group 2: Industry Challenges - The robotics and aerospace industries are characterized by high technical barriers, long R&D cycles, and significant investment requirements [1] - There are risks associated with potential delays in technological breakthroughs or R&D failures [1] - The new market is highly competitive and subject to substantial regulatory and environmental influences, leading to uncertainties [1]

Financial Performance - In 2024, the company achieved operating revenue of 156,232.18 million yuan, a year-on-year increase of 26.44% [2] - The net profit attributable to shareholders was 14,630.02 million yuan, up 16.64% from the previous year [2] - The net profit after deducting non-recurring gains and losses was 13,963.02 million yuan, reflecting a growth of 24.80% [2] Business Expansion and Product Development - The establishment of subsidiaries aims to enhance R&D capabilities in robotics and aerospace, promoting technological innovation and business diversification [2][3] - Main products from the subsidiaries include planetary gear reducers, screws, shafts, gears, and transmission gears, which are closely related to the company's current forging processes [3] Market Risks and Challenges - The robotics and aerospace sectors face high technical barriers, long R&D cycles, and significant investment, leading to potential risks of unmet technological breakthroughs or R&D failures [3] - The company advises investors to be cautious and aware of investment risks due to intense market competition and regulatory influences [3] Cash Flow and Financial Health - The net cash flow from operating activities decreased significantly due to increased long-term asset investments, such as projects for automotive lightweight forging and annual production of 10 million automotive axle forgings [3] - The company maintains a good financial status with stable cash flow, effectively covering short-term debts and operational funding needs [4] Export Growth and Client Base - The company’s products are primarily exported to Europe and North America, with major clients including Schaeffler, ZF, and Linamar, contributing to significant business growth [4] - The growth is attributed to strategic supply chain needs from global procurement systems and the company's competitive advantages in cost control, delivery efficiency, and quality [4] Product and Client Structure - The company’s main clients include Bosch, ZF, Magna, and others, with direct access to major automotive manufacturers like BMW, Volkswagen, and NIO [5] - The company has established development projects for new energy vehicle components with well-known manufacturers, including Tesla and BYD [5] Competitive Landscape - Key competitors include listed companies like Jingzhu Technology and Fuda Co., as well as non-listed companies such as Desifuge and Ningbo Snail [5] - The company offers a diverse product line that meets various customer needs, establishing long-term partnerships due to high entry barriers in the forging industry [5]