New IPO Preview | Can SOFC+Siasun Robot&Automation, with solid performance, impact H shares and open up the future growth space of Zhongshan Broad-ocean Motor (002249.SZ)?

Since the second half of this year, Zhongshan Broad-ocean Motor (002249.SZ) has been making continuous moves. After accelerating its layout in the Siasun Robot&Automation field, Zhongshan Broad-ocean Motor launched an employee stock ownership plan in August, transferring a total of no more than 9.1 million shares (approximately 0.37% of the total share capital) to no more than 73 people at a price of 4.08 yuan per share to motivate the company's core team. Subsequently, Zhongshan Broad-ocean Motor joined the frenzy of A-share companies listing in Hong Kong. On September 22, it submitted an application to the Hong Kong Stock Exchange to issue overseas-listed shares (H shares) and list on the Main Board of the Stock Exchange to start a new global journey with an "A+H" dual-platform structure. According to the prospectus, Huatai International and Citibank are the joint sponsors of Zhongshan Broad-ocean Motor. On October 2, Zhongshan Broad-ocean Motor submitted a revised announcement of the overall coordinators, adding CICC and ICBC International as the overall coordinators for the company's listing in Hong Kong. Zhongshan Broad-ocean Motor stated that the funds raised from the Hong Kong listing will be used to advance the construction of the second phase of its production base in Morocco to enhance the company's global production capacity. At the same time, the company will strengthen research and development and technological innovation, develop next-generation DIGI motors, efficient controllers, and invest in emerging areas such as Siasun Robot&Automation joint modules, solid oxide fuel cells (SOFC/SOEC) technology, and axial magnetic flux motors. Additionally, the company will fully promote digital upgrades, and the remaining funds will be used for replenishing operating funds and general corporate purposes. In terms of performance, Zhongshan Broad-ocean Motor has achieved steady growth in recent years. For the years 2022 to 2024, Zhongshan Broad-ocean Motor's revenues were 10.93 billion, 11.288 billion, and 12.113 billion yuan, respectively, while the net profits for the same period were 425 million, 675 million, and 912 million yuan, respectively. By the first half of 2025, Zhongshan Broad-ocean Motor's revenue was 6.241 billion yuan, a year-on-year increase of 7.66%, and net profit was 640 million yuan, a year-on-year increase of 37.36%. This stable growth is the foundation for Zhongshan Broad-ocean Motor's push for H shares. Unveiling the logic behind steady growth in performance A detailed analysis of Zhongshan Broad-ocean Motor's business operations shows that the steady growth in performance is the result of the combined effects of the company's significant achievements in multiple areas. Firstly, Zhongshan Broad-ocean Motor has diversified its business operations, spreading the risks while opening up growth opportunities for the company. Established in 2000, Zhongshan Broad-ocean Motor has grown into a global leader in efficient motor and electric drive system suppliers over the past 25 years. It has established a three-tier business framework comprising building and home appliance motor business, vehicle powertrain system and key components, and fuel cell technology. According to the prospectus, the building and home appliance motor business is Zhongshan Broad-ocean Motor's traditional business sector and plays a significant role. From 2022 to 2024, this sector accounted for 58%, 54.8%, and 58.4% of Zhongshan Broad-ocean Motor's total revenue, with revenue from HVAC products being the core, accounting for 54.5%, 52.6%, and 55% of total revenue during the same period. The vehicle powertrain system and key component business accounted for 38.9%, 42.3%, and 41.5% of revenue from 2022 to 2024, including parts such as starters and generators and new energy vehicle powertrain systems and key components. In 2024, these two sectors accounted for 27.9% and 11.8% of the company's total revenue, respectively. It is evident that Zhongshan Broad-ocean Motor's diversified business layout has shown significant results and been directly reflected in its income structure. Secondly, Zhongshan Broad-ocean Motor is in a leading position in its diversified business layout areas, allowing the company to benefit from industry growth continuously. For instance, in the HVAC industry, Zhongshan Broad-ocean Motor ranked second globally among third-party HVAC electric drive solution suppliers with 115 billion in revenue in 2024, holding a 2.9% market share and ranking first in China and North America. From 2022 to 2024, revenue from HVAC products saw steady growth. In the vehicle industry, Zhongshan Broad-ocean Motor is one of the few domestic brands supplying crucial components to international Tier-1 vehicle manufacturers. The company's clients include mainstream vehicle manufacturers both domestically and internationally, with its integrated powertrain system of "motor + controller + reducer" supporting mainstream automotive companies like Xiaopeng and Chery. In 2024, Zhongshan Broad-ocean Motor ranked fifth in revenue from new energy vehicle powertrain systems among third-party suppliers in China. In terms of revenue from starter motors in 2024, Zhongshan Broad-ocean Motor ranked fourth globally and second among Chinese companies. Revenue from starter and generator business was 23.18 billion, 28.05 billion, and 31.19 billion from 2022 to 2024, reflecting rapid growth. Furthermore, Zhongshan Broad-ocean Motor is expanding its global presence, with sales from overseas accounting for 46%, 45.5%, and 45.1% of the company's total revenue from 2022 to 2024. This steady growth in domestic and international sales has driven the continuous increase in Zhongshan Broad-ocean Motor's total revenue. It is worth noting that the speed of profit growth for Zhongshan Broad-ocean Motor is significantly faster than the growth of revenue. From 2022 to 2024, revenue increased by a compound annual growth rate of 5.26%, while net profit showed a compound annual growth rate of 46.49%, surpassing revenue growth by 40 percentage points. This trend continued in the first half of 2025, with net profit increasing by 37.36%, significantly higher than the 7.66% revenue growth. This is due to the steady increase in gross margin and net margin for Zhongshan Broad-ocean Motor. From 2022 to 2024, the company's gross margin was 19.3%, 21.5%, and 22.2%, respectively, and its net margin improved from 3.9% to 7.5% during the same period. In the first half of 2025, the net margin further increased to 10.3%. While focusing on leading businesses, Zhongshan Broad-ocean Motor is accelerating its layout in emerging areas such as fuel cells and Siasun Robot&Automation. In terms of emerging trends and market competition, Zhongshan Broad-ocean Motor is expected to benefit from the continuous growth of the industry. For example, the global market for HVAC electric drive systems is projected to expand to 313 billion yuan by 2029, with a compound annual growth rate of 6.1% from 2024 to 2029. This growth is driven by the increasing demand for HVAC systems due to extreme climate conditions and global attention to energy efficiency and greenhouse gas emissions. Additionally, emerging areas such as internet data centers (IDC), energy storage facilities, and electric vehicle charging stations are expected to drive the growth of the HVAC electric drive solution market and contribute to the industry's expansion. In the global rankings of third-party HVAC electric drive system solution suppliers, Zhongshan Broad-ocean Motor held a 2.9% market share with 115 billion in revenue in 2024, ranking second in the industry. With the industry's rapid growth, Zhongshan Broad-ocean Motor is poised to continue benefiting from its leading market position, as is the case for the starter motor and generator market. According to Frost & Sullivan, the global market for starter motors and generators is expected to grow steadily at a rate of 5.4% from 2024 to 2029, reaching a total market size of 123.5 billion yuan by 2029. In 2024, Zhongshan Broad-ocean Motor ranked fourth globally in terms of revenue from starter motors and second among Chinese companies, holding a 3.3% market share. As the market develops, the concentration of the market is expected to converge towards leading companies, providing opportunities for Zhongshan Broad-ocean Motor to expand. In comparison, the powertrain industry has even greater prospects for development as the entire industry is still in a high-growth stage. Frost & Sullivan estimates that the global market for powertrain systems will reach 334.3 billion yuan by 2029, with a compound annual growth rate of 20.2% from 2024 to 2029. In the 2024 ranking of third-party powertrain system suppliers in China, Zhongshan Broad-ocean Motor's revenue of 1.5 billion accounted for a 1.6% market share, ranking fifth in the industry. However, when considering the proportion of revenue from overseas, Zhongshan Broad-ocean Motor ranks first. The rapid development of the industry may provide more opportunities for Zhongshan Broad-ocean Motor to grow. While continuing to focus on these businesses, Zhongshan Broad-ocean Motor has made progress in fuel cell technology. Its fuel cell systems and components based on PEM fuel cell technology are competitive in the medium and heavy-duty power and cross-regional transport markets. Hydrogen fuel cells are expected to become a power source for low-altitude aircraft, expanding the application of clean energy in the transportation sector. Furthermore, Zhongshan Broad-ocean Motor's SOFC technology is continually being researched and iterated. The third-generation MS-SOFC, which uses a metal base to lower operating temperatures and improve startup speed, lifespan, and cost-effectiveness, has the potential to be widely used in various cutting-edge scenarios. Additionally, through a combination of independent research and development, industry-university-research collaboration, and strategic investments, Zhongshan Broad-ocean Motor is accelerating its layout in cutting-edge fields like Siasun Robot&Automation. In February 2025, Zhongshan Broad-ocean Motor established the "Humanoid Siasun Robot&Automation Motor" project team, which has completed the design of the Siasun Robot&Automation joint module solution but has not yet generated revenue. By July 2025, Zhongshan Broad-ocean Motor had accelerated its layout in the Siasun Robot&Automation field. It collaborated with Tongji University to establish the "Advanced Technology Joint Research Center for Limbed Siasun Robot&Automation Execution Mechanisms." They completed the design of the Siasun Robot&Automation joint actuator module solution. During the same month, Zhongshan Broad-ocean Motor also invested in Mechamand (Xiongan) Siasun Robot&Automation Technology Co., Ltd., a well-known intelligent Siasun Robot&Automation company focusing on "AI+3D" vision technology. Zhongshan Broad-ocean Motor plans to explore deeper cooperation with the company. In the future, Zhongshan Broad-ocean Motor plans to further invest in the engineering and industrialization of key Siasun Robot&Automation module products. In summary, in the fields of HVAC, starters, and generators, Zhongshan Broad-ocean Motor has steadily benefited from the industry's growth with its leading market position being a key driver behind the company's steady performance improvement. The ability to maintain this momentum in the highly competitive and rapidly evolving powertrain system and key component sector will be crucial in determining Zhongshan Broad-ocean Motor's mid-term performance. The company's layout in fuel cells and Siasun Robot&Automation will determine the speed and height of its future growth. However, investors should also pay attention to the potential challenges that the current unpredictable international situation may pose to Zhongshan Broad-ocean Motor's global layout.