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DRINDA(2865)
Analysis¡G
DRINDA New Energy Technology is primarily engaged in the research, development, production, and sales of photovoltaic cells. By the end of 2022, the Group took the lead in the industry by achieving large-scale mass production of N-type cells and completing a comprehensive upgrade and iteration of N-type technology. Currently, the Group has two major N-type cell production bases in Chuzhou and Huai¡¦an, with a total cell production capacity exceeding 40GW, ranking at the leading level in the industry. Focusing on the rapidly growing overseas photovoltaic demand, the Group adheres to a globalization development strategy, continuously expanding and certifying new emerging market customers in Asia, Europe, North America, Latin America, Australia, and other regions, while steadily building and improving a global sales and service network. It possesses global customer service capabilities, and the top-ranked photovoltaic module enterprises in global shipments are all long-term stable customers of the Group. In overseas markets dominated by India and Turkey, the Group has developed into a leading supplier of photovoltaic cell products in those markets.
According to statistics, in the first three quarters of 2025, China¡¦s cumulative photovoltaic cell exports increased by 72.1% year-on-year, maintaining high growth for three consecutive years. The Group achieved a significant increase in the proportion of overseas sales, with the overseas sales proportion in the first three quarters of 2025 surging from 24% in 2024 to 51%. In addition to expanding the cell export business, the Group is also continuously exploring diversified models such as technical cooperation, capacity construction, and investment cooperation to plan and layout overseas high-efficiency cell production capacity. For example, it has formally signed a strategic cooperation agreement with local module customers in Turkey and is actively advancing capacity construction. The two parties are jointly building a high-efficiency cell project to meet the urgent demand for high-performance and high-reliability photovoltaic cells in Turkey and other global markets, filling the structural gap in regional cell capacity, and strengthening the Group¡¦s international capacity allocation and global customer service response efficiency.
In the Chinese market, according to data from the National Energy Administration, from January to September 2025, new photovoltaic installed capacity reached 240.27GW, a year-on-year increase of 49.3%, and the domestic cumulative installed capacity historically exceeded 1,000GW, entering the ¡§terawatt era.¡¨ In the future, with the expansion of domestic application scenarios such as large-scalec ¡§Desert, Gobi and Wasteland¡¨ base projects, green electricity direct connection, zero-carbon parks, and non-electric utilization (photovoltaic hydrogen production), continuous improvement of power infrastructure, and ongoing advancement of market-oriented reforms in new energy electricity prices, domestic installed capacity is expected to maintain steady growth. After nearly two years of market-oriented elimination of backward capacity and policy guidance, the supply-demand balance in the photovoltaic industry will recover, industry concentration is expected to further increase, and the competitive landscape will be reshaped. As a leading enterprise in the photovoltaic cell industry, the Group is poised to achieve profitability recovery and sustained growth. (I do not hold the above stock.)
Strategy¡G
Buy-in Price:$21.00, Target Price:$23.50, Cut Loss Price:$19.50
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CONANT OPTICAL(2276)
Analysis¡G
Conantoptical is a leading resin eyeglass lens manufacturer in China, providing standardized and customized optical lenses and services for downstream lens brands (ODM model) and end-users (private label). According to Frost & Sullivan reports, based on 2020 data, the Company ranked first among resin lens manufacturers in China, with a market share of approximately 8.5%, and was also the largest exporter in China, accounting for about 7.3% of the market share. As one of the few manufacturers globally capable of mass-producing high-refractive-index (1.74) lenses while offering flexible small-batch services, the Company leverages its technological, supply chain, and production advantages to continuously expand its high-margin customized business, driving the premiumization of its product structure. In 2024, the Company collaborated with several globally renowned technology and consumer electronics firms to actively develop smart eyeglass lenses. The Alipay-branded Quark AI glasses, launched in October 2025, were exclusively supplied by the company. Currently, AI glasses remain in the early growth stage, with significant future growth potential. The new round of national subsidy policy in 2026 will include smart glasses for the first time, with a subsidy rate of 15% and a per-unit subsidy cap of 500 yuan (for products priced no higher than 6,000 yuan each), which is expected to drive a surge in demand for smart glasses.
Strategy¡G
Buy-in Price: $53.20, Target Price: $59.60, Cut Loss Price: $49.00
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Desay SV (300750 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 5-1-2026 | | Recommendation | Buy (Initiation) | | Price on Recommendation Date | $ 120.300 | | Suggested purchase price | N/A | | Target Price | $ 147.000 |
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