Group 1 - The core viewpoint of the article highlights that the ADAS (Advanced Driver Assistance Systems) is crucial for enhancing driving safety, prompting automotive companies to accelerate the adoption and upgrade of ADAS technology, which will further expand consumer demand [1] - The company has made a forward-looking layout in the field of ADAS with its active perception cleaning system, and some clients have already entered the designated phase, indicating a promising market outlook in the future high-level autonomous driving sector [1] - The ADAS technology is expected to become one of the important growth drivers for the company in the future [1]

Group 1: Company Overview - The company primarily engages in the research, production, and sales of automotive motor technology and fluid technology products, aiming to become a global leader in automotive motor technology solutions [2][3] - The business is structured into four main units: motor technology (motor and electric module) and fluid technology (driving vision cleaning systems and thermal management systems) [3] Group 2: Cost Advantages - The core cost advantage stems from vertical integration in the supply chain, enhancing the overall competitive edge [4] - Standardized and platform-based product strategies improve quality and reduce costs through modular production and high component interchangeability [4] - High self-manufacturing rates of core components allow better cost and quality control, enhancing product competitiveness and gross margins [4] Group 3: Technology and Innovation - The company has developed harmonic magnetic field motor technology, which offers higher power density and material cost savings compared to traditional motors [5][6] - Multiple invention patent applications have been submitted, establishing a technological moat and competitive advantage in the harmonic motor field [5] Group 4: Market Trends and Opportunities - The ADAS (Advanced Driver Assistance Systems) market is expected to grow, driving demand for the company's ADAS active perception cleaning systems [6] - The company has established a strong position in the cleaning business, benefiting from early market entry and technological similarities [7] Group 5: Client and Market Expansion - The rapid development of the electric vehicle industry has opened new competitive fields, with the company actively expanding its client base in this sector [8] - The company has a significant number of quality clients in the new energy vehicle sector and is focused on deepening existing relationships while pursuing new orders [8] Group 6: Global Expansion - Since 2022, the company has accelerated its global production base layout, establishing facilities in the U.S. and Thailand [9][10] - The U.S. facility, with an investment of no more than $1.5 million, focuses on cleaning system products and related new product development [10] - The Thailand facility, with an investment of no more than 200 million RMB (or equivalent in USD), will expand its product offerings as client orders increase [10]

Group 1: Company Overview - The company primarily engages in the research, production, and sales of automotive motor technology and fluid technology products, aiming to become a global leader in automotive motor technology solutions [3] - The main production base is located in Ningbo, with additional production facilities in locations such as Qingyuan, Shenyang, Wuhan, the USA, and Thailand to serve clients more effectively [3] Group 2: Financial Performance - In the first three quarters of 2025, the company achieved a revenue of 680 million CNY, a year-on-year decline of 3.47% [3] - The net profit attributable to shareholders was 129 million CNY, down 21.07% year-on-year, while the net profit excluding non-recurring items was 115 million CNY, a decrease of 25.34% [3] Group 3: Business Development Plans - The strategic focus is on consolidating existing business while preparing for long-term breakthroughs, with new products being developed to diversify the business matrix [4] - The company aims to enhance the value of existing motor products and optimize the customer structure in the cleaning business [4] Group 4: Future Trends and Market Position - The ADAS (Advanced Driver Assistance Systems) cleaning system is expected to drive demand as automotive companies accelerate the adoption of ADAS technology, presenting a significant growth opportunity for the company [5] - The company has a competitive edge in the cleaning business due to its early market entry and technological expertise, with a low overall market penetration rate and few competitors [6] Group 5: Growth Drivers - The growth in traditional cleaning business relies on acquiring new customers, with a focus on expanding the market share [8] - The company plans to gradually deploy a production capacity of 250,000 units per year for the gas-liquid mixed active cleaning system, which is expected to significantly enhance business performance [8] - In the motor sector, the company continues to expand its product range, particularly in the automotive four-door and two-hatchback segments, which have established a good reputation and market share [8]

Investment Rating - The report assigns a "Buy" rating for the company [4]. Core Insights - Hengshuai Co., Ltd. is a leading enterprise in automotive micro-motors and cleaning systems, with steady global expansion. The company primarily focuses on automotive motor technology and fluid technology. In 2024, it is projected to achieve revenue of 960 million yuan, a year-on-year growth of 4.21%, with a CAGR of 29.6% from 2020 to 2024. The net profit attributable to shareholders is expected to reach 210 million yuan, a year-on-year increase of 5.75%, with a CAGR of 34.2% during the same period [1][4][31]. Summary by Sections Automotive Micro-Motor and Cleaning System Leadership - Hengshuai Co., Ltd. has been deeply engaged in the automotive cleaning system and micro-motor industry since its establishment in 2001, continuously enhancing its product matrix and expanding its global footprint [21][22]. - The company has established subsidiaries in various locations since 2019, actively expanding its domestic and international customer base [21][31]. Growth in Automotive Electrification - The trend of automotive electrification is evident, driving rapid growth in the demand for automotive micro-motors. The average usage of micro-motors in mid-to-high-end electric vehicles is significantly higher than in traditional fuel vehicles [50][53]. - The global automotive micro-motor market is expected to reach 20.4 billion USD by 2031, with a CAGR of 3.1% from 2025 to 2031 [60][61]. Advancements in Automotive Intelligence - The report highlights the increasing penetration of intelligent driving technologies, with the demand for ADAS (Advanced Driver Assistance Systems) cleaning systems expected to grow as the number of sensors in vehicles increases [2][71]. - The company has made significant progress in developing ADAS active perception cleaning systems, having secured batch business designations from various clients [79]. Strategic Expansion into Humanoid Robot Motors - Hengshuai Co., Ltd. is strategically positioning itself in the humanoid robot motor market, which is projected to have a market space of 58.3 billion yuan by 2027. The company’s harmonic magnetic field motors are entering the industrial expansion phase, indicating potential growth in this sector [2][80]. Financial Projections - The company is expected to achieve net profits of 239 million, 294 million, and 389 million yuan from 2025 to 2027, representing year-on-year growth rates of 11.8%, 23.0%, and 32.4%, respectively [2][15]. - The projected revenue for the same period is expected to be 1.08 billion, 1.32 billion, and 1.71 billion yuan, with corresponding growth rates of 12.4%, 22.1%, and 29.3% [2][15]. Valuation - The report notes that Hengshuai Co., Ltd. has a lower PE valuation compared to comparable companies in the automotive micro-motor sector, with projected PE ratios of 37.2, 30.2, and 22.8 for 2025 to 2027 [15].

Group 1: Harmonic Magnetic Field Motor Technology - The harmonic magnetic field motor technology represents a fundamental transformation in the motor field, offering advantages such as lightweight design, significantly higher power density compared to traditional motors, and reduced axial current due to its unique magnetic field design [2][3] - The manufacturing precision and assembly complexity of harmonic magnetic field motors create higher barriers to entry, enhancing the company's competitive edge [3] Group 2: Robotics Business Development - The company has adopted harmonic magnetic field motor technology to provide customized solutions in the humanoid robot sector, which presents significant competitive advantages [4] - The robotics industry is seen as a major growth opportunity, potentially becoming the company's third growth curve [4] Group 3: Cleaning Business Applications - Traditional cleaning business shows limited demand for disruptive innovations, as existing technologies are mature and do not require significant changes in core technical indicators [5] - However, in advanced autonomous driving scenarios, the demand for intelligent and complex cleaning systems is increasing, with successful applications of the technology already in progress [5] Group 4: Profit Margin Predictions - The ADAS active perception cleaning system has a higher value compared to traditional systems, but initial production volumes are small, leading to higher shared costs that may impact overall cost structure [6] - Future profit margins will depend on market scale and production volume, with expectations of improved margins as production increases [6] Group 5: Industry Challenges and Opportunities - The electric motor market is expanding due to rising electrification demands and opportunities for domestic substitution, alongside emerging markets like robotics [7][8] - The company aims to continuously develop new products and expand into new markets and customers to strengthen its technological advantages and core competitiveness [8] Group 6: Capacity Expansion - The company has sufficient land and factory space to meet current capacity expansion needs, with capabilities to develop fully automated production lines based on product development progress [8] - This capacity allows the company to minimize restrictions on growth and shorten expansion cycles [8]

Group 1: Harmonic Magnetic Field Motor Technology - The company has developed harmonic magnetic field motor technology that utilizes harmonic magnetic fields, resulting in higher power density and significant material cost savings compared to traditional motors [2] - The technology has led to multiple patent applications, establishing a technological moat and competitive advantage [2] - Applications of this technology span both micro motors and large motors, with broad usage in industrial and automotive sectors [2] Group 2: Development and Application of Harmonic Magnetic Field Motor Technology - The harmonic magnetic field motor technology has been successfully applied in logistics systems and certain automotive motor products, gradually achieving mass production [3] - The technology shows competitive advantages in humanoid robots, with significant growth opportunities in this sector expected to become the company's third growth curve [3] Group 3: Future Growth Sources for Cleaning Business - The cleaning system business is primarily focused on the domestic market, with overseas markets showing substantial growth potential due to a solid customer base [4] - The company has a small market share in certain domestic automotive partnerships, indicating significant competitive space for future growth [4] - The cleaning system products are categorized into traditional cleaning systems and ADAS active perception cleaning systems, with the latter offering substantial market value increase [4] Group 4: Progress of ADAS Active Perception Cleaning System - The company has secured mass production projects for the ADAS active perception cleaning system with clients such as Waymo and Meituan [5] - Plans are in place to configure an annual production capacity of 250,000 sets of the cleaning system, with some production to be located in Thailand [5] Group 5: New Motor Development and Future Investment Plans - The company has a strong technical foundation in motor development and has achieved mass project designation in the EPB sector, marking a significant step in expanding its motor offerings [6] - Future plans include diversifying investment strategies through mergers, acquisitions, and strategic partnerships to enhance collaboration across the supply chain [6]

Business Structure - The company's core business consists of cleaning services (46.3% revenue share) and motor products (45.6% revenue share), with other businesses accounting for 8.1% [2][3]. Motor Product Development - The company plans to expand its motor product offerings, focusing on new categories such as in-vehicle motors and chassis motors, with significant investments in high-torque harmonic brushless motors and various automotive systems [3][4]. Competitive Landscape - The traditional cleaning business faces intense competition and price wars, making profitability challenging for new entrants. In contrast, the micro-motor market is currently stable with high technical barriers, limiting the number of competitors [3][4]. ADAS System Progress - The company has secured mass production projects for its ADAS sensor cleaning systems with clients like Waymo and Meituan, targeting an annual production capacity of 250,000 units, with some production planned in Thailand [4]. Technology Pathways - The ADAS sensor cleaning products utilize various cleaning methods, including liquid, gas, and gas-liquid mixed cleaning, with the latter offering superior cleaning performance despite higher costs due to complex structures [4]. Thermal Management Business - The company has developed a range of thermal management products, including electronic circulation pumps and valves, with rapid growth in production for North American clients [4]. Strategic Expansion - The company is actively diversifying its business beyond the automotive sector, exploring opportunities in industrial automation and humanoid robotics to create new market spaces for long-term growth [4].

Group 1: Company Growth Drivers - The main growth driver for the company's traditional cleaning business is the acquisition of new customers, as the domestic market share is already established and unlikely to change significantly in the short term [2] - The company plans to gradually deploy a production capacity of 250,000 sets per year for the gas-liquid mixed active cleaning system based on the progress of mass production [2] - In the electric motor sector, the company has accumulated a good reputation and market share in the automotive four-door and two-cover areas, with ongoing expansion of new electric motor products expected to create additional market space [3] Group 2: Market Competition Landscape - The small motor market is tightly packed, making it difficult for too many competitors to enter, resulting in a less competitive environment [4] - High technical barriers in small motor technology development pose significant challenges for component manufacturers, shaping the competitive landscape [4] - The narrow market scenarios targeted by small motors lack sufficient attractiveness to draw in numerous competitors [4] Group 3: Robotics and ADAS Developments - The company is focusing on humanoid robot opportunities and has engaged with overseas clients, creating samples based on its technical solutions [5] - Plans to accelerate domestic customer expansion and participate in industry exhibitions to showcase technological achievements in humanoid robots are underway [5] - The ADAS active perception cleaning system is positioned as a key growth driver, with existing projects secured with clients like Waymo and Meituan [6] Group 4: New Energy Business and Revenue Contribution - The company is actively integrating existing technologies with the new energy vehicle sector, with projected revenue from new energy vehicle components reaching 280.82 million yuan in 2024, accounting for 29.54% of the main business revenue [6] - The electric motor sector continues to expand due to rising electrification demands and significant opportunities for domestic replacements [6] Group 5: Challenges and Opportunities in the Electric Motor Industry - The electric motor market is expanding with increasing demand for electric vehicles, presenting both challenges and opportunities [6] - The rise of new markets, such as robotics, is seen as a future growth area for the electric motor industry [6] - The company aims to continuously develop new products and expand into new markets and customers to enhance its technological advantages and core competitiveness [6]

Group 1: Business Outlook - The company's cleaning business is divided into traditional cleaning and ADAS cleaning systems, with a strong market share in traditional cleaning but facing competitive pressure for short-term growth [2] - The ADAS cleaning system business is expected to have a promising market outlook as L3+ level autonomous driving technologies, such as Robotaxi and unmanned delivery vehicles, become industrialized [2] Group 2: Production Capacity and Clientele - The company has secured mass production projects for ADAS cleaning systems with clients like Waymo and Meituan, planning to produce 250,000 units per year, with some capacity allocated to Thailand [3] - Production capacity will be adjusted based on client demand to optimize regional production layouts and enhance market responsiveness [3] Group 3: Motor Business Expansion - The company plans to expand its motor business by developing new electric motor categories and fluid products, focusing on four business units to create a diverse product range [3] - Recent growth in the motor business is attributed to a focus on vehicle body applications, with future plans to target in-car and chassis motor varieties [3] Group 4: Impact of Tariff Policies - The company monitors overseas market tariff policies and economic changes closely, with direct sales to the U.S. accounting for only 2.7% of total business in 2024, minimizing tariff impact [4] - The company employs EXW and FOB pricing strategies for exports, further reducing the effect of rising tariffs [4] Group 5: Profit Margin Trends - The company's gross margin is expected to decline in 2024 due to accounting changes, competitive pricing pressures, and raw material cost fluctuations [5] - Long-term cost competition remains a core concern in the automotive industry, with the company aiming to maintain stable and favorable gross margins through cost advantages and core competencies [5] Group 6: Future of ADAS Systems - The ADAS system is crucial for enhancing driving safety, prompting automakers to accelerate the adoption and upgrade of ADAS technologies, which will expand consumer demand [5] - The company's proactive positioning in the ADAS cleaning system market is anticipated to drive significant growth in the future [5]