Investment Highlights - Fuda Co., Ltd. is a leading manufacturer of crankshafts in China, established in 1995 and listed in 2014, with product offerings including crankshafts, clutches, precision forgings, gears, and bolts [1] - The company is entering new growth avenues through its focus on the new energy sector and robotics, with expectations for significant revenue contributions from these areas in the future [1] Crankshaft Demand Growth - The demand for crankshafts is expected to rise due to the increasing sales of hybrid vehicles, which still require crankshafts despite the rise of pure electric vehicles [2] - By 2024, the penetration rate of hybrid vehicles in the new energy vehicle market is projected to reach 40%, revitalizing the passenger car crankshaft market [2] - Fuda has successfully transitioned its crankshaft business from commercial vehicles to passenger vehicles, with over 50% of its crankshaft supply for BYD in 2024 [2] - A new production line with a capacity of 1 million hybrid crankshafts is expected to be operational by May 2025, indicating further potential for revenue growth [2] Expansion in New Energy Gears - Fuda has invested 408 million yuan to establish a subsidiary focused on new energy electric drive precision gears, with production expected to start in July 2024 [3] - The company anticipates significant revenue growth from this segment between 2025 and 2026, with a full production capacity of 600,000 sets [3] - Fuda has secured multiple projects with major clients such as BYD and Geely, indicating strong market demand for its new energy gear products [3] Robotics Sector Development - Fuda is expanding into the robotics sector, having acquired a 35% stake in Changban Robot Technology in March 2024 and successfully developing a planetary reducer prototype by November 2024 [4] - The company aims to leverage synergies between its existing automotive clients and new robotics customers, enhancing its competitive position in the robotics market [4] - Fuda's technical expertise in precision gears and its existing manufacturing capabilities are expected to facilitate cost reductions and operational efficiencies in the robotics sector [4] Financial Projections - Revenue forecasts for Fuda are projected at 2.434 billion yuan in 2025, 3.019 billion yuan in 2026, and 3.394 billion yuan in 2027, with net profits expected to reach 301 million yuan, 385 million yuan, and 460 million yuan respectively [4] - The company is expected to achieve earnings per share (EPS) of 0.47 yuan, 0.60 yuan, and 0.71 yuan for the years 2025 to 2027, with corresponding price-to-earnings (PE) ratios of 38, 30, and 25 times [4]