Investment Rating - The report initiates coverage with a "Buy" rating for the company, projecting a target price of HKD 23 based on a 2026 average valuation of PE=18x and a target market capitalization of HKD 35.6 billion [8]. Core Insights - The company is transitioning from the "Takata integration shadow" to a new phase characterized by "global safety cash cow + intelligent automotive Tier 1 + robotics second curve" [9]. - The automotive safety business is expected to maintain stable revenue growth in the mid-to-high single digits over the next three years, supported by the clearing of historical recall and restructuring costs, alongside increasing orders for new energy vehicles [7]. - The company is positioned as a leading global Tier 1 supplier in automotive safety, electronics, and robotics, with a comprehensive product line and platform-based R&D system [9][27]. Summary by Sections Investment Highlights - The company has become one of the few global suppliers capable of providing a complete set of passive safety systems to multinational automakers through acquisitions of KSS and Takata assets, with safety business revenue stabilizing in the hundreds of billions [7]. - The automotive electronics segment focuses on smart cockpits, connected vehicles, ADAS/domain control, and new energy management systems, forming a complete product line and platform-based R&D system [7]. - The company is advancing into robotics, creating integrated solutions for robotic control and collaborating with leading robotics players, which is expected to generate meaningful revenue in 3-5 years [8]. Financial Projections - Revenue projections for 2025-2027 are estimated at RMB 626 billion, RMB 670 billion, and RMB 719 billion, representing year-on-year growth of 12%, 7%, and 7% respectively. Net profit attributable to shareholders is projected at RMB 16 billion, RMB 18 billion, and RMB 20 billion, with growth rates of 67%, 12%, and 11% respectively [8]. Business Development Stages - The company has undergone several development stages: 1. Foundation Stage (2004-2010): Focused on local component supply and quality system establishment [10]. 2. Internationalization Stage (2011-2018): Transitioned to a global Tier 1 supplier through acquisitions [11]. 3. Optimization Stage (2019-2024): Focused on smart and electric vehicle trends, optimizing global operations [12]. 4. Re-entrepreneurship Stage (2025-present): Aiming for dual pillars of automotive and robotics Tier 1 development [13]. Market Position - The company ranks 41st among the largest automotive parts suppliers globally, with projected revenue of RMB 559 billion in 2024. It holds a 26.1% market share in China and a 22.9% share globally in passive safety [19][30]. - The revenue structure is highly internationalized, with approximately 25.3% from the Chinese market and 74.7% from overseas markets [21]. Competitive Landscape - The global automotive passive safety market is characterized by a high concentration of suppliers, with the top three companies holding over 90% market share. The company ranks second globally and in China, benefiting from increasing industry consolidation [42][43].

Core Insights - Junsheng Electronics' H-shares will officially enter the Hong Kong Stock Connect on December 4, which is expected to attract more mainland investors and enhance trading activity and liquidity, leading to a potential revaluation of the company's stock in the Hong Kong market [1] - There is currently a nearly 40% premium of Junsheng Electronics' Hong Kong shares over its A-shares, indicating a disparity in market valuation, particularly regarding its robotics components business [1] - The company's dual positioning as a Tier 1 supplier in both the automotive and robotics sectors is expected to drive future growth, with a strong operational resilience demonstrated in its core automotive components business [1][2] Automotive Components Business - Junsheng Electronics' automotive components business serves as a solid foundation for its growth, benefiting from deep industry experience, a unique global layout, and improving profitability [2] - The company is the second-largest global supplier of automotive safety systems and ranks among the top suppliers of intelligent cockpit domain controllers [2] - With over 25 R&D centers and 60 production bases globally, the company has established a robust local operation model, with more than 70% of its revenue coming from overseas markets, which helps mitigate geopolitical risks [2] - The gross margin for the automotive components business reached 18.6% in Q3 2025, marking a three-year high, supported by supply chain optimization and production efficiency improvements [2] Robotics Business Development - Junsheng Electronics is strategically expanding into the robotics sector, aiming to leverage its automotive technology advantages to capture a potential market worth over $100 billion [3] - Since 2025, the company has made significant moves in the robotics field, including the establishment of a wholly-owned subsidiary and partnerships with leading robotics firms [3] - The company has developed a comprehensive solution for robotic components and has begun delivering products to notable clients, indicating strong market traction [3] Order Backlog and Revenue Visibility - The company has a robust order backlog, with over 71 billion yuan in new global orders secured in the first three quarters of 2025, including a record 40.2 billion yuan in Q3 alone [4] - The increasing proportion of orders from leading domestic brands and new energy vehicle manufacturers is a key driver of this growth [4][5] - The automotive electronics business has shown a gross margin increase of 2.2 percentage points year-on-year to 21.5% in the first half of 2025, contributing to overall margin improvement [5] Valuation and Market Position - Junsheng Electronics' current valuation presents a significant safety margin compared to industry averages, with potential for earnings elasticity from automotive safety business recovery and revenue growth from intelligent vehicle orders [5] - The transition to the Hong Kong Stock Connect is expected to shift the company's valuation logic from a traditional automotive parts supplier to an intelligent hardware platform, enhancing liquidity and addressing valuation discrepancies [5]

Core Insights - Junsheng Electronics has completed its H-share issuance and listing on the Hong Kong Stock Exchange on November 6, 2025, becoming an A+H share listed company with stock codes 0699.HK and 600699.SH [1] - The company is a provider of intelligent automotive technology solutions, focusing on the research, manufacturing, and sales of automotive parts, particularly in automotive electronics and safety [3] Company Overview - According to Frost & Sullivan, Junsheng Electronics ranks 41st globally in the automotive parts industry by revenue in 2024, and is the second largest supplier of automotive passive safety products in China and globally [3] - The company is also recognized as the second largest and fourth largest supplier of intelligent cockpit domain controllers in China and globally, respectively, serving over 100 global automotive brands [3]

Core Insights - Lixun Precision achieved a revenue of 268.795 billion yuan in 2024, marking a year-on-year growth of 15.91%, with a net profit of 13.366 billion yuan, up 22.03% [1] - The automotive business has become the fastest-growing segment for Lixun, with revenue reaching 13.758 billion yuan, a significant increase of 48.69% year-on-year, contributing to 5.12% of total revenue [1] - The company has ambitious plans to become a leading Tier 1 supplier in the global automotive parts market, with automotive revenue increasing over 18 times from 0.723 billion yuan in 2014 to 13.758 billion yuan in 2024 [1][2] Automotive Business Development - Lixun established its automotive division in 2011, focusing on harnesses and connectors, which are critical components in both traditional and electric vehicles [2] - The company has pursued both organic growth and acquisitions to expand its automotive business, acquiring several companies between 2012 and 2017 to enhance its capabilities in complex precision components and body control systems [2] - By 2022, Lixun had become a comprehensive supplier for low-voltage and high-voltage harnesses, as well as charging solutions, positioning itself well within the automotive supply chain [3] Market Trends and Opportunities - The shift towards electric and intelligent vehicles has led to a reduction in harness length but an increase in the value of harnesses per vehicle, with the average value of a harness in electric vehicles estimated at around 5,000 yuan, a 40%-100% increase compared to traditional vehicles [3] - Lixun has formed strategic partnerships with major automotive manufacturers, including a significant investment in Chery Automobile to enhance its capabilities as a Tier 1 supplier [4] - In 2023, Lixun co-founded Lisheng Technology with GAC Group, focusing on core components for intelligent connected vehicles, with production set to begin in 2024 [5] Strategic Acquisitions and Global Expansion - In September 2024, Lixun announced a major acquisition of a 50.1% stake in German automotive harness manufacturer Leoni, which will enhance its competitive edge in the global automotive harness market [5] - The company aims to leverage its extensive experience in consumer electronics and communication to adapt quickly to the automotive supply chain, enhancing its manufacturing capabilities [5][6] - Lixun's automotive business has reached a scale of over 10 billion yuan, and the company plans to continue expanding through both organic growth and acquisitions [6] Future Outlook - Lixun has established a diversified strategic framework across consumer electronics, automotive, and communication sectors, aiming for collaborative growth among its core business units [7] - The company is focused on enhancing its global footprint and technological advantages while exploring new markets, with a strategic plan for the next five years [7] - Analysts predict that Lixun's automotive segment will continue to grow rapidly, and the upcoming "super replacement cycle" for Apple products may significantly boost its consumer electronics business [8]