Tuopu Group(SH:601689)2025-09-12 07:28Summary of Ningbo Tuopu Group (601689.SS) Conference Call Company Overview - Company: Ningbo Tuopu Group - Industry: Automotive components supplier - Current Rating: Downgraded to Neutral - 12-Month Price Target: Rmb68, implying a 2% downside from current price of Rmb69.14 Key Financial Highlights - 2Q25 Results: Revenue and net profit were 14% and 13% below expectations, respectively, primarily due to a 13% year-over-year decline in global sales volume from Tesla, a key customer [1][30] - Revenue Growth: Revenue growth in 1H25 was +6% year-over-year, down from +33% in 1H24 [4] - Net Income Estimates: Adjusted net income estimates for 2H25E-2027E were cut by 4%-13% due to expected continued decline in Tesla sales [1][30] - Market Performance: Tuopu's share price increased by 50% from August 15 to September 10, driven by auto subsidy resumption and Tesla humanoid robot updates [2] Industry Dynamics - NEV Market: The growth in the New Energy Vehicle (NEV) market is slowing, with expectations of a decline in wholesale/retail growth from over 30% in 2023-2024 to 20%+ in 2025E-2026E [11][30] - Tesla's Sales Volume: Tesla's global sales volume is projected to decline by 9% year-over-year in 2H25E, impacting Tuopu's revenue significantly [1][30] Customer Insights - Key Customers: Despite Tesla's decline, Tuopu reported resilient growth from other domestic customers like Geely, BYD, and Li Auto, with wholesale volumes growing by +47%, +31%, and +8% year-over-year in 1H25 [11] - Revenue Contribution: Tesla's revenue contribution to Tuopu is expected to decrease from 35% in 2024 to 27% in 2025E [6] Risks and Opportunities - Key Risks: - Sales volume from key customers may be better or worse than expected [3][26] - Pricing pressure from OEM customers could impact revenue and margins [3][28] - Adoption pace of new products may vary, affecting long-term revenue growth [3][27] - Opportunities: - Expansion to overseas customers, including partnerships with European and US automakers, is seen as a potential growth area, although it may take time to realize [12][30] Valuation and Market Sentiment - Current Valuation: Trading at 30x 12-month forward P/E, in line with historical averages, but further re-rating is considered difficult due to slowing NEV growth [15][30] - Market Expectations: Post-results, Bloomberg's consensus for 2025E and 2026E revenue and EPS was revised down by 3%-7% and 4%-6%, indicating that market expectations may be peaking [15][30] Conclusion - Investment Thesis: The company is facing challenges due to declining sales from its key customer, Tesla, and a slowing NEV market. While there are stable revenue streams from domestic customers and potential overseas expansion, the overall outlook remains cautious with a Neutral rating [30][32]