Core Viewpoint - Aikodi (600933) has acquired a 71% stake in Zhuoerbo, a company engaged in the research, production, and sales of micro-special motors and precision components primarily for the automotive sector, indicating a strategic move to enhance collaboration and resource sharing between the two companies [1] Group 1 - Zhuoerbo specializes in micro-special motors and precision components, with its products mainly applied in the automotive industry [1] - The acquisition is expected to create significant synergies in key products, industrial resources, customer resources, and global strategies between Aikodi and Zhuoerbo [1]

Core Insights - The company reported strong Q3 performance with significant improvements in gross margin, driven by cost reduction, product structure adjustment, and overseas market expansion [1] - The company has a robust order reserve, with over 400 new products developed annually and a total order value exceeding 10 billion yuan, laying a solid foundation for future growth [2] - The company is actively expanding its robotics business alongside its core components, enhancing overall competitiveness through strategic acquisitions and product diversification [3] Financial Performance - For the first three quarters, the company achieved revenue of 5.31 billion yuan, a year-on-year increase of 6.7%, and a net profit attributable to shareholders of 895 million yuan, up 20.7% [1] - In Q3 alone, revenue reached 1.86 billion yuan, reflecting a year-on-year growth of 7.9% and a quarter-on-quarter increase of 4.3% [1] - The gross margin for Q3 was 32.6%, showing a significant increase of 3.4 and 2.8 percentage points year-on-year and quarter-on-quarter, respectively [1] Operational Developments - The company is accelerating overseas capacity construction, with the second phase of the Mexico plant set to commence production in June 2025, aimed at reducing logistics costs and adapting to macroeconomic fluctuations [2] - The Malaysian base is preparing for mass production in resource recycling, while aluminum die-casting facilities are also under construction, indicating a comprehensive approach to expanding production capabilities [2] Strategic Initiatives - The company is leveraging its die-casting advantages to expand into the robotics sector, with products categorized into lightweight automotive components, robotics parts, and precision components for micro motors [3] - The acquisition of a 71% stake in Zhaolibo, focused on precision components for micro motors, is expected to enhance synergies across product lines and customer resources [3] - Future net profit projections for 2025-2027 are set at 1.253 billion, 1.491 billion, and 1.742 billion yuan, respectively, with a target price of 30.5 yuan based on a 25x PE ratio for 2025 [3]

Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [1][3][60] Core Views - The company has received approval from the Shanghai Stock Exchange for the acquisition of 71% of Zhuoerbo Precision Electromechanical Co., Ltd. and plans to raise supporting funds through a share issuance [2][5] - Zhuoerbo's performance commitments for 2025, 2026, and 2027 are net profits of no less than 141.5 million, 156.9 million, and 174.1 million yuan respectively, which are expected to enhance the company's profits by 111 million and 123 million yuan in 2026 and 2027 [3][16] - The company reported a steady revenue growth of 1.41% year-on-year in Q1 2025, achieving a revenue of 1.666 billion yuan and a net profit of 257 million yuan, which is a 10.94% year-on-year increase [3][21] - The company is focusing on expanding its product categories, enhancing production capacity, and transitioning into the embodied intelligence field, with three main growth paths: main business, new categories, and instant robots [3][51] Summary by Sections Financial Performance - The company achieved a revenue of 1.666 billion yuan in Q1 2025, a year-on-year increase of 1.41%, and a net profit of 257 million yuan, reflecting a 10.94% year-on-year growth [3][21] - The projected revenues for 2025, 2026, and 2027 are 8.143 billion, 9.914 billion, and 11.670 billion yuan respectively, with year-on-year growth rates of 20.7%, 21.7%, and 17.7% [3][60] - The projected net profits for the same years are 1.113 billion, 1.373 billion, and 1.646 billion yuan, with year-on-year growth rates of 18.4%, 23.4%, and 19.9% [3][60] Business Strategy - The company is actively expanding its product lines and enhancing its capabilities in the automotive lightweight and electric vehicle sectors, with a focus on large components and magnesium alloy products [49][51] - The acquisition of Zhuoerbo is seen as a strategic move to enhance product offerings and achieve synergy between the two companies [51] - The company is also investing in the robotics sector, establishing a subsidiary focused on embodied intelligence products and components [51][52] Market Position - The company has a strong governance structure and quality customer resources, which contribute to its leading profitability in the industry [43][45] - The company’s products cater to the growing demand for lightweight and electric vehicle components, positioning it well for future growth [49][51]

Group 1 - The company Aikodi plans to acquire 71% of Zhuoerbo (Ningbo) Precision Electromechanical Co., Ltd. through a combination of issuing shares and cash payment, with the transaction price set at 1.118 billion yuan [5][6] - The acquisition aims to enhance the company's revenue and profit, leveraging significant synergies in product offerings, industry resources, and global strategies [8][7] - Zhuoerbo reported a revenue of 1.051 billion yuan and a net profit of 154 million yuan for the year 2024, with total assets amounting to 1.439 billion yuan [7][8] Group 2 - Aikodi has also announced adjustments to its "Aikodi Intelligent Manufacturing Technology Industrial Park Project," designating Aikodi (Malaysia) Co., Ltd. as the new implementing entity [9] - The total investment for the project remains unchanged at 1.57 billion yuan, with net fundraising of 1.553 billion yuan after deducting issuance costs [9] - As of May 26, Aikodi's stock price closed at 16.09 yuan per share, with a total market capitalization of 15.8 billion yuan [10]

Core Viewpoint - The company is planning to acquire 71% of the equity of Zhuoerbo (Ningbo) Precision Electromechanical Co., Ltd. through a combination of issuing shares and cash payment, while also raising supporting funds [7][8]. Group I: Transaction Overview - The transaction involves the issuance of shares and cash payment to acquire 71% of Zhuoerbo's equity, making it a subsidiary of the company [8][9]. - The total transaction price for the 71% equity is set at 1,118.25 million yuan, with 503.21 million yuan in cash and 615.04 million yuan in shares [15][16]. - The share issuance price is determined to be 14.00 yuan per share, which is above the minimum required price based on market averages [10][11]. Group II: Legal and Regulatory Compliance - The transaction complies with relevant laws and regulations, including the Company Law and Securities Law of the People's Republic of China [7][8]. - The company has confirmed that the transaction does not constitute a related party transaction, as the transaction counterparties do not hold significant shares in the company [31]. - The transaction is not classified as a major asset restructuring, as the financial metrics do not meet the thresholds set by regulatory guidelines [33][34]. Group III: Financial Impact and Performance Commitments - The company anticipates that the acquisition will enhance its asset scale, net profit levels, and earnings per share [36]. - The performance commitment includes a net profit target of no less than 47.25 million yuan over three years, with specific conditions for compensation if targets are not met [18][19]. - The company plans to implement measures to mitigate any potential dilution of immediate returns resulting from the transaction [36][37].

Group 1 - Aikodi (600933.SH) plans to acquire 71% of Zhuolibo's equity for a transaction price of 1.118 billion yuan, while also issuing shares to raise supporting funds from no more than 35 specific investors [1] - Zhuolibo specializes in the R&D, production, and sales of precision components for micro-special motors, primarily used in the automotive micro-motor sector [1] - Zhuolibo attempted an IPO in August 2023 but ultimately chose to be acquired by Aikodi as a means to achieve a backdoor listing [1] Group 2 - Concerns regarding the acquisition include doubts about business synergy, as Aikodi claims Zhuolibo will help it enter the "drone, robotics, and industrial automation" sectors, while Zhuolibo's website only mentions applications in automotive motors, power tools, and home appliances [2] - Governance structure risks arise from Zhuolibo being family-controlled, with the Wang family holding 95.69% of shares and family members occupying key management positions [2] - The acquisition involves a high premium, with Zhuolibo's value assessed at 1.576 billion yuan using the income approach, reflecting a valuation increase of 118.48% compared to the asset-based approach [2]