GMTEight Exclusive| Siasun Robot & Automation "Raises" the share price of Techlong Electric (00179)

As the theme of humanoid Siasun Robot&Automation explodes in popularity, JOHNSON ELEC H (00179) has become the focus of attention for investors. It is noted that since reaching a monthly low of 9.9 Hong Kong dollars on February 4, the stock price of Johnson Electric has been volatile, climbing to 18.18 Hong Kong dollars on February 26, with a monthly increase of up to 83.6%. In this round of market activity, southbound funds have played a key role. As of February 21, southbound funds held 35.11 million shares of Johnson Electric, accounting for 3.75% of the total shares, with a market value of 506 million Hong Kong dollars. The reason why the stock price of Johnson Electric has risen rapidly lies in the high expectations of the market for the future prospects of the humanoid Siasun Robot&Automation industry. Globally, tech giants like Google and Microsoft have entered the field of humanoid Siasun Robot&Automation, with a large amount of funds and resources pouring in, creating continued interest in this theme. As an established player in the field of electric motors, Johnson Electric's long-term accumulation in motor system design, research, and manufacturing has led investors to expect a share in the development of the humanoid Siasun Robot&Automation industry. From this perspective, betting on the humanoid Siasun Robot&Automation business could be a key move for Johnson Electric to break through its growth bottleneck and open up a new growth curve. Facing pressures on its traditional businesses, Johnson Electric is currently undergoing a time of transformation. Johnson Electric Group, founded in 1959, is a large multinational group headquartered in Hong Kong, with a leading position in the global design, research, and manufacturing of micro motors and integrated motor systems. Johnson's micro motor products are widely used in consumer and commercial products, including automotive parts, household appliances, power tools, commercial equipment, personal care products, multimedia, and audio-visual products. In terms of revenue structure, Johnson Electric's business is mainly divided into two major divisions: Automotive Products Group (APG) and Industrial Products Group (IPG). APG focuses on providing custom motors, drivers, switches, and drive subsystem products for the automotive industry, holding an important position in the key automotive drive field. According to QYResearch data, Johnson Electric had a market share of 14.1% in the global automotive micro motor market in 2021, ranking second. IPG provides drive products and custom solutions for household appliances, power tools, commercial equipment, and other industrial products. In recent years, Johnson Electric's traditional businesses have faced challenges. Due to the impact of the global economic situation, demand for automotive products and industrial products in the US and EU markets has shown a weak trend. The company's unaudited financial data announcement for the third quarter of fiscal year 24/25, released on January 15, showed that revenue for the first three quarters of 2024 was 2.73 billion USD, a 5% year-on-year decrease. Taking into account various factors such as the continued low production of light vehicles globally, persistently weak consumer demand, and an uncertain macroeconomic environment, it is expected that sales for the full year will experience a mid single-digit percentage decline compared to the previous year. In this situation, Johnson Electric needs to explore new business growth points, and the humanoid Siasun Robot&Automation motor system business, with its broad development prospects, may become a key focus. Although Johnson Electric has not officially disclosed detailed plans and specific details for its humanoid Siasun Robot&Automation business, with its deep technical advantage in motor system design, research, and manufacturing, the market generally believes that it has a significant competitive advantage in this field. According to a recent report by Citigroup, given the current weak demand for Johnson Electric's APG and IPG products in the US/EU markets, Citigroup has decisively lowered its earnings forecast for the fiscal year 2025 by 3%; but in the long term, new businesses are expected to bring new growth momentum to the company, so Citigroup simultaneously raised Johnson Electric's earnings forecast for the fiscal years 2026 to 2027 by 1% to 2% and gave a "buy" rating, with a target price raised from 14 Hong Kong dollars to 19 Hong Kong dollars. Citigroup expects that when Johnson Electric announces its financial performance for the fiscal year 2025, it will focus on the progress of the new business of the humanoid Siasun Robot&Automation motor system. Huaxin Securities pointed out in a research report that Johnson Electric is preparing to enter the humanoid Siasun Robot&Automation industry. The company is currently openly recruiting a business development manager for the humanoid Siasun Robot&Automation business, requiring the ability to engage in in-depth discussions with cross-functional teams (engineering, project, and operations teams) on the deliverable outcomes of strategic plans and growth expectations, ensuring profitable growth through a sustainable business model. With the support of policies, China has been increasing support for humanoid Siasun Robot&Automation, issuing related support policies. For example, in November 2023, the Ministry of Industry and Information Technology issued the "Guiding Opinions on Innovative Development of Humanoid Siasun Robot&Automation", with breakthroughs expected in key technologies such as the "brain, small brain, limbs" of humanoid Siasun Robot&Automation by 2025; in January 2024, seven ministries including the Ministry of Industry and Information Technology issued the "Implementation Opinions on Promoting the Innovative Development of Future Industries", with humanoid Siasun Robot&Automation poised to become a disruptive product after computers, smartphones, and new energy vehicles. Guided by policies, the humanoid Siasun Robot&Automation market is still in its early stages, but has already seen competition among numerous companies. According to a research report by Huaxin Securities, as of 2024, there are around 150 general humanoid Siasun Robot&Automation machine commercial companies worldwide, with over 80 in China. It is understood that human-like robot manufacturers such as 2In 2024, it was a big year for the release of prototype human-shaped Siasun Robot & Automation, such as 1XTech's NEO, Kepler's Pioneer K2, and Xiaopeng's Iron. In 2025, technology companies are releasing heavy-duty human-shaped Siasun Robot & Automation products, entering the countdown to mass production.In this process, DeepSeek has solved the problem of high cost investment in AI. AI+Siasun Robot&Automation will likely bring about an efficiency revolution in the chemical industry, and accelerate the commercialization and mass production cycle of humanoid Siasun Robot&Automation. There are already signs indicating a huge demand for humanoid Siasun Robot&Automation, such as on February 12th, Unitree Technology, a well-known company in the field of humanoid Siasun Robot&Automation, officially started pre-sales of its highly anticipated Unitree H1 and G1 humanoid Siasun Robot&Automation on the JD.com platform, which sold out quickly. CITIC SEC predicts that by 2025, shipments of humanoid Siasun Robot&Automation will exceed 10,000 units. By 2030, it is expected that shipments of humanoid Siasun Robot&Automation will reach around 5 million units, and market demand will rise to about 750 billion yuan. Dechang Electric has been deeply cultivating in the motor field for many years, possessing leading advantages in drive solution design, research and development, and manufacturing. In addition, it has established multiple research, sales, marketing, and technical support centers worldwide, enabling it to quickly respond to market demand, integrate global resources, and lay a foundation for the development of humanoid Siasun Robot&Automation business. Huaxin Securities analysis believes that Dechang Electric's rich manufacturing experience in brushless DC motors and its gear, oil pump, and metal processing capabilities are expected to help it smoothly enter the Siasun Robot&Automation component manufacturing field, opening up secondary growth space. However, it must be recognized that, in terms of technological research and development, humanoid Siasun Robot&Automation places stringent requirements on the performance of motor systems. It not only needs to have core characteristics such as high power density, high efficiency, and high precision but also needs to make significant breakthroughs in miniaturization and weight reduction. Therefore, Dechang Electric needs to increase research and development investment, introduce and cultivate high-end technical talents, build a sound technological innovation system, and meet the escalating technological demands of humanoid Siasun Robot&Automation. On the market competition level, the humanoid Siasun Robot&Automation market is continuously heating up, with numerous companies entering the industry, leading to increasingly fierce competition. Citigroup pointed out in a research report that among Dechang Electric's A-share counterparts, Jiangsu Leili Motor and Shenzhen Topband have begun to expand from current applications in automotive, home appliances, and power tools to humanoid Siasun Robot&Automation business related to automotive systems, which may bring greater competitive pressure to Dechang Electric. Thus, for Dechang Electric, the development of humanoid Siasun Robot&Automation business presents both opportunities and challenges. The company needs to deeply explore the technological potential, accelerate technological innovation, develop more differentiated and high-performance motor system products tailored to the unique application scenarios and performance requirements of humanoid Siasun Robot&Automation. At the same time, closely monitor industry trends and competitors' technological directions, adjust research and development strategies in a timely manner, and ensure that technology remains at the industry forefront. For investors, it is necessary to continuously monitor the progress of Dechang Electric in the humanoid Siasun Robot&Automation business and the dynamic changes in the market environment, in order to make wiser and more scientific investment decisions.