Core Viewpoint - The company Luoyang Aowei Te focuses on the research and manufacturing of high-precision bearings, particularly thin-walled crossed roller bearings, which have a broad market prospect due to the increasing demand for robots and high-end equipment [1] Group 1: Company Strategy - Luoyang Aowei Te plans to follow market demand for capacity expansion and market development, aligning with the growth pace of downstream industries such as robotics and high-end equipment [1] - The company aims to leverage its extensive experience in manufacturing and its comprehensive global sales network to empower Aowei Te in opening international markets [1] Group 2: Market Opportunities - The core products of Luoyang Aowei Te are primarily used in harmonic and planetary reducers, indicating a significant opportunity in the robotics sector [1] - The company is positioned to seize growth opportunities in the robot era, aiming for sustainable long-term value creation [1]

Group 1: Strategic Investment and Growth - The company has invested in Luoyang Aowite, acquiring an 18% stake, aiming to leverage Aowite's technology and products to penetrate the core components market for robots, fostering new business growth [2][3] - The anticipated sales revenue increase from the investment in Aowite is expected to align with market demand from 2026 to 2028, particularly in high-precision bearings for robotics [2][3] Group 2: Market Performance and Trends - The company has seen a positive trend in orders since Q3 2025, attributed to improved external conditions and strategic capacity planning, which aligns with operational expectations [4][5] - In the North American market, the company has established a strong presence, with revenue from this region accounting for over 80% of total revenue in the first three quarters of 2025, supporting overall performance growth [5] Group 3: Product Innovation and Market Expansion - The company is focusing on the rapidly growing plant lighting market, driven by factors such as policy changes, technological advancements, and increasing demand for local food production [4][5] - The expansion of vertical farming and the legalization of cannabis in several U.S. states have created a robust demand for LED technology in plant lighting, contributing to significant order growth [4][5]

Group 1: LED Lighting Business - The company focuses on the outdoor and industrial LED lighting segments, establishing a global production base to enhance delivery capabilities [1] - The company has formed stable business partnerships with well-known brands such as Longdawans, Signify, RAB Lighting, and Hubbell [1] - The company has production bases in Shenzhen and Zhongshan, China, with an intelligent manufacturing base in Zhongshan expected to be operational by Q3 2024, and has also established overseas production bases in Vietnam and Mexico [1] - The gross margin of the lighting business has declined in the first three quarters of 2025 due to overseas tariff policies, but a turnaround is expected with the delivery of new overseas factories [1] Group 2: Thin-Wall Cross Roller Bearings - Thin-wall cross roller bearings are critical components in industrial robots, offering high rigidity, precision, and load capacity compared to standard bearings [2] - The demand for harmonic reducers, which utilize thin-wall cross roller bearings, is projected to reach approximately 800,000 units in China in 2024, growing to about 1.21 million units by 2028 [2] - The market for thin-wall cross roller bearings is expected to continue expanding due to the rapid development of the industrial robot industry [2] Group 3: Strategic Investments and Future Outlook - The company is strategically investing in the domestic production of thin-wall cross roller bearings to replace imports, leveraging the technical expertise and production capacity of its partner, Luoyang Ovit Precision Bearings [3] - The company anticipates revenue of 1.504 billion, 1.755 billion, and 1.905 billion yuan for the years 2025 to 2027, with net profits of 23 million, 120 million, and 169 million yuan respectively, and EPS of 0.31, 1.64, and 2.31 yuan [3] - The company is initiating coverage with a "recommended" rating, considering the stable development of its lighting business and its proactive entry into the core components of robotics [4]

Group 1: Company Performance and Challenges - The company's performance has declined due to trade friction, leading to increased costs in logistics, management, and production from Q4 2024 to Q3 2025, but these impacts are expected to stabilize as operations in Zhongshan, Vietnam, and Mexico become more efficient [1] - The company anticipates a trend reversal in profitability as scale effects are gradually released [1] Group 2: North American Market Expansion - The company has established a "consolidate existing customers + breakthrough new customers" strategy in North America, enhancing cooperation with core customers and driving steady order growth [2] - New key customers developed earlier are showing results, and the company is leveraging North American customers' channel resources for efficient expansion [2] Group 3: Production Capacity and Strategy - The Vietnam factory is the main overseas production hub, accounting for approximately 70% of the company's products shipped in 2025, while the Mexico factory serves as a strategic supplement focusing on local compliance and rapid response [3] - The collaboration between the Vietnam and Mexico factories creates an efficient synergy that effectively mitigates tariff impacts [3] Group 4: Future Growth Areas - The outdoor and industrial LED lighting market has low penetration overseas and is expected to grow significantly, providing a strong growth opportunity for the company [4] - The company is also focusing on special lighting areas such as plant lighting, sports lighting, and explosion-proof lighting, which are anticipated to experience rapid growth [4] Group 5: Special Lighting Business Performance - The special lighting segment has seen significant growth this year, driven by demand in North America, particularly in the plant lighting market, which is projected to reach $1.366 billion in 2025 with a compound annual growth rate of 8.6%-9.04% from 2025 to 2033 [5] - The company aims to capitalize on the rapid growth of the plant lighting market through continuous innovation and expansion [5] Group 6: Investment and Collaboration - In September 2025, the company signed an investment agreement with Luoyang Aowei, focusing on high-end bearing production, leveraging its supply chain resources and market experience to empower the invested enterprise [6] - The collaboration aims to develop Aowei into a benchmark enterprise in its niche market [6] Group 7: Market Outlook for Key Products - The market for thin-walled cross roller bearings, crucial for robotics, is expected to grow rapidly due to the increasing demand from various high-tech industries [7] - The company plans to maintain a flexible and cautious development strategy in the robotics sector, adapting to market opportunities [7]

Group 1: Company Overview and Financial Performance - In the first three quarters of 2025, the company achieved a revenue of approximately CNY 1.155 billion, marking a 1.03% increase year-on-year, setting a historical high for revenue [3] - The net profit attributable to shareholders for the same period was approximately CNY 19.53 million, a decline of 79.23% compared to the previous year, due to intensified industry competition and international trade frictions [3] Group 2: Production and Capacity Strategy - The company has increased its R&D investment to accelerate the intelligent iteration and upgrade of core products, while also promoting special lighting products and expanding into new markets [2] - Approximately 70% of the company's products are shipped from its Vietnam factory, which serves as the main overseas production hub, while the Mexico factory is a strategic supplementary base [4] Group 3: Market and Competitive Landscape - The North American LED lighting market is expected to grow significantly in the long term, despite short-term demand weakness due to tariffs [5] - The company plans to leverage its established presence in North America to expand into Europe and other regions, utilizing its relationships with major clients [5] Group 4: Investment in New Ventures - In September 2025, the company strategically invested in Luoyang Aowite, which specializes in the production of bearings and components, aiming to enhance its capabilities in high-end manufacturing [6] - Aowite has a team of approximately 100 people and has established a production base in Luoyang, with the ability to produce a diverse range of products across 10 series [8] Group 5: Future Outlook and Strategic Goals - The company anticipates that as its production bases in Zhongshan, Vietnam, and Mexico stabilize, its profitability will trend positively [4] - Aowite's core competitive advantages include a strong technical team with 8-15 years of experience and a diverse product matrix, positioning it well in the precision bearing market [9]

Market Demand and Trends - In the first half of 2025, the U.S. LED lighting market faced weak demand due to tariff policies, leading to a contraction in market size. However, the second half showed signs of recovery as tariff policies eased, resulting in a gradual release of delayed procurement plans and increased end-user inventory demand [2]. - The U.S. LED lighting market is expected to exhibit "phase-specific recovery" characteristics, with demand warming up in the latter half of 2025 [2]. Competitive Landscape - The LED lighting industry's competitive landscape is significantly affected by tariff factors, particularly in overseas markets like Europe and the U.S., where high tariffs increase cost pressures on Chinese exporters [3]. - Smaller manufacturers with limited capital and scale face heightened survival challenges, while larger companies with overseas production capabilities can effectively avoid tariff barriers and capture market share from exiting competitors [3]. Profitability and Growth Strategies - The company plans to enhance profitability through a dual approach: focusing on high-potential special lighting markets and optimizing costs across the entire supply chain [4]. - Key strategies include expanding into high-growth special lighting markets, diversifying into European and Asian markets, and investing in new technologies to create a second growth curve [4]. Special Lighting Market Performance - The company has seen significant growth in the special lighting sector, particularly in plant lighting, driven by factors such as legalization of cannabis in several U.S. states and energy subsidies [4]. - The LED plant lighting market is projected to reach $1.366 billion in 2025, with a compound annual growth rate (CAGR) of 8.6%-9.04% from 2025 to 2033 [4]. Production Capacity and Global Expansion - The company has established production bases in Shenzhen and Zhongshan, China, and has set up overseas production facilities in Vietnam and Mexico, with approximately 70% of products expected to be shipped from Vietnam in 2025 [5]. - The investment in Luoyang Aowei Precision Bearing Co., Ltd. aims to leverage the company's manufacturing expertise and supply chain advantages to enhance its market position in high-precision bearings [6]. Financial Health and Future Plans - The company currently has sufficient cash flow and a relatively low debt-to-asset ratio, with no immediate financing plans. Future financing will be assessed based on market conditions and specific project needs [7][8]. - The controlling shareholder's shares are expected to be unlocked on May 9, 2027 [8].

Core Insights - Recently, Lianyu Co., Ltd. signed a strategic cooperation agreement with Luoyang Aowite Precision Bearing Co., Ltd., becoming a major shareholder through strategic investment [1] - Luoyang Aowite focuses on precision bearings and has successfully replaced imports of high-end bearings like thin-walled crossed roller bearings, which have high technical barriers [1][2] Company Summary - Lianyu Co., Ltd. has strategically invested in Luoyang Aowite, which is a long-term stable supplier for many well-known domestic equipment manufacturing companies [1] - Luoyang Aowite specializes in thin-walled crossed roller bearings, a high-precision and high-rigidity bearing type with a complex manufacturing process [1][2] Industry Summary - Thin-walled crossed roller bearings play a crucial role in robotics, particularly in precision reducers, ensuring high precision and rigidity in rotational movements [2] - The demand for thin-walled crossed roller bearings is expected to grow rapidly due to the development of industrial robots, humanoid robots, high-end CNC machine tools, and semiconductor equipment, providing opportunities for domestic products to replace imports [2] - The market for thin-walled crossed roller bearings is currently dominated by international giants, but domestic manufacturers are making progress in developing high-precision grinding machines necessary for production [2] Investment Opportunities - Companies to watch include Lianyu Co., Ltd. (strategic investment in Luoyang Aowite), Guoji Precision Engineering, Guangyang Co., and Luoyang Hongyuan (unlisted) [3]