2025-11-07 01:28Summary of Minth's Conference Call Company Overview - Company: Minth - Industry: Automotive Parts Manufacturing - Established: 1992 - Core Business: Design, manufacturing, and sales of auto trims, decorative parts, body structural parts, and other auto parts - Production Facilities: Over 40 in China and overseas - Sales Composition (2024): - Trims & Metal Parts: 24% - Aluminum Parts: 21% - Plastic Parts: 25% - Battery Housing: 23% - Others: 6% [10][11] Key Developments - Liquid Cooling Orders: - Announced new orders for liquid cooling systems for AI servers from two Taiwanese manufacturers, with deliveries starting by end-2025 [1][14] - This marks Minth's entry into the AI Data Center (AIDC) sector [1] - Expected revenue from liquid cooling for AI servers to be minimal in 2025, reaching RMB 200-300 million in 2026 [1] - Battery Housing Growth: - Anticipated sustained sales growth in Europe for battery housing, leveraging plants in Serbia and France [2] - NEV wholesale volume in Europe grew 37% YoY in August 2025 [2] - Minth holds over 30% market share in the European battery housing market, with European sales accounting for approximately 60% of total battery sales in 2024 [2] Financial Performance and Projections - Earnings Estimates: - EPS estimates for 2025/26/27 raised by 1%/2%/3% due to new liquid cooling orders [3][18] - New price objective (PO) set at HK$43, up from HK$36, reflecting confidence in business model transition [3][21] - Revenue and Profit Projections: - 2025E Revenue: RMB 26,277 million - 2026E Revenue: RMB 29,998 million - 2027E Revenue: RMB 33,580 million - 2025E Net Income: RMB 2,768 million - 2026E Net Income: RMB 3,430 million - 2027E Net Income: RMB 3,872 million [4][19] - Key Ratios: - Expected EPS growth of 19% in 2025 and 24% in 2026 [20] - Operating margin projected to improve to 15% by 2027 [20] Investment Rationale - Buy Rating: - Solid revenue growth from both traditional and new battery housing businesses [11] - Anticipated 17% earnings CAGR from 2025 to 2027 [11] - Expansion into various sectors including AI servers and humanoid robots [3][11] Risks and Considerations - Downside Risks: - Increasing trade tariffs from China and Mexico to the US - Volatile margins in overseas plants - Lower margins in the battery housing business - Foreign exchange volatility [27] Conclusion - Minth is positioned for growth with its expansion into AI server cooling systems and sustained momentum in battery housing sales. The company is expected to deliver strong earnings growth, supported by a diversified product portfolio and strategic market positioning. The new price objective reflects confidence in its evolving business model and potential for re-rating in the market.