Core Insights - Morgan Stanley's report highlights the robust cash flow foundation of Wolong Electric Drive's core HVAC/industrial/explosion-proof motor business, while three emerging growth engines—humanoid robot components and solutions, data center HVAC motors, and electric aviation propulsion motors—are transitioning from concept to a scalable phase with clear customer orders and ramping production capacity [2][4]. Group 1: Humanoid Robots - Wolong Electric Drive has established a comprehensive layout in the humanoid robot sector, including components, OEM manufacturing, and system solutions [3]. - The company supplies core components such as frameless torque motors and joint modules to various enterprises, including AgiBot and Lenovo, and has a significant market share in multiple models [3]. - The humanoid robot business is expected to see significant order growth in 2026, with product ASP in the hundreds of yuan range and gross margins exceeding 30%-40% for some products [3]. Group 2: Data Center Motors - Data center HVAC motors represent the company's most immediate profit growth opportunity, with products designed for large-scale cooling systems [4]. - The North American market shows strong demand, with higher-than-average gross margins, and the company is expanding its supply chain through partnerships with firms like Daikin and Wilo [5]. - The growth rate for this product line is expected to significantly outpace traditional product lines by 2026 [4]. Group 3: Electric Aviation Motors - Wolong Electric Drive has formed a joint venture with Yufeng Future to supply electric propulsion motors for the AE200 eVTOL, with plans for model certification by 2026 [4]. - The company has received substantial orders for certification/validation motors, with each unit contributing several million yuan in revenue [4]. - The partnership has over 1,000 pre-orders for the AE200, and the company is also collaborating with COMAC on electric aviation projects [4]. Group 4: Financial Performance and Outlook - In the first three quarters of 2025, the company reported a 2.84% year-on-year revenue increase and a 28.26% increase in net profit [6]. - The revenue structure is projected to shift to 60% domestic and 40% overseas by mid-2025, with overseas markets expected to grow by over 20% [6]. - The company aims for a net profit target of 1.3 billion yuan in 2026, driven by high-value categories and optimized customer structure [6]. Group 5: Investment Rating - Morgan Stanley has assigned a "neutral" investment rating to Wolong Electric Drive, with a target price of 44 yuan by December 2026 [6]. - The valuation model incorporates conservative assumptions for AI data centers, humanoid robots, and eVTOL businesses, predicting a 33% compound annual growth rate for net profit from 2026 to 2028 [6]. - The stock price has already reflected much of the expected business growth, suggesting a wait for clearer commercial progress or better entry timing [6].