Summary of Micro Light Co., Ltd. Conference Call Company Overview - Micro Light Co., Ltd. is a global leader in cold chain motors, with steady growth in its main business of refrigeration motors and fans, benefiting from downstream application expansion and product structure optimization, such as the increased proportion of high-margin ECM motors driving performance growth [2][4][5]. Core Business Insights - The company is actively expanding its servo motor business and has integrated encoder and controller segments, aiming for modular supply. In the humanoid robot sector, it is developing hollow cup motors and frameless torque motors for applications in dexterous hands and other devices [2][5]. - Collaboration with Northwestern Polytechnical University on deep-sea technology products has led to the inclusion of deep-sea technology in government work reports, with underwater combat equipment to be showcased in a military parade, indicating potential policy catalysts exceeding expectations [2][5][19]. Financial Performance - Over the past decade, the company has achieved a compound annual growth rate (CAGR) of over 12% in revenue and over 10% in net profit attributable to shareholders. The balanced structure of domestic and foreign sales, with good cost control, has led to superior profitability. Revenue growth is expected to be around 20% in 2025, with profits projected at 360 to 370 million yuan, a year-on-year increase of approximately 65% [2][6][11][21]. - The company has established a production base in Thailand, which has commenced operations and is expected to gradually contribute profits, supporting global sales of micro motors and humanoid robot products, potentially becoming a new growth point [2][7][20]. Market Position and Competitive Advantage - Micro Light Co., Ltd. has been recognized as a champion in the manufacturing sector by the Ministry of Industry and Information Technology in 2019 and 2022, maintaining its leading position in niche markets. The current revenue scale is about one-tenth that of Germany's EBM company, indicating significant growth potential [14]. Product and Market Development - The cold chain logistics industry is experiencing stable growth, driven by the expansion of downstream applications and optimization of product structures. The demand for food cold chain logistics in China is substantial, with a total demand of approximately 350 million tons in 2023, and a cold chain circulation rate of only 23%, far below the 67% level of developed countries [13]. - The servo motor business encompasses five major application scenarios, including textile machinery, industrial automation, robotics, and CNC machine tools. Despite recent price pressures due to industry competition, there remains growth potential in downstream demands such as AGV (Automated Guided Vehicle) and semiconductor servo motors [15][16]. Profitability and Cost Control - The company maintains a gross margin of 30% to 35%, benefiting from its leading position in the industry and effective cost control. The gross margin for ECM motors exceeds 37%, significantly higher than traditional products [9][10]. - The company has effectively controlled operating expenses, with sales and management expenses maintained at a low level of 2% to 3%, and R&D expenses stable at around 4% [10]. Future Outlook - The company is optimistic about the future of its deep-sea technology sector, expecting policy catalysts to exceed expectations in the second half of 2025. The ongoing capacity expansion projects in both domestic and Thai markets are expected to provide solid support for future revenue and profit growth [19][20]. - The company anticipates maintaining a revenue growth rate of around 25% from 2025 to 2027, with a current valuation PE ratio of approximately 20 times, indicating that it is a highly attractive investment opportunity [21].

Core Viewpoint - The company reported a strong performance in 2024, with revenue and net profit showing significant year-on-year growth, indicating robust operational health and market expansion efforts. Group 1: Financial Performance - In 2024, the company achieved revenue of 1.41 billion yuan, up 11.1% year-on-year, and a net profit attributable to shareholders of 220 million yuan, up 82.2% year-on-year [1] - The fourth quarter of 2024 saw revenue reach 390 million yuan, a 24.4% increase year-on-year, with a net profit of -10 million yuan, marking a reduction in losses by 87 million yuan [1] - The company’s gross profit margin for 2024 was 32.3%, a decrease of 1.4 percentage points, while the net profit margin improved to 15.7%, an increase of 6.6 percentage points [2] Group 2: Market Expansion - The company focused on deepening its domestic market presence while expanding internationally, achieving overseas revenue of 770 million yuan, a 15.2% increase year-on-year, which accounted for 54.8% of total revenue [1] - Domestic revenue reached 640 million yuan, up 6.5% year-on-year, representing 45.2% of total revenue [1] Group 3: Business Segments - The refrigeration motor and fan segment generated revenue of 1.26 billion yuan, a 10.6% increase year-on-year, making up 89.2% of total revenue, with notable growth in external rotor fans and cold cabinet motors [3] - The servo motor segment achieved revenue of 110 million yuan, a 19.0% increase year-on-year, accounting for 7.6% of total revenue [3] Group 4: Product Development - The company is actively advancing the development and industrialization of high-efficiency, energy-saving, and intelligent new products, with successful launches in various applications including heat pumps and industrial automation [3] - Multiple new products have been developed and are expected to benefit from the growth in the humanoid robotics industry [3] Group 5: Future Outlook - The company forecasts net profits of 360 million yuan, 410 million yuan, and 480 million yuan for 2025 to 2027, with a projected compound annual growth rate of 29% [3] - A target price of 54.95 yuan has been set based on a 35X target PE for 2025, maintaining a "buy" rating [3]