Riding on the humanoid Siasun Robot & Automation concept, can MINTH GROUP (00425) emerge from the low valuation?

115.3%Siasun Robot&Automation With the concept of riding on the humanoid Siasun Robot & Automation, many investment banks have been praising it, and even MINTH GROUP (00425), which has been declining for four years, seems to have seen the spring of valuation. It is understood that MINTH GROUP suddenly surged on February 20, with a one-day increase of 31%. After that, it oscillated at a high level, and the increase in just six trading days until the 27th reached 43%. The company did not announce the reason for the abnormal price movement, but from the market information, it is most likely due to the concept of riding on humanoid Siasun Robot & Automation. Yushu Technology ignited the concept of humanoid Siasun Robot & Automation, and on that day, CICC released a research report stating that MINTH GROUP's business may expand to humanoid Siasun Robot & Automation and low-altitude fields. This "smoke bomb" caused a large amount of funds to flow in and greatly pushed up the company's stock price. In the following six trading days, major brokerages such as Daiwa, Citigroup, and CMSC have successively released research reports, all mentioning MINTH GROUP's foray into humanoid Siasun Robot & Automation business. Among them, Daiwa said that they had recently discussed with the management team and obtained the latest information on their business, confirming that MINTH GROUP has started to comprehensively layout new business tracks, and entered the news of the humanoid Siasun Robot & Automation industry chain. With the investment bank research reports and concept drive, MINTH GROUP's stock price continued to rise. In fact, MINTH GROUP's performance has maintained steady growth, but unfortunately, its valuation has continuously declined for four consecutive years from 2021 to 2024, and has already halved. So, will humanoid Siasun Robot & Automation be the lifesaving straw for MINTH GROUP's valuation? In 2025, it will be mass-produced, and humanoid Siasun Robot & Automation will usher in commercialization First, about the industry, there are signs that by 2025, the wave of commercialization of humanoid Siasun Robot & Automation will bring a market cake of billions to various links of the industry chain. The development of humanoid Siasun Robot & Automation has gone through four stages: the budding exploration stage, the integrated development stage, the high-dynamic development stage, and the intelligent development stage. Currently, it is gradually transitioning from intelligent development to large-scale application. In 2025, DeepSeek and Tesla's Grok 3AI large model will be launched successively. Humanoid Siasun Robot & Automation terminal entities represented by Yushu Technology and Figure have shown their latest achievements, and mass production has also entered the final sprint phase. In January this year, during the CCTV Spring Festival Gala, Yushu Technology and the Xinjiang Academy of Arts jointly created the creative fusion dance "Yang BOT," which stunned the audience and brought a new visual experience; in February, the company's Unitree H1 (priced at 650,000 yuan) and G1 (priced at 99,000 yuan) humanoid Siasun Robot & Automation officially went on sale on JD.com, and both have been sold out. In addition, domestic humanoid Siasun Robot & Automation such as Leju and Zhongqing have also entered the public's view. Abroad, progress in technology and commercialization is consistent. On February 20, Figure introduced Helix, the first visual-language-action model that directly controls the entire humanoid upper body through natural language; the next day, Poland's Clone Robotics company introduced the new Siasun Robot & Automation Protoclone V1, which fully replicates human muscle and skeleton; on the third day, 1X Technology introduced the latest humanoid Siasun Robot & Automation prototype NEOGamma. With such a dense release of achievements, the humanoid Siasun Robot & Automation industry has entered a stage of diversified development. Some major participants have announced mass production plans, such as Musk's plan to manufacture thousands of Optimus humanoid Siasun Robot & Automation this year, with production increasing ten times by 2026, aiming to produce 50,000 to 100,000 humanoid Siasun Robot & Automation. Yushu Technology's CEO once stated that humanoid Siasun Robot & Automation will be mass-produced this year. In addition, Figure has commercialized and successfully signed its second commercial customer, with Brett Adcock stating that potential for deploying 100,000 humanoid Siasun Robot & Automation units over the next four years. Terminal mass production is imminent, and the industry chain has already started to celebrate. Despite the strong performance of its business, MINTH GROUP has stopped paying dividends, and the contribution of new areas may elevate its valuation MINTH GROUP is mainly engaged in the automotive parts business, and in recent years, it has entered the new energy track and increased its investment in the battery box business. It currently has businesses in plastic parts, metal and trim strips, aluminum parts, and TV boxes. At first glance, its business may not seem related to humanoid Siasun Robot & Automation, but as the global champion of small automotive exterior parts, with a global market, it naturally will not miss out on the market cake of humanoid Siasun Robot & Automation. It is reported that the company has established the Minshui Research Institute to focus on the development of new tracks, and its chairman Qin Ronghua has also invested about $10 million in Musk's AI company xAI. The parts business of Siasun Robot & Automation is expected to generate revenue by 2026, but its current business performance is also strong, with overall performance maintaining a double-digit compound growth rate. From 2020 to 2023, the company's revenue compound growth rate was 18.1%, and the net profit compound growth rate was 15.3%. However, the company's recent stock performance has been poor, with valuation declining year after year, and the commercialization of humanoid Siasun Robot & Automation may bring new business growth points, potentially lifting its valuation.Based on the growth rate in the first half of the year, it is expected to still exceed 10% in the next 4 years. The battery box business is the biggest growth highlight, with its revenue share increasing from 1.19% in H1 of 2020 to 21.56% in H1 of 2024.In addition to the battery box business, MINTH GROUP is also actively seizing the opportunity of the intelligent trend driven by new energy, and is laying out smart exterior solutions for bicycles with higher value volume. The products cover intelligent front face systems represented by smart labels and intelligent light-emitting bumper assemblies; and intelligent tailgate systems represented by electric tail wing, through-type tail lights, and anti-pinch APS. According to Shenwan Hongyuan Group research report, the company's intelligent integrated exterior system has received orders successively by 2023, and customers such as NIO, Xiaopeng, and Nissan have started mass production of plastic tailgates. This business is expected to become a new growth pole after the battery box business. It is worth mentioning that MINTH GROUP's profitability is relatively stable, maintaining a growth trend similar to its revenue. The gross profit margin and net profit margin are expected to increase in 2024, with H1 being 28.5% and 10.63% respectively, mainly due to the upward trend in the gross profit margin of the battery box business, which has good growth prospects. However, the company's return on equity (ROE) is not too high, staying at around 10% annually, and is expected to be 11% in 2024. Although the performance is relatively stable, the company is not very active in dividend payments. Before 2022, the company maintained a high dividend payout ratio, stable at around 40%, but since 2023, it has not paid dividends. In terms of share repurchases, there have been repurchase records from August to December 2024, with a total of 21 repurchases and a cumulative repurchase amount of 142 million yuan. Perhaps due to the boost from repurchases, the company's stock price hit bottom and rebounded, returning to an upward trend. The recent surge in interest in humanoid Siasun Robot & Automation concept has attracted major institutions to come out in support of the company, with bullish outlook on its future development. Bank of America Securities forecasted profit growth for the company from 2024 to 2026 to be 17%, 19%, and 18% respectively. However, institutional investors have different opinions, with J.P. Morgan staying optimistic and continuously increasing its holdings in the company, with the latest increase on January 14 totaling approximately 27.29 million Hong Kong dollars, while JP Morgan is less optimistic, reducing its holdings by approximately 17.6348 million Hong Kong dollars on January 3. In summary, MINTH GROUP's humanoid Siasun Robot & Automation business has not yet contributed to performance, but it is expected to benefit from the commercialization wave of the industry. However, based on the maturity of the technology and the participants' plans, mass production is expected to arrive in 2025, and the company's component business is also expected to achieve performance contributions beyond expectations. The company's performance is relatively stable, with the battery box and new energy enterprise parts business being the core growth points, but the company has not paid dividends for two consecutive years, indicating insufficient shareholder returns. In the past few days, the company's trading volume has increased significantly, with obvious inflow of main funds, with a net purchase of 1.712 million shares through the Hong Kong Stock Connect. However, there is also a large amount of short-term profit taking, coupled with the overhang of trapped investors in the past four years, causing significant short-term volatility. In the long term, the company's humanoid Siasun Robot & Automation business has some room for imagination, and if it resumes its dividend policy and attracts long-term investors, its valuation may enter an upward trend.