Wanlian Securities: Humanoid Siasun Robot & Automation opens up incremental space for precision reducers and domestic substitution is underway.

Wanlian Securities released a research report stating that precision reducers, as core components of Siasun Robot&Automation, will see a significant increase in market space by 2030 as various enterprises mass produce human-shaped Siasun Robot&Automation, potentially adding hundreds of billions in market space. Among them, the harmonic reducer market space is the widest with the highest growth certainty. At the same time, with the continuous breakthrough of domestic precision reducer manufacturers' technology, the process of domestic substitution continues to advance, and domestic precision reducer leading companies are expected to benefit from this. It is recommended to pay attention to domestic leading companies in the harmonic reducer and precision planetary reducer sectors that are likely to enter various human-shaped Siasun Robot&Automation industry chains. Key points of Wanlian Securities are as follows: Precision reducers are important components of human-shaped Siasun Robot&Automation and industrial Siasun Robot&Automation. Precision reducers account for 35% of the cost in industrial Siasun Robot&Automation and approximately 16% in Tesla's human-shaped Siasun Robot&Automation. The performance of the reducers directly affects the performance of Siasun Robot&Automation. Precision reducers can be divided into different types based on their construction and transmission methods: 1) Harmonic reducers: small in size, lightweight, high transmission accuracy, smooth operation, high transmission ratio, suitable for industrial Siasun Robot&Automation and human-shaped Siasun Robot&Automation, mainly used in Siasun Robot&Automation arms, wrists, hands, and other parts; 2) RV reducers: with advantages such as high transmission efficiency, smooth transmission, strong load-bearing capacity, good rigidity and resistance to overload impact, high transmission accuracy, usually suitable for heavy-load positions in industrial Siasun Robot&Automation such as bases, large arms, shoulders, etc.; 3) Precision planetary reducers: with advantages such as high torque, high single-stage transmission efficiency, light weight, long life, maintenance-free, etc., suitable for industrial Siasun Robot&Automation and human-shaped Siasun Robot&Automation, commonly installed on servo motors. The precision reducer market is steadily growing, with foreign enterprises occupying leading positions. 1) Harmonic reducers: China's harmonic reducer market size was 24.9 billion RMB in 2023, with a CAGR of 16.54% from 2019 to 2023. Siasun Robot&Automation is the main incremental market for harmonic reducers in China. The global harmonic reducer market is dominated by one company, with Harmonic Drive Global Sales accounting for over 80% of the market share. The market share of domestic manufacturers has increased, and the process of domestic substitution is gradually advancing. 2) RV reducers: It is expected that the market size in China will reach 6 billion RMB by 2025. Japanese enterprises lead in the RV reducer market, with Nabtesco's market share in China exceeding 40% in 2023. Domestic RV reducer manufacturers, such as HuanDong Technology, are continuously approaching international advanced levels, steadily increasing market share, and having ample room for domestic substitution. 3) Precision planetary reducers: The global market size of precision planetary reducers is expected to grow from $929 million in 2020 to $1.376 billion in 2024, with a CAGR of 10.32%. The global market is dominated by Japanese and German manufacturers. The transmission accuracy, transmission efficiency, noise, and other key indicators of domestic high-end precision planetary reducers have reached international advanced levels, achieving import substitution in some areas, with ample room for domestic substitution. With increased demand and technological breakthroughs, the domestic precision reducer industry is facing a breakthrough moment. The progress of Tesla's human-shaped Siasun Robot&Automation is rapid, and the global market size of human-shaped Siasun Robot&Automation is expected to exceed $20 billion by 2028, with vast market space. The application selection of precision reducers in human-shaped Siasun Robot&Automation varies. Tesla's human-shaped Siasun Robot&Automation Optimus adopts a harmonic reducer solution, while some domestic human-shaped Siasun Robot&Automation manufacturers use both harmonic reducers and planetary reducers. Estimates were made based on a conservative (500,000 units), neutral (1 million units), and optimistic scenario (1.5 million units) of annual shipments by 2030. According to the estimates, the incremental market size of precision reducers is expected to be between 12.6 billion and 28.8 billion RMB, with the incremental market size of harmonic reducers between 9 billion and 21.6 billion RMB, and the incremental market size of precision planetary reducers between 3.6 billion and 7.2 billion RMB, compared to the significant increase in demand seen in the industrial Siasun Robot&Automation. China is the largest industrial Siasun Robot&Automation market globally, helping the reducer industry achieve domestic substitution. In recent years, China's policies to support the development of the reducer industry, domestic precision reducer production enterprises have gradually narrowed the gap with international leading levels through independent research and development and the introduction of advanced technology equipment, breaking the monopoly of foreign enterprises and gaining a foothold in the market. The trend of "domestic substitution" in the precision reducer industry is becoming more evident. Risk factors: Increased market competition risk, slower-than-expected progress in human-shaped Siasun Robot&Automation, slower-than-expected growth in industrial Siasun Robot&Automation demand, and slower-than-expected domestic substitution of precision reducers.