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CNGR(2579)
Analysis¡G
CNGR ADVANCED MATERIAL is a new energy materials company primarily engaged in the research and development, production, and sales of new energy battery materials centered on cathode active material precursors (pCAM), as well as new energy metal products. The Group is a global leader in nickel-based and cobalt-based cathode active material precursors (pCAM) for lithium-ion batteries, ranking first in shipment volume for five consecutive years since 2020. In terms of 2024¡¦s nickel-based pCAM and cobalt-based pCAM, it holds market shares of 20.3% and 28%, respectively. In terms of sales value for all pCAM products, the Group ranked first globally in 2024, with a market share of 21.8%. To better serve customers and meet evolving market demands, the Group launched phosphorus-based CAM in the second half of 2024. The Group¡¦s new energy battery materials are widely used in lithium-ion batteries for electric vehicles, energy storage systems, consumer electronics, and applications with higher power demands and thus strong commercial potential (such as AI-enabled consumer electronic devices, humanoid robots, and low-altitude aircraft).
The Group has established an integrated R&D platform covering the entire production process and product lifecycle, including mineral metallurgy, new energy materials research and mass production process development, manufacturing equipment design and optimization, product testing and evaluation, and recycling, enabling rapid product iteration. The Group has also built a global supply chain, including nickel, phosphorus, and lithium resources, allowing for sustained access to stable and cost-effective raw material supplies, thereby enhancing business resilience. As of June 30, 2025, the Group has four production bases in China, three in Indonesia, one in Morocco, and is planning one each in Indonesia and South Korea. In Indonesia, its production bases leverage the country¡¦s abundant, high-quality, and cost-effective nickel resources and well-established nickel value chain, serving as a regional hub for South Asia and Southeast Asia. In Morocco, its production base leverages the country¡¦s rich phosphate and clean energy resources, as well as its mature phosphate industry value chain, serving as a strategic hub for the European and American markets. South Korea is the second-largest producer of new energy batteries by shipment volume in 2024, and the Group¡¦s planned production base in South Korea positions it closer to major customers in the region.
Over the past few years, the Group¡¦s performance has grown steadily, with revenue increasing 13% from RMB 30.343 billion in 2022 to RMB 34.273 billion in 2023, and further increasing 17.4% to RMB 40.222 billion in 2024. Profit attributable to shareholders increased 25.8% from RMB 1.548 billion in 2022 to RMB 1.947 billion in 2023, while profit attributable to shareholders in 2024 was RMB 1.467 billion, representing a decline compared to 2023. (I do not hold the aforementioned stock).
Strategy¡G
Buy-in Price: $33.80, Target Price: $37.00, Cut Loss Price: $32.20
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ZTE(763)
Analysis¡G
For the first three quarters of 2025, revenue reached RMB 100.52 billion (year-on-year increase of +11.63%), while net profit attributable to the parent company was RMB 5.322 billion (year-on-year decrease of -32.69%). Basic earnings per share were RMB 1.11 per share (year-on-year decrease of -32.73%). In the first half of 2025, revenue was RMB 71.553 billion (year-on-year increase of +14.5%), and net profit attributable to the parent company was RMB 5.058 billion (year-on-year decrease of -11.77%), with a gross margin of 32.5%. The enterprise business experienced explosive growth, with revenue increasing by 109.93% year-on-year, primarily driven by surging demand for servers and storage products (penetrating into core scenarios of leading internet companies such as Alibaba, Tencent, and ByteDance). The self-developed DPU chip (Dinghai Series) and switching chip (Lingyun Series) enable the interconnection of domestic GPU cards, supporting 10,000-card-level intelligent computing clusters and gradually establishing technical barriers. The operator business maintains a solid foundation, accounting for 49.00% of revenue. Although impacted by declining domestic 5G capital expenditures, expansion in overseas markets (5G deployments in Southeast Asia and Latin America) and growth in home terminal products (FTTR, Wi-Fi 7 routers) partially offset the pressure.The consumer business is recovering steadily, contributing 24.09% to revenue. The collaboration with ByteDance to launch the Doubao AI phone explores AI applications on the device side, though competition from brands like Huawei and Xiaomi limits the potential for significant gross margin improvement. Currently, ZTE maintains a robust financial foundation, with the enterprise business and AI computing power layout serving as core growth engines. In the long term, the company is poised to benefit from 6G technology reserves and industry digitalization trends. Overall, the company is at a critical stage of business transformation, with its long-term growth logic expected to strengthen.
Strategy¡G
Buy-in Price: $29.10, Target Price: $33.78, Cut Loss Price: $26.94
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Desay SV (002920 CH) - Continuous Updates of Intelligent Products
Investment SummaryCompany profile
Desay SV, established in 1986, is a leading company in the automotive electronics field, with its main products including intelligent cockpits, intelligent driving, and connected services. As the cornerstone of the company's revenue, the intelligent cockpit generated a revenue of RMB18.23 billion in 2024, (RMB, the same below), accounting for 66.01% of total revenue. The intelligent driving business also saw growth, with 2024 revenue reaching RMB7.314 billion, a yoy increase of 63.06%, accounting for 26.5%. The company's total revenue in 2024 amounted to 27.618 billion yuan, up 26.06% yoy, with a net profit of 2.005 billion, up 29.62% yoy.
Strong Performance in the First Three Quarters
In the first three quarters of 2025, the Company achieved revenues/net profits/net profits excluding non-recurring items of RMB22.337 billion/RMB1.788 billion/RMB1.724 billion, marking yoy increases of 17.72%/27.08%/19.02%, respectively. The gross margin was 19.70%, down 0.5 percentage points yoy. In the third quarter of 2025 alone, the company achieved revenues/net profits/net profits excluding non-recurring items of RMB7.692 billion/RMB0.565 billion/RMB0.571 billion, marking yoy increases of 5.63%, but a decline of 0.57% and 13.25%, respectively. Compared to the previous quarter, revenues/net profits/net profits excluding non-recurring items decreased by 2.04%, 11.74%, and 12.86%, respectively. The third-quarter performance declined quarter-on-quarter, mainly due to the decrease in sales from the core customer Li Auto and industry-wide price reduction pressures. However, with the upcoming launch and delivery of new models such as the Li Auto i6 and Xpeng X9 in the fourth quarter, it is expected that the increase in sales driven by the launch of multiple new models will improve performance in the fourth quarter.The quarter-on-quarter decline in performance was mainly influenced by lower sales of core customer Li Auto's vehicles and price reduction pressures in the industry. However, with the upcoming launch and delivery of new models such as the Li Auto i6 and XPeng X9 in the fourth quarter, it is expected that the increase in sales from these new models will improve fourth-quarter performance.
Ongoing Investment in R&D, Continuous Updates of Intelligent Products, Leading the Industry
In 2024, the company's R&D expenses were RMB2.256 billion, accounting for 8.17% of revenue. In the first three quarters of 2025, R&D expenses amounted to RMB2.003 billion, accounting for 8.97% of revenue. The continued increase in R&D investment has provided strong support for new technologies and products. 1) Intelligent Cockpit: The company's fourth-generation intelligent cockpit has been scaled up for mass production in collaboration with Li Auto, Xiaomi Auto, and Geely Auto, and has continued to receive new project orders from GAC Passenger Cars, Geely Auto, and GAC Aion. The fourth-generation flagship intelligent cockpit domain controller is now in mass production for Chery Auto. The fifth-generation intelligent cockpit platform has secured new project orders from Li Auto and attracted attention from several top global OEMs. The company's HUD (Head-Up Display) first mass production project has been launched, marking a significant breakthrough in the intelligent driving visual field. New project orders have been received from Shanghai GM, GAC Passenger Cars, and Dongfeng Nissan. 2) Intelligent Driving: In the field of advanced driver-assistance systems (ADAS), the company continues to maintain the highest market share in China and continuously optimizes and upgrades its products to meet the needs of different vehicle levels. Several flagship ADAS domain controllers have been mass-produced and successfully delivered to prominent clients such as Xiaomi Auto, Li Auto, Great Wall Motors, XPeng Motors, GAC Toyota, Geely Auto, and GAC Aion. New project orders have been received from Great Wall Motors, Geely Auto, Chery Auto, GAC Aion, and Dongfeng Passenger Vehicles. The company also offers several lightweight ADAS solutions for mid- to low-priced vehicles, the largest segment of the market, and has secured new project points from major clients such as GAC Toyota, Chery Auto, and Toyota. These solutions will be promoted to more customers. 3) Connected Services: The company has successfully achieved mass production of UWB (Ultra-Wideband) and BLE (Bluetooth Low Energy) solutions, becoming the first supplier in China to implement UWB solutions. This first-mover advantage has helped the company win key client collaborations with Li Auto and Chery Auto. Successful Fundraising, Capacity ExpansionIn October, the company completed a private placement of A-shares, raising a net amount of RMB4.393 billion. The funds are intended for investment in projects such as the Desay SV automotive electronics base in Central and Western China (Phase I) (RMB1.699 billion), intelligent automotive electronic system-level component production (RMB1.974 billion), and the intelligent computing centre and cockpit integration platform R&D (RMB0.72 billion). The company expects the first two projects, once completed, will add annual revenues of RMB8.276 billion and RMB14.773 billion, respectively, and net profits of RMB0.59 billion and RMB1.187 billion, significantly boosting the company's long-term growth potential and reinforcing its leadership position in the automotive electronics sector. Deepening International Strategy, Building Ecosystem CollaborationThe company has strengthened its strategic partnerships with global core chip manufacturers and OEMs, successfully securing new project orders from clients such as VW and Toyota, and making breakthroughs with white-spot clients such as Renault and Honda. The company has also established overseas branches in major countries and regions such as Germany, France, Spain, Japan, and Singapore. Regarding overseas production capacity, in May 2025, the company began contributing production capacity in Indonesia, strengthening the supply chain resilience and delivery capabilities in Southeast Asia. In June 2025, the Monterrey plant in Mexico launched its first mass production project, offering more efficient localized service guarantees for the Americas market. The smart factory in Spain is expected to begin mass production in 2026, providing cutting-edge intelligent products for the intelligent cockpit and ADAS fields in Europe. In the first half of 2025, the gross margin of overseas operations reached 28.93%, up 8.22 percentage points yoy, exceeding the domestic gross margin by 9.26 percentage points. The expansion of overseas production capacity will provide strong support for profit growth. Unmanned Vehicle Launch, Expanding into New BusinessesOn September 2, the company launched the "Chuanxing Zhiyuan" vehicle-grade unmanned vehicle brand in Shanghai. Entering the unmanned vehicle field is an extension of the company's core capabilities. The first product, the S6, features a vehicle-grade fully-controlled chassis and modular upper structure. Based on the S6 platform, the vehicle is capable of serving various scenarios such as industrial parks, logistics parks, agricultural trade distribution, express delivery, supermarket distribution, store restocking, fresh food distribution, and pharmaceutical delivery. The S6 series of low-speed unmanned vehicle products has already received multiple customer orders. Investment ThesisThe Company is a leader in automotive electronics, benefiting from continuous investment in R&D to maintain its technological leadership, while also actively exploring new businesses. We remain highly optimistic about the company's growth prospects.
As for valuation, we expected diluted EPS of the Company to RMB 4.12/5.23/6.63 of 2025/2026/2027. And we accordingly gave the target price to RMB147, respectively 35.7/28.1/22.2x P/E for 2025/2026/2027. "Buy" rating. (Closing price as at 31 December 2025) Peer Comparison
Source: Wind, Phillip Securities Hong Kong Research PE BAND
Source: Wind, Phillip Securities Hong Kong Research RiskProgress of new production line is below expectations
Electric vehicle sales fall short of expectations
Macroeconomic downturn affects product demand
Sharply rising raw material prices or sharply falling product prices Financials
(Closing price as at 31 December 2025)
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| Recommendation on 9-1-2026 | | Recommendation | Buy (Initiation) | | Price on Recommendation Date | $ 120.300 | | Suggested purchase price | N/A | | Target Price | $ 147.000 |
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