Summary of Key Points from the Conference Call Industry Overview - The focus is on the humanoid robot industry in China, highlighting key developments and implications for specific companies, particularly Hengli Hydraulic and UBTECH. Company Highlights Hengli Hydraulic (601100.SS) - **Supply Chain Entry**: Hengli Hydraulic confirmed its entry into the leading US humanoid robot supply chain, becoming a component supplier for a major US humanoid robot manufacturer [1][2]. - **Competitive Advantages**: The company's strengths include a robust R&D team sourced from a leading European ball screw/bearing firm and a cost advantage achieved by replacing grinding machines with lathe machines [2]. - **Revenue Projections**: Estimated humanoid robot revenue for Hengli is projected to be between Rmb150 million and Rmb200 million in 2026, which would represent 1%-2% of total revenue [2]. - **Valuation**: The target price for Hengli is set at Rmb105.0, based on a P/E ratio of 43x for 2025E, reflecting its average P/E since 2021 [9]. UBTECH (9880.HK) - **Order Acquisition**: UBTECH secured an additional Rmb143 million order from the Jiangxi Jiujiang humanoid robot data collection and training center, bringing total orders to Rmb1.3 billion year-to-date [1][7]. - **Standardization Committee Membership**: Key personnel from UBTECH, including CTO Dr. Xiong Youjun, were appointed to the MIIT's Humanoid Robot Standardization Technical Committee, which is seen as a validation of UBTECH's R&D capabilities [1][2]. - **Manufacturing Capacity**: UBTECH's assembly line in Shenzhen has a daily capacity of 10-15 humanoid robots, with plans to reduce costs by making structural parts lighter [5]. - **Valuation**: The target price for UBTECH is set at HK$155.0, based on a P/S ratio of 23x for 2026E [13]. Regulatory Environment - The NDRC indicated plans to establish a mechanism in the 15th Five-Year Plan to limit the proliferation of homogeneous humanoid robot products, which could lead to a healthier supply-demand balance in the market [1][2]. Competitive Landscape - The report ranks the companies in the humanoid robot space as follows: Hengli > Leader Drive (LD; 688017.SS) > UBTECH, indicating a preference for Hengli due to its valuation and growth potential [1][2]. Risks - **Hengli**: Risks include weaker demand for excavator components, reduced profitability from production scale, and lower-than-expected gross profit margins [10]. - **Leader Drive**: Risks involve slower growth in the automation market, increased competition, higher raw material costs, and lower contributions from humanoid robots [12]. - **UBTECH**: Risks include weaker-than-expected revenue growth, slower humanoid robot development, and higher R&D costs impacting profitability [14]. Conclusion - The humanoid robot industry in China is experiencing significant developments, with positive implications for Hengli Hydraulic and UBTECH. The regulatory environment is evolving, which may impact market dynamics and competition.

Summary of Humanoid Industry Conference Call Industry Overview - The humanoid industry is experiencing strong investor interest and rapid acceleration, with aggressive targets set for 2026. However, near-term hurdles must be addressed before realizing long-term potential [1][2][3] - The industry is awaiting verification of commercialization to unlock significant long-term potential [1][3] Key Insights - **Strong Order Intake in China**: In the second half of 2025, integrators in China announced orders exceeding Rmb2 billion (~US$300 million) across three key areas: industrials, commercial services, and data collection centers, primarily government-backed projects [8][46] - **Delivery Challenges**: Many announced orders may not be completed this year, with some categorized as "framework orders" that have low execution certainty [8][46] - **Reality vs. Expectation**: Companies have set aggressive shipment targets for 2026, with estimates reaching up to 100,000 shipments. However, conservative estimates suggest limited near-term growth due to working capability constraints [8][9] - **Government Support**: The Chinese government is pushing for humanoids as a strategic emerging sector, with over 90% component localization in the supply chain, which is expected to support gradual commercialization [8][9] Company Developments - **Tesla**: Preparing to expand Gigafactory Texas for manufacturing Optimus, with an anticipated annual capacity of 10 million units [8] - **Xpeng**: Showcased its Iron robot, aiming for mass production by the end of 2026 [8] - **Hon Hai**: Plans to deploy humanoid robots at its Houston plant, targeting 1Q26 [8] - **UBTech**: Plans to raise US$400 million through a share placement for acquisitions and investments [29] - **Dobot**: Completed a US$100 million share placement for investment and acquisition opportunities [29] Market Performance - The equal-weighted Humanoid 100 index has increased by 22.7% since its inception on February 6, 2025, outperforming the S&P 500 and MSCI Europe but underperforming MSCI China and Korea [9] - The China Humanoid Value Chain index was down 8.4% in November but up 61.5% year-to-date [9] Policy Developments - The Ministry of Industry and Information Technology (MIIT) has formed a Standardization Technical Committee for humanoid robots to develop and implement industry standards [54][57] - The National Development and Reform Commission (NDRC) has warned against market overcrowding, emphasizing the need for a regulatory framework and support for technology advancement [54][57] Adoption and Technological Advancements - **Figure AI**: Announced that its humanoid has participated in the production of 30,000 BMW vehicles [36] - **Ubtech**: Expects production capacity for industrial humanoid robots to reach 5,000 units by 2026 [36] - **Unitree**: Launched its first wheeled humanoid robot, G1-D, aimed at data collection and training [37] - **1X Technologies**: Made its NEO humanoid robot available for pre-order, with deliveries expected in 2026 [37] Conclusion - The humanoid industry is poised for growth, driven by strong government support, technological advancements, and increasing investor interest. However, challenges related to order execution and market saturation must be navigated to realize its full potential [1][54][57]

Summary of Nari Technology - A Conference Call Company Overview - **Company**: Nari Technology - A - **Industry**: Power Equipment and Utilities Key Highlights 1. **New Order Growth**: - New order growth maintained at **20%** for the first 11 months of 2025, consistent with the growth rate in the first nine months of 2025. Strength noted in orders from the ESS (Energy Storage Systems) and renewables sectors [2][4][5] 2. **Overseas Revenue Contribution**: - Overseas ESS revenue accounted for approximately **60%** of total ESS revenue, with a **140%** year-over-year growth in overseas revenue. This contributed to **10%** of total revenue in the first half of 2025 [4][6] 3. **Expense Control**: - Management emphasized stringent control over selling, general, and administrative (SG&A) expenses, forecasting that SG&A growth will be much lower than revenue growth this year and in the coming years. R&D spending is expected to remain stable at around **6-7%** of revenue [6][7] 4. **Grid Capital Expenditure Focus**: - Key focus areas for grid capital expenditure during the 15th Five-Year Plan (FYP) include investments in UHV (Ultra High Voltage), power dispatch systems, ESS, and micro-grids. The State Grid aims to enhance its capacity to dispatch an additional **200GW** of renewable power annually [6][7] 5. **ESS Revenue Guidance**: - Management guided for over **Rmb4 billion** in revenue from ESS products, with overseas revenue contributing around **60%** of this total. The company specializes in ESS integration, offering products such as battery management systems and energy management systems [4][5] 6. **Technological Edge**: - Nari Technology is noted for its understanding of grid connections and automation, providing a competitive advantage in the control and monitoring of ESS systems. However, margins in this sector are currently low, ranging from **15-20%** due to intense competition [5][6] 7. **Investment Thesis**: - The investment thesis is based on expected benefits from policy tailwinds, including stronger renewable installations and grid capex driven by China's 2035 renewable capacity target and plans to double energy storage capacity by 2027 [7][8] 8. **Valuation and Price Target**: - The price target for December 2026 is set at **Rmb28.50**, based on a projected **22x** P/E ratio for 2027, implying a **4.1x** FY26E P/B and a **2.5%** dividend yield [8] Risks - Potential downside risks include lower-than-expected grid capex, margins, and UHV investments, which could impact the company's performance and valuation [9] Conclusion - Nari Technology is positioned to capitalize on growth in the ESS and renewables sectors, with a strong focus on expense control and strategic investments in grid technology. The company maintains an Overweight rating with a positive outlook based on anticipated policy support and market trends [2][7][8]

Summary of Leader Drive (688017.SS) Conference Call Company Overview - **Company Name**: Leader Drive (LD) - **Industry**: Robotics and Automation - **Specialization**: Production and sale of precision reducers, including harmonic reducers and mechatronic actuators for various sectors such as industrial robots, service robots, CNC machine tools, aerospace, and medical equipment [doc id='19'][doc id='20']. Key Points and Arguments Financial Performance and Forecasts - **Earnings Forecasts**: 2025/26E earnings forecasts raised by 10%/18% respectively, with a target price (TP) increase of approximately 7% to Rmb187.0 [doc id='1'][doc id='3']. - **Net Profit Growth**: Expected net profit for 4Q25E to increase by 11 times YoY to Rmb26 million from a net loss of Rmb3 million in 4Q24 [doc id='1']. - **Revenue Projections**: Anticipated revenue growth of 49% YoY to Rmb166 million in 4Q25E, driven by increased shipments of humanoid and industrial robots [doc id='1']. Product and Market Insights - **Humanoid Robot Growth**: Humanoid robot product shipments expected to grow exponentially in 2026, potentially accounting for ~40% of total revenue by 2026E [doc id='2']. - **Industrial Robot Shipments**: Projected growth of 20%-30% YoY in industrial robot shipments due to continuous market share gains [doc id='1']. - **Production Capacity Expansion**: Harmonic reducer capacity expanded from 30k/month to 40k/month, with plans to reach 80k/month by the end of 2025 [doc id='2']. Gross Profit Margin (GPM) Insights - **GPM Stability**: GPM expected to remain around 40% with potential upside due to improved economies of scale [doc id='1']. - **GPM Projections**: Gross profit margin forecasted to improve from 37.6% in 2025E to 40.7% in 2026E [doc id='9']. Valuation Metrics - **Valuation**: New TP of Rmb187 based on a P/E ratio of 281x for 2025E, reflecting strong earnings recovery and increased exposure to humanoid robots [doc id='3'][doc id='21']. - **Market Capitalization**: Current market cap stands at Rmb26.64 billion (approximately US$3.77 billion) [doc id='5']. Risks and Challenges - **Market Risks**: Potential risks include slower growth in the automation market, increased competition, higher raw material costs, and lower contributions from humanoid robots [doc id='22']. Comparative Analysis - **Peer Comparison**: Preference for Hengli Hydraulic (601100.SS) over LD due to lower valuation, which may offer more room for rerating in the humanoid robot sector [doc id='3']. Additional Important Insights - **Investment Strategy**: A Buy rating is maintained for Leader Drive, with expectations of a stronger-than-expected business recovery and rising contributions from mechatronic and humanoid robot products [doc id='20']. - **Quarterly Performance**: 4Q24 net sales were Rmb111 million, with projections for 4Q25E to reach Rmb166 million, indicating significant growth [doc id='9']. This summary encapsulates the essential insights from the conference call regarding Leader Drive's financial outlook, product growth, market positioning, and associated risks.

Asia Pacific Equity Research 27 November 2025 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. China Property & Banks Vanke's bond extension - what are the implications? Jocelyn Gao (852) 2800-8529 jocelyn.gao@jpmorgan.com J.P. Morgan Securities (Asia Pacific ...

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **China Internet** industry, particularly developments in **AI** and **chatbot applications**. Core Insights and Arguments 1. **AI Model Developments**: - US AI models have regained top positions in rankings, with Google releasing **Gemini 3 Pro** and **Nano Banana Pro**, showcasing superior capabilities compared to existing models despite concerns about diminishing returns in AI scaling laws [1][8][29]. - Chinese AI models are expected to catch up within 3-6 months after US releases, indicating a competitive landscape [1][8]. 2. **Consumer AI Applications**: - **Alibaba** launched the **Qwen App**, achieving **10 million downloads** in the first week, aiming to be a productivity assistant that supports shopping and local services [1][9]. - **Ant Group's LingGuang App** reached **2 million downloads** in 6 days, focusing on AI coding capabilities [1][11]. - **Tencent** integrated AI assistant **Yuanbao** into **WeChat Pay**, enhancing operational efficiency for SMEs [1][11]. 3. **AI Infrastructure Demand**: - There is a growing demand for AI inference, with Chinese data centers expected to see a demand upcycle starting in **2026**. **Alibaba** noted that new AI demand is outpacing infrastructure capacity, leading to an optimistic capex outlook [1][12]. - **Bytedance's Volcano Engine** serves a significant portion of top brands and institutions, indicating strong market penetration [1][12]. 4. **Capex Trends**: - **Alibaba's** capex increased by **80% year-over-year** to **Rmb 32 billion**, while **Tencent's** capex declined due to chip availability issues [1][8]. - Alibaba's positive capex outlook is attributed to its AI infrastructure capabilities, contrasting with Tencent's more cautious approach [1][8]. 5. **AI Model Releases**: - **Xiaomi** introduced the **MiMo-Embodied model**, integrating autonomous driving and embodied AI capabilities [1][12]. - **Tencent** released **HunyuanVideo 1.5**, a video generation model with competitive performance metrics [1][12]. 6. **Market Dynamics**: - The Chinese AI market is characterized by a mix of open-source models and competitive pricing, with **80% of AI startups** utilizing open-source models from China [1][12]. - The gap in multi-modal capabilities between Chinese and global players is narrowing, with Chinese models differentiating through cost and speed [1][12]. Additional Important Insights - **Valuation Comparisons**: Tencent and Alibaba are trading at lower valuations compared to global peers, suggesting potential upside for investors [1][8]. - **Engagement Trends**: Domestic AI applications have seen a **15% month-over-month increase** in engagement, driven by platforms like **Doubao** and **DeepSeek** [1][17]. - **E-commerce and Local Services**: E-commerce engagement grew by **11% year-over-year**, with platforms like **JD** and **Taobao** showing strong performance [1][16]. - **Regulatory Environment**: Cross-border e-commerce faces increasing regulatory pressure, particularly affecting platforms like **Temu** [1][16]. This summary encapsulates the key developments and insights from the conference call, highlighting the competitive landscape and growth potential within the China Internet and AI sectors.

Summary of the Conference Call for Luzhou Laojiao Industry Overview - The liquor industry, particularly the baijiu sector, is undergoing a deep adjustment period, with external environment and policy impacts being the main sources of pressure. The industry has not yet reached a bottom or turning point, and pressure is expected to persist in the near future due to a weak consumption environment [2][3][7]. Company Performance and Expectations - Luzhou Laojiao's performance expectations for Q4 and the entire year are under pressure, with reported data aligning with terminal sales conditions. However, sales pressure is affecting inventory digestion. The company maintains a stable pricing strategy and does not compensate for losses from low-price sales [2][4]. - The company has not disclosed its operational plan for 2026, indicating that it will plan according to market conditions and economic laws while ensuring a healthy sales ecosystem [2][6]. Product Performance - There is a noticeable differentiation in performance between high and low alcohol products, with low alcohol products showing relative resilience. The low alcohol product 1,573 has performed steadily, and the trend towards lower alcohol content is gradual and long-term [2][9][10]. - The brand "Laozihao Tequ" is focused on brand revival, maintaining a stable price around 200 yuan, and is less affected by industry adjustments. The company plans to strengthen channel construction and consumer cultivation in the 100-300 yuan price range [2][11][12]. Sales and Distribution Strategy - Luzhou Laojiao is expanding its terminal presence, particularly in Sichuan and North China, to enhance market share. The company emphasizes online channels and instant retail while traditional tobacco and liquor stores remain the main distribution channels [4][15][18]. - The company is cautious about introducing lower alcohol products below 30 degrees, focusing on quality and stability before launching new products [10][20]. Market Trends and Consumer Behavior - The company anticipates that the consumption environment will remain weak, with the impact of policies likely to diminish over time. However, a sudden surge in consumer demand during the Spring Festival is not expected [7][25]. - The current pricing strategy is stable, with the company not compensating for losses from low-price sales, which helps maintain price stability [8][23]. Digitalization and Inventory Management - Luzhou Laojiao has a relatively mature digitalization strategy, with high opening rates for its products. The implementation of a five-in-one system effectively addresses issues of cross-regional sales [4][24]. - The company is managing inventory levels carefully, as a slowdown in sales could lead to instability in inventory levels [5]. Future Outlook - The company expects to continue facing significant pressure in the liquor industry over the next few quarters, with cautious optimism for 2026 depending on improvements in the consumption environment and reduced policy impacts [25]. This summary encapsulates the key points discussed during the conference call, highlighting the challenges and strategies of Luzhou Laojiao within the broader context of the baijiu industry.

Summary of Conference Call on Asia Emerging Robotics and Hesai Company and Industry Overview - **Company**: Hesai, a global leader in LiDAR technology, particularly known for its "laser eyes" applications in robotics and automotive sectors [1] - **Industry**: Robotics and Advanced Driver Assistance Systems (ADAS), focusing on the integration of LiDAR technology for enhanced safety and performance [1][4] Core Insights and Arguments 1. **Necessity of LiDAR**: - LiDAR has proven superior in handling safety-critical scenarios compared to camera-only ADAS solutions, which have not reduced severe injury rates in vehicles [2][7] - The injury rates in vehicles equipped with camera-only systems remain significantly higher than those with LiDAR [2][7] 2. **Market Adoption**: - More automotive OEMs are adopting LiDAR for higher levels of autonomous driving, indicating a shift in industry standards [2][18] - The performance of LiDAR-enabled ADAS solutions is improving rapidly, showcasing the technology's potential [2][20] 3. **Affordability and Mass Adoption**: - The cost of long-range ADAS LiDAR has decreased to around USD 200, making it more accessible than many passive safety systems [3][26] - Current penetration of long-range ADAS LiDAR in China is about 10%, with expectations for significant growth due to attractive pricing [3][31] - Over 70% of passenger vehicles sold in China are priced below USD 28,000, indicating a large market for affordable LiDAR solutions [3][35] 4. **Evolution of Robotics**: - Robotics typically relies on various perception technologies, but LiDAR's time-of-flight principle offers advantages in detection range and low-light performance [4][46] - New products integrating LiDAR and camera functions are emerging, such as RoboSense's AC2 and Huawei's Limera, which represent a new generation of "laser eyes" for robotics [4][55][57] 5. **Investment Outlook for Hesai**: - Hesai's stock has de-rated since mid-September and is currently trading at approximately 25x forward P/E, presenting attractive entry points for investors [4][60] - The company is rated as "Outperform" with price targets set at USD 33.00 for HSAI.US and HKD 253.00 for 2525.HK [64] Additional Important Points - The report emphasizes the ongoing debate regarding the necessity of LiDAR in robotics, given the lower safety risks compared to automotive applications [4] - The integration of LiDAR technology is expected to become a standard in both automotive and robotics sectors, shifting the choice from passive cameras to active "laser eyes" [4] - The report highlights the potential for Hesai amid the growth in intelligent vehicles and emerging robotics, reinforcing the company's strategic position in the market [4]

Summary of Shede Liquor Industry Conference Call Company Overview - **Company**: Shede Liquor Industry - **Industry**: Baijiu (Chinese liquor) Key Points and Arguments Sales Performance and Market Recovery - During the double festival period, four major products achieved year-on-year growth, indicating a gradual recovery in Baijiu consumption scenarios [2][3] - The demand for banquet scenarios is recovering the fastest, with the mass consumption segment maintaining double-digit growth, particularly for the T68 product [2][5] - Post-festival, the company continues to track weekly opening bottle numbers, which are still in a recovery phase [3] Inventory Management - The company has optimized distributor inventory to 3-4 months, ensuring a healthy and sustainable growth trajectory [2][6] - The goal is to further reduce inventory to 3 months or less by year-end, which is considered a reasonable level [7][8] Pricing and Sales Strategy - Strict price control and incentive adjustments are in place to ensure alignment between actual sales and financial reports [6][16] - The company has shifted its incentive system to target achievement based on historical sales data, resulting in over 75% of sales personnel receiving bonuses [6] Product Performance - T68 is positioned as a mid-to-high-end product and has shown steady growth in the mass consumption segment, contributing to the company's revenue [12][13] - The new 29-degree product "Zizai" is aimed at young consumers and will not enter traditional channels, focusing instead on self-operated stores and new sales strategies [14][26] E-commerce and Online Sales - E-commerce channels have seen rapid growth, with their share increasing to over 10% in 2025, and the company plans to increase online investments while maintaining stable offline development [15][18] - The main focus online is on cultural products, which do not compete with traditional distributors [18] Regional Performance - The "Pinwei Shede" brand has performed exceptionally well in Shandong, particularly in cities like Liaocheng, Tianjin, and Tangshan [10][11] - The company has seen significant growth in the Shandong market post-ban on alcohol [5][21] Future Outlook - The company expects to perform slightly better than the industry average if the overall market remains healthy [9] - Plans for 2026 include continued focus on brand elevation and channel penetration to secure a larger customer base [9][13] International Expansion - The company is actively pursuing international markets, particularly in Southeast Asia and the U.S., adapting products to local cultures and preferences [22][23] - Overseas sales have increased by over 50% in the first half of the year, although significant results will take time [23] New Product Development - The introduction of the 29-degree "Zizai" product aims to cater to new drinkers and women, while also appealing to older consumers who prefer lower alcohol content [24][26] - The company plans to launch affordable products around 100 yuan to meet diverse consumer needs [25][26] Conclusion - Shede Liquor Industry is strategically positioned for growth through effective inventory management, targeted marketing, and expansion into new consumer segments and international markets. The focus on product innovation and e-commerce development will further enhance its competitive edge in the Baijiu industry.

Summary of Xianhe Co., Ltd. Conference Call Company Overview - **Company**: Xianhe Co., Ltd. - **Industry**: Pulp and Paper Key Points Diversification and Raw Material Layout - Xianhe has diversified its raw material sources, including non-eucalyptus fibers such as reed pulp and sugarcane pulp, enhancing its risk resistance and laying a foundation for new product development [2][4] - The Hubei base has reached full production capacity for biological paper using reed pulp, while the Guangxi phase one has been fully operational, with phase two planning for fluff pulp production [2][4] Capacity Expansion Plans - Domestic capacity expansion is progressing steadily, with Guangxi phase two expected to be operational by the end of 2026 and a unique project in Sichuan anticipated to partially launch by the end of 2027 [2][6] - The overseas base in Cambodia is expected to start production by the end of 2026, with considerations for expansion into the Middle East to avoid trade barriers and expand international markets [2][6] Profitability and Market Outlook - Xianhe expects industry price increases in 2026 to improve profitability, with ongoing overseas base construction and cost control measures [2][7] - The company anticipates a recovery in the specialty paper industry, with its leading position expected to yield more pronounced trends compared to peers [3] Investment in Southeast Asia - The investment in Cambodia aims to explore the Southeast Asian market, serving clients in Vietnam and Cambodia, with future plans to assess Indonesia, Thailand, and Malaysia [9][12] - The investment in Cambodia is approximately 500 million RMB, considered a preliminary attempt to establish a production base close to key markets [9] Product Production and Market Demand - The Cambodian base will produce over 10 types of products, including consumer materials and industrial materials, with flexibility to adjust production based on customer needs [10] Competitive Advantages - Chinese companies have strong production capabilities in tobacco-related materials, having overcome technical challenges and aligning with international standards, enhancing competitiveness in global markets [11] Pulp Price Trends - Pulp prices are on a cyclical upward trend, having increased by $50 in September, with domestic prices rising by 200 RMB, driven by rising wood chip costs [13][14] - The average production cost in China is approximately $490 per ton, but rising wood chip prices are pushing costs higher, potentially impacting profit margins [15] Strategic Responses to Market Conditions - Xianhe maintains a stable ratio of self-use to external sales, with approximately 20% of production sold externally to ensure customer relationships and market share [17][18] - The company is prepared to adjust import-export structures and optimize internal resource allocation in response to raw material supply fluctuations [19] Capital Expenditure Plans - Capital expenditures for 2026 are projected at 3 billion RMB, primarily for projects in Sichuan, Hubei, Guangxi phase two, and Cambodia [23] Overall Financial Performance - In 2025, Xianhe's overall costs have decreased, leading to better profit performance, with brand and service quality becoming increasingly important in a challenging market [21][22]