SIASUN(SZ:300024)2025-07-28 01:42Summary of the Conference Call on China's Auto Parts Sector Industry Overview - The conference call focused on the China Auto Parts Sector, particularly the earnings performance of suppliers in Q225 and the evolving client mix within the industry [2][3]. Key Points and Arguments Revenue Growth Expectations - Suppliers are expected to post encouraging revenue growth for Q225, driven by new model launches and an increasing content value per vehicle (CPV) [2][3]. - Fuyao is projected to achieve 10-15% YoY revenue growth due to overseas market share expansion and rising domestic average selling prices (ASP) [3]. - Tuopu and Sanhua are forecasted to deliver mid-to-high single-digit YoY revenue growth, with Tuopu expected to achieve 20%-plus QoQ revenue growth from new orders [3]. Margin Concerns - There are significant margin concerns due to ongoing price competition in the auto parts sector, with most companies experiencing a decline in gross margins over the past two years [4]. - Although raw material prices have decreased, which could support margins, headwinds remain from price competition and potential cost increases from new plant ramp-ups [4][15]. Client Mix Evolution - The client mix is evolving, with Xiaomi, Li Auto, and AITO expected to become increasingly important for suppliers from FY24 to FY26E [2][7]. - Revenue contributions from these companies are projected to significantly increase, with some suppliers expected to derive 35-40% of their 2026 revenue from them [7]. Upcoming Catalysts - Key catalysts for the auto parts sector in H225 include: - Delivery of orders for Xiaomi YU7 - Launch of Li Auto's i8 and Tesla's Model Y L - Strong sales from Leapmotor [5]. - Concerns exist that the Xiaomi YU7 could compete with the Tesla Model Y, but it is believed that the YU7 orders will largely offset any potential decline in Model Y sales [5][24]. Humanoid Robotics Supply Chain - The auto parts suppliers are making strides in the humanoid robotics space, leveraging their existing technology and relationships with companies like Tesla and JD.com [8][58]. - Despite a reduction in Tesla's humanoid robot sales volume guidance, there are still catalysts for growth in this area [8]. Stock Implications - The launch of new models and developments in humanoid robotics are expected to act as share price catalysts for supply chain companies in the short term [9]. Additional Important Insights - The analysis indicates that Desay SV is expected to benefit the most from the Xiaomi YU7 launch, with a projected 16.6% revenue increase in 2026E [29]. - The report highlights the potential for Xiaomi YU7 orders to offset revenue declines from existing customers, particularly for suppliers with higher CPV from the YU7 [24][28]. - Risks to the auto parts sector include demand dampening due to lower auto production, price pressure from automakers, and potential product recalls due to quality issues [61]. This summary encapsulates the key insights and projections discussed during the conference call, providing a comprehensive overview of the current state and future outlook of the China Auto Parts Sector.