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SANHUA(2050)
Analysis¡G
Sanhua Intelligent Controls focuses on the research, development, and application of heat pump technology and thermal management systems as its core, specializing in the development of environmental thermal management solutions that enable efficient heat exchange and intelligent temperature control. Its business spans two major segments: refrigeration and air conditioning electrical components, as well as automotive components. Based on long-term technological accumulation and R&D innovation, the company is continuously expanding into emerging fields such as bionic robot electromechanical actuators.
The group recently issued a positive profit alert, expecting net profit attributable to shareholders for the 2025 fiscal year to range between 3.874 billion and 4.649 billion RMB, representing a year-on-year growth of 25%-50%. This is primarily driven by the group¡¦s ongoing consolidation of its industry-leading position in the refrigeration and air conditioning electrical components business, fully capitalizing on opportunities for market demand growth, combined with the deep technological foundation and large-scale production advantages of its core products, which are propelling sustained growth in this segment. At the same time, leveraging its leading market positioning in the global new energy vehicle thermal management sector and utilizing the demonstration effect of benchmark clients to continuously secure high-quality orders, the company is further strengthening the performance growth momentum of its automotive components business. The synergistic efforts of these two major business segments provide solid support for the group¡¦s overall annual performance growth.
Looking ahead, due to the strict implementation of energy conservation and emission reduction policies, coupled with consumers¡¦ increasing preference for high-performance products, demand for refrigeration and air conditioning control components in overseas markets continues to expand. It is anticipated that China¡¦s exports of refrigeration and air conditioning control components will maintain stable growth in the future. Meanwhile, global warming leading to extreme weather, along with rising living standards, has caused a surge in air conditioning demand, thereby driving the need for refrigeration and air conditioning control components. Additionally, the rapid growth of the cold chain logistics industry and the data center sector will bring new development opportunities.
With the advancement of high-voltage fast charging and battery technology in new energy vehicles, the demand for rapid heat dissipation is increasing, which is promoting the need for efficient automotive thermal management systems and thereby stimulating growth in demand for thermal management system components. At the same time, progress in automotive thermal management technology is directing automotive thermal management system components toward integrated and modular designs; the rising requirements for automotive chip computing power necessitate intelligent thermal management systems to optimize heat dissipation for computing power, leading to continuous growth in demand for efficient thermal management system components. On the other hand, population aging and rising labor costs are making bionic robots a viable option to replace human labor, thereby accelerating the development of the bionic robot electromechanical actuator market; the Chinese government places high importance on the development of the robotics industry and has issued a series of policies to support it. As technology continues to advance, the downstream application areas for bionic robots have expanded from the industrial sector to multiple industries such as medical services and logistics services, and the broad range of scenarios will stimulate increasingly growing demand for bionic robot electromechanical actuators. (I do not hold the aforementioned stock).
Strategy¡G
Buy-in Price: $39.00, Target Price: $43.00, Cut Loss Price: $37.00
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J&T EXPRESS-W (1519)
Analysis¡G
In the third quarter of 2025, the company's parcel volume in Southeast Asia reached 1.997 billion with a year-on-year increase of 78.7%; in China, parcel volume was 5.576 billion, up 10.4% year-on-year; and in new markets, parcel volume reached 104 million, rising 47.9% year-on-year. Southeast Asia serves as the core profit driver for the company, accounting for 35.8% of revenue in the first half of 2025 (US$1.97 billion) with a gross margin of 17.8%. The Chinese market contributed 57% of revenue, and the cost per parcel decreased from US$0.32 in the first half of 2024 to US$0.28 in the first half of 2025, with cost optimization offsetting pricing pressures. New markets (Latin America/Middle East) represented 6.6% of revenue, and EBITDA turned positive for the first time, establishing a second growth curve. With its dominant position in Southeast Asia, improving profitability in China, and the blue-ocean potential in new markets (Latin America/Middle East), J&T Express possesses long-term growth momentum. We believe that the e-commerce dividend in Southeast Asia and China¡¦s "anti-involution" policies are expected to continue supporting its performance growth.
Strategy¡G
Buy-in Price: $11.00, Target Price: $12.78, Cut Loss Price: $9.95
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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 6-1-2026 | | Recommendation | Buy (Initiation) | | Price on Recommendation Date | $ 120.300 | | Suggested purchase price | N/A | | Target Price | $ 147.000 |
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