Investment Rating - The investment rating for the company is "Outperform the Market" [5][31][32] Core Insights - The company achieved a revenue of 2.6 billion yuan in the first half of 2025, representing a year-on-year growth of 29.75%, and a net profit of 201 million yuan, which is a 92.12% increase year-on-year [1][6] - The company is expanding its automotive electronic control systems, with a compound annual growth rate of 32% from 2020 to 2024, and has initiated 114 new projects in the first half of 2025, with 55 related to electronic control systems [2][22] - The company is actively expanding its global presence, with overseas revenue currently around 3%, and is accelerating the construction of a production project in Morocco [2][30] - The company is enhancing its smart business initiatives, focusing on autonomous driving technologies and integrated solutions for electric vehicles [3][27] Financial Performance and Forecast - The company expects revenues to grow from 3.87 billion yuan in 2023 to 7.18 billion yuan in 2027, with a net profit forecasted to increase from 97 million yuan in 2023 to 625 million yuan in 2027 [4][33] - The net profit margin is projected to improve significantly, with an EBIT margin expected to rise from 3.5% in 2023 to 9.8% in 2027 [4][33] - The earnings per share (EPS) is anticipated to grow from 0.13 yuan in 2023 to 0.85 yuan in 2027 [4][33] Business Expansion and Client Base - The company has a diverse client base, including major domestic and international automotive manufacturers, and has entered procurement platforms for companies like Volkswagen, General Motors, and Honda [27][28] - The company has secured multiple contracts for new projects, including significant orders from leading automotive groups, which are expected to contribute substantial revenue in the coming years [25][31]

Core Viewpoint - The development of electric smart vehicles is significantly transforming traditional automotive components, particularly in suspension and chassis systems, with a growing focus on new components like Electro-Mechanical Brakes (EMB) [2][3]. Company Overview - Jingxi Zhixing, formerly known as Jingxi Heavy Industry, was established in 2009 through the acquisition of Delphi's global suspension and brake business. It was rebranded in 2025 and is a rare Chinese-controlled global automotive parts company with multiple R&D and production bases in China, North America, and Europe [3]. - The company specializes in advanced products such as magnetorheological suspension systems, air suspension, and EMB, leveraging its prior experience in traditional hydraulic braking systems [3]. EMB Technology Insights - EMB operates by converting electrical signals into mechanical braking force using motors, reducers, and ball screw mechanisms, differing from traditional hydraulic systems. It offers high response speed and control precision but faces challenges like thermal decay and electronic compatibility [5][8]. - The demand for EMB is driven by the need for high performance in electric vehicles, which require precise and efficient braking systems due to their heavier weight and advanced driving features [8]. Market Dynamics - The transition from hydraulic to EMB systems presents technical challenges, including high costs, which currently limit EMB adoption to high-end models. Many manufacturers are still using a mix of braking systems [9][12]. - The competitive landscape for EMB is intensifying, with several players entering the market. Jingxi Zhixing believes its extensive experience in braking systems provides a competitive edge that is difficult for newcomers to match [11][12]. Production and Commercialization Challenges - The high initial investment and long development cycles for EMB technology pose significant barriers to rapid commercialization. The company estimates that the development costs could reach several hundred million yuan over three years, with a cautious approach to mass production timelines [12]. - Jingxi Zhixing anticipates that EMB and hydraulic systems will coexist for at least the next decade, with significant cost reductions expected in the production of non-caliper components within 5 to 7 years [12]. Future Outlook - The company is optimistic about the potential of EMB but remains cautious about the timeline for mass production, predicting that overseas clients may see production by 2029, while domestic clients might achieve it by 2026 [12].