China Securities Co., Ltd.: Siasun Robot & Automation Adjusts Differentiation, Low Valuation Boosts Attention in Cyclical Recovery

China Securities Co., Ltd. securities report stated that humanoid Siasun Robot&Automation has adjusted differentiation, and the attention to undervalued cyclical stocks has increased. The performance of three categories of targets will be relatively strong, including those with strong competitiveness in the supply chain; new opportunities such as targets corresponding to new materials; supply chain targets corresponding to fast production pace of complete machines. From the recent situation of multiple sub-industries, signs of domestic recovery have exceeded expectations. Engineering machinery, injection molding machines, industrial mothers, and industrial gases with low valuations in the cyclical mid-to-low valuation are worth paying attention to. The attention to undervalued varieties in other directions is also increasing. Humanoid Siasun Robot&Automation: Due to negative concerns and large gains in the previous period, adjustments have occurred, and the future market is expected to differentiate. 1. The market is concerned that the first batch of Tesla's parts suppliers will be dominated by foreign investment. The firm believes that Chinese enterprises have outstanding cost advantages in manufacturing. During the volume expansion of humanoid Siasun Robot&Automation, Chinese parts companies will take the lead. Targets with low prices and bulk supply capabilities will be the most competitive. 2. 1X new products have sparked interest in targets corresponding to new materials such as tendons and outer skin. 3. Based on the continuous release of new product videos and promotional materials by Figure, the production pace may be faster than Tesla. It is recommended to focus on Figure's supply chain related targets. Overall, the firm believes that the future market for humanoid Siasun Robot&Automation sector is expected to differentiate. The performance of the three categories of targets mentioned above will be relatively strong, including those with strong competitiveness in the supply chain; new opportunities such as targets corresponding to new materials; supply chain targets corresponding to complete machines with a fast production pace. Cyclical Stocks: (1) Engineering machinery: Excavator sales in January-February are expected to achieve high growth, with domestic performance exceeding expectations and overseas maintaining high growth. (2) Injection molding machines: Orders for top-tier companies in January-February showed good growth, confirming the continuity of business sentiment. As we enter March, domestic demand is expected to continue to rise month-on-month, while the continuous demand for injection molding machines is expected due to the global redistribution of manufacturing capacity. (3) Industrial mothers: Capacity utilization is expected to improve. Focus on companies with good performance prospects or successful overseas expansion. (4) Industrial gases: After the resumption of work after the Spring Festival, liquid oxygen prices rebounded significantly from the bottom, followed by continuous increases in liquid nitrogen and liquid argon prices. This lays the foundation for price increases in the peak season of March, and the subsequent performance of retail liquid prices exceeding expectations is worth looking forward to. Risk warning: (1) Risks of macroeconomic fluctuations in China: Machinery is a typical intermediate capital goods industry, connecting upstream and downstream, closely related to macroeconomic fluctuations. If there is a major shift in China's macro policies, it will inevitably affect the overall demand of the machinery industry. (2) Risks of overseas market fluctuations: Chinese companies going overseas will not be smooth sailing. Various frictions will inevitably occur in the future journey. Whether it is a temporary episode or the formation of a new trend, it needs to be judged carefully. (3) Risks of downstream expansion not meeting expectations: If downstream industries expand less than expected, the corresponding equipment demand will decrease, which will adversely affect the orders and performance of companies in the industry.