China Autos & Shared Mobility_ From Auto to Humanoid Robot Suppliers

Summary of Conference Call on China Autos & Shared Mobility Industry Overview - The focus is on the automotive and humanoid robot supply chain in China, particularly suppliers for Tesla and their potential to transition from automotive components to humanoid robotics [1][2][9]. Key Companies Discussed 1. Tuopu (601689.SS) - Positioned as the best candidate for humanoid robot supply due to strong existing businesses and potential for actuator assembly [1][2]. - YTD share price increase of 32-42% [2]. - Earnings estimates for 2025-26 raised by 12-19% due to stronger EV customer volumes [4][30]. - Targeting over 30% YoY growth in 2025, with revenue from humanoid actuator assembly projected to significantly increase [28][29]. 2. Sanhua (002050.SZ) - Expected to grow slower than Tuopu, with a forecasted 15% earnings growth in 2025 [4][31]. - Price target raised by 38% to Rmb29, reflecting stronger-than-expected cooling parts revenue [34]. 3. Xusheng (603305.SS) - Downgraded to Underweight due to increasing competition and declining revenue [4][35]. - Revenue fell 8% YoY in 9M24, with earnings down 43% YoY [35]. - Price target raised by 30% to Rmb13, but still under pressure [38]. 4. Recodeal (688800.SS) - Also rated Underweight, facing margin pressure despite a 53% YoY revenue growth in 9M24 [39][42]. - Price target raised by 131% to Rmb37, but existing EV business remains under pressure [42]. Market Dynamics - The market views Tesla's EV suppliers as potential candidates for humanoid robot supply, with significant share price rallies observed [2][10]. - Despite no confirmed orders, commercialization of humanoid robots is anticipated in 2025, with major players planning to produce thousands of units [2][9]. Financial Performance and Valuation - Tuopu: - Preliminary 4Q24 earnings between Rmb621-921 million, up 12% to 66% YoY [27]. - Revenue from auto electronics grew 906% YoY in 2024 [27]. - Price target increased by 45% to Rmb80 based on DCF valuation [30][50]. - Sanhua: - Management guided for 2025-30 CAGRs of 20% in EV parts and 5-10% in cooling parts [31]. - Xusheng: - Revenue and earnings under pressure, with a target of 30% YoY growth in 2025, which is considered challenging [36]. - Recodeal: - Revenue growth of 53% YoY but earnings growth only 11% YoY due to margin pressure [39]. Investment Risks and Considerations - Margin pressure from EV price cuts and tariff risks are highlighted as potential concerns for investors [3]. - The valuations of humanoid suppliers have surged above their 4-year averages, raising questions about whether they are too stretched [3][15]. - The potential for downside exists if competition intensifies or if the expected growth in humanoid robotics does not materialize as projected [56][61]. Conclusion - The automotive supply chain in China is transitioning towards humanoid robotics, with key players like Tuopu positioned to benefit significantly. However, investors should remain cautious of market dynamics, competitive pressures, and valuation concerns as the industry evolves.