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 Viewpoint - Junsheng Electronics is officially launching its Hong Kong IPO, aiming to become the first domestic "automotive + robotics Tier 1" dual-listed company in both A-share and H-share markets, thereby expanding its international capital market financing channels [1] Group 1: IPO Details - The global issuance scale for Junsheng Electronics is set at 155 million H-shares, with 15.51 million shares allocated for public offering in Hong Kong and approximately 140 million shares for international offering [1] - The maximum issue price is set at HKD 23.60 per share, with CICC and UBS serving as joint sponsors for the IPO [1] Group 2: Fund Utilization - The funds raised from the IPO will focus on three core areas: R&D and commercialization of automotive intelligent solutions and cutting-edge technologies, upgrading intelligent manufacturing and optimizing supply chains, and expanding overseas business and potential investments and acquisitions [2] - Notable cornerstone investors include JSC, Ningbo New Quality, Jump Trading, Zhongding Capital, China Post Fund, Vandi, and Fidelidade, providing strong support for the issuance [2] Group 3: Business Performance - Junsheng Electronics has shown continuous improvement in profitability, with a projected revenue of approximately CNY 55.9 billion and a net profit of about CNY 1.28 billion for 2024, reflecting a 1.8 percentage point increase in gross margin to 16.3% [3] - For the first half of 2025, revenue is expected to reach approximately CNY 30.35 billion, a year-on-year increase of 12.07%, with a net profit of CNY 708 million and an overall gross margin of 18.2%, up 2.6 percentage points [3] Group 4: Globalization Strategy - Junsheng Electronics has established over 25 R&D centers and 60 production bases across major automotive production and sales regions globally, achieving a 74.7% share of overseas revenue by April 30, 2025 [3] - The company serves over 100 automotive brands worldwide, including the top ten automakers in China and globally, and has been recognized as a leading multinational company for four consecutive years [3] Group 5: Industry Position and Innovations - As the automotive industry accelerates towards intelligent electrification, Junsheng Electronics has developed a range of integrated solutions in smart cockpit, intelligent driving domain controllers, and smart connectivity, achieving significant breakthroughs [4] - The company has secured substantial orders, including over one million units for regional controllers and approximately CNY 15 billion in lifecycle orders for cockpit integration [4] - Junsheng Electronics has invested in semiconductor companies to enhance its autonomous control capabilities and maintains an annual R&D investment exceeding CNY 3 billion, totaling over CNY 24 billion since 2018 [4] Group 6: Robotics Business - The robotics sector is positioned as a new growth highlight for Junsheng Electronics in 2025, with the company having developed key components and solutions for robotics [5] - Collaborations with leading robotics firms have led to successful product deliveries, marking a transition from R&D to commercial implementation [5]