Summary of Tuopu's 2Q25 Earnings Call Company Overview - **Company**: Ningbo Tuopu Group Co., Ltd. - **Industry**: Autos & Auto Parts - **Ticker**: 601689 CH - **Market Cap**: RMB105.6 billion ($14.8 billion) [8] Key Financial Results - **2Q25 Revenue**: RMB7.2 billion, up 10% YoY [1][2] - **2Q25 Earnings**: RMB729 million, down 10% YoY [1][2] - **Gross Profit Margin (GPM)**: 19.3%, down 0.6/1.1 percentage points QoQ/YoY [1][2] - **D&A Cost to Revenue Ratio**: Estimated to have risen to approximately 7% in 1H25, up 1 percentage point YoY [2] Management Outlook - **Revenue Growth Target**: Aiming for 20% YoY revenue growth in 2026 [1][2] - **Long-term Growth Expectation**: Management expects double-digit growth from 3Q25 through 2030, supported by contributions from major clients like Xiaomi, Seres, and Geely [2] - **2025 Revenue Target**: RMB30 billion [2] Business Expansion - **Overseas Markets**: Focus on Europe and the US as key growth drivers, with major customers including Ford, GM, Stellantis, Volkswagen, BMW, and Mercedes [3] - **Production Capacity**: Plans for a second phase at the Poland factory due to increased demand from Mercedes and BMW; Thailand plant aimed at humanoid robots and supporting local Chinese OEMs like BYD and Chery [3] Humanoid Robots Development - **Current Production Challenges**: Inefficiencies in producing humanoid robot actuators due to a wide variety of specifications (48 in total) and lack of full automation [4] - **Future Orders**: Expected to start receiving orders for the next-generation Optimus in 1Q26 [4] - **R&D Investment**: Annual investment of approximately RMB100 million with a robotics team of 138 members [4] Liquid Cooling Business - **Market Potential**: Strong potential identified in transitioning from automotive thermal management to liquid cooling solutions for AI data centers [5] - **Core Products**: Cooling plates and CDU components [5] - **Order Backlog**: Liquid cooling order backlog has reached RMB1.7 billion [5] Valuation and Price Target - **Price Target**: RMB72.5 based on a 35x 2026E P/E [6][14] - **Current Price**: RMB62.61, representing a potential upside of 16% [8] Financial Estimates - **Revenue Estimates**: - 2025: RMB29.04 billion - 2026: RMB33.18 billion - 2027: RMB39.85 billion [7] - **Net Profit Estimates**: - 2025: RMB3.06 billion - 2026: RMB3.49 billion - 2027: RMB4.25 billion [7] Risks - **Potential Risks**: Lower-than-expected NEV sales and slower development of humanoid robots [24] Sustainability Goals - **Carbon Neutrality Targets**: Aiming to achieve carbon peak by 2030 and carbon neutrality by 2060 in line with China's decarbonization goals [17] Conclusion - **Investment Recommendation**: Maintain Buy rating with a focus on growth opportunities in both the automotive and emerging technology sectors, particularly humanoid robots and liquid cooling solutions [6][11]