Investment Rating - The report maintains a "Positive" investment rating for the industry [6] Core Insights - The EMB (Electro-Mechanical Brake) system is identified as a key foundation for developing intelligent chassis and achieving active safety in vehicles, with mass production expected to begin in 2026 [1][3] - The EMB system features a decoupled hardware and software architecture, eliminating components like the iBooster and hydraulic lines, allowing for direct control of braking force at the wheel hub, which meets the rapid and precise braking demands of Advanced Driver Assistance Systems (ADAS) [3][4] - The domestic EMB market is projected to grow at a CAGR of over 70% from 2026 to 2030, with an expected market size exceeding 11.5 billion yuan by 2030 [4][48] Summary by Sections 1. Overview of Brake Technology Development - Traditional fuel vehicles used vacuum boosters for braking, which are expected to be phased out due to their complexity and slow response times [10] - The transition to electric vehicles has led to the adoption of electric vacuum pumps, but they have not been widely accepted due to issues like noise and short lifespan [11] - In the era of intelligent and connected vehicles, both EHB (Electro-Hydraulic Brake) and EMB systems are expected to develop concurrently, with EMB being more suitable for future intelligent chassis technology [13][14] 2. Introduction to EMB Line Control Braking - EMB achieves soft and hard decoupling by directly controlling the braking force at each wheel through electrical signals, enhancing response time and efficiency [27] - The EMB system includes electronic brake calipers, controllers, and various sensors, making it the control center for multiple safety algorithms [27] - The commercial application of EMB in commercial vehicles is anticipated to be faster than in passenger vehicles due to higher demands for braking performance and safety [37] 3. Market Size and Growth Potential - The EMB market is expected to see significant growth, with projections indicating a market size of over 11.5 billion yuan by 2030, driven by the rapid development of intelligent connected vehicles [48][51] - The report outlines a detailed forecast for EMB penetration rates, estimating a market size of approximately 1.42 billion yuan in 2026, with a projected CAGR of over 70% from 2026 to 2030 [51][52] 4. Participating Companies - Several domestic companies are accelerating their layout in the EMB market, with mass production timelines generally targeting 2025-2026 [52] - Key players include traditional brake system manufacturers like Bosch and Continental, as well as domestic firms such as Berteli and Asia-Pacific Co., which are preparing for mass production [52][54] - Startups like Coordinate Systems and Huasheng Ruili are also making strides, with some already achieving prototype development and testing [53][54]

Investment Rating - The investment rating for the company is "Outperform the Market" [5][25][29] Core Views - The company achieved a net profit growth of 304% year-on-year in the first half of 2025, with revenue reaching $2.242 billion, a 7% increase compared to the previous year [1][7] - The company is experiencing accelerated recovery in overseas profits, with significant improvements in profitability driven by cost reduction and efficiency enhancement [2][9] - The company is positioned as a leading player in the EPS market, with a market share of over 16% in China and strong partnerships with over 60 global OEM customers [12][25] Financial Performance - In the first half of 2025, the company reported a gross margin of 11.55%, up 1.50 percentage points year-on-year, and a net margin of 2.81%, an increase of 2.05 percentage points [2][9] - The company's revenue forecast for 2025 is $4.487 billion, with projected net profits of $136 million, reflecting a 120.9% increase compared to 2024 [4][27] - The earnings per share (EPS) is expected to grow from $0.05 in 2025 to $0.09 in 2027, indicating a positive growth trajectory [4][27] Market Position and Strategy - The company has established a solid position in the R-EPS segment, capturing a 20% market share in the global EPS market, and is expanding its presence in the domestic market by partnering with local automotive manufacturers [3][12] - The company is actively developing new products in the line control steering and braking systems, with a focus on enhancing its technological capabilities and expanding its product offerings [19][22] - The company has received multiple orders for its SbW technology, indicating strong demand and recognition in the market [18][21]