With the humanoid robot concept, can Minshi Group (00425) break out of the valuation trough?

Taking advantage of the humanoid robot concept, many investment banks are touting it. Minshi Group (00425), which has been falling for four years, seems to have seen a spring in valuation.

The Zhitong Finance App learned that Minshi Group suddenly surged on February 20. The increase reached 31% on the same day, then fluctuated at a high level, reaching 43% in just 6 trading days on the 27th. The company did not announce the reason for the change, but judging from market information, it is likely that it has caught on to the concept of humanoid robots. Yushu Technology ignited the humanoid robot concept, and on the same day, CICC released a research report saying that Minshi Group's business may extend to humanoid robots and low-altitude fields. This “smoke bomb” caused a massive influx of capital and greatly boosted the company's stock price.

Over the next six trading days, various brokerage firms such as Daiwa, Citi, and China Merchants Securities published research reports, all mentioning that Minshi Group has entered the humanoid robot business. Among them, Yamato recently discussed with management and obtained the latest news on its business, confirming that Minshi Group has begun to fully lay out a new business circuit and enter the humanoid robot industry chain. Driven by investment banking research reports and concepts, Minshi Group's stock price continues to rise.

In fact, Minshi Group's performance has maintained steady growth, but why is the valuation falling for four consecutive years from 2021 to 2024 and is already at a standstill. So, will humanoid robots be a lifesaver for Minshi Group's valuation?

Mass production will be carried out in 2025, and humanoid robots will be commercialized

Let's talk about the industry first. There are already signs that humanoid robots will usher in a wave of commercialization in 2025, which will bring 100 billion market cakes to all chains in the industrial chain.

The development of humanoid robots has gone through four stages: embryonic exploration stage, integrated development stage, high dynamic development stage, and intelligent development stage. Currently, intelligent development is gradually transitioning to large-scale application. In 2025, DeepSeek and Tesla's GROK 3 AI models were launched one after another. Humanoid robot terminal owners represented by Yushu Technology and Figure showcased the latest results, and mass production has entered the final sprint stage.

At the CCTV Spring Festival Gala in January of this year, the creative fusion dance “Yang BOT”, co-created by Yushu Technology and the Xinjiang Academy of the Arts, made a stunning appearance, bringing a new visual experience to the audience. In February, the company's Unitree H1 (priced at 650,000 yuan) and G1 (priced at 99,000 yuan) humanoid robots officially went on sale online in JD, and they were all sold out. In addition, domestic humanoid robots such as Leju and Zhongqing have also entered the public eye.

Overseas, progress is consistent in terms of technology and commercialization. On February 20, Figure launched Helix, the first visual-language-motion model to directly control the entire human upper body through natural language; the next day, Poland's Clone Robotics company launched the new robot Protoclone V1, which 100% replicates the human musculoskeletal system; on the third day, 1x Technology launched the latest humanoid robot prototype NeoGamma. With such intensive publication of results, the humanoid robot industry has entered a stage of full bloom and vigorous development.

Some major players announced mass production plans. For example, Musk plans to manufacture thousands of Optimus humanoid robots this year, increasing production by 10 times in 2026, with the goal of producing 50,000 to 100,000 humanoid robots; the CEO of Yushu Technology has stated that humanoid robots will be mass-produced on a large scale this year; in addition, Figure has been commercialized and successfully signed a second commercial customer. Brett Adcock once said that its major customer will bring the potential to deploy 100,000 humanoid robots to Figure within the next four years. Mass production of terminals is imminent, and the industrial chain is already in full swing.

Strong performance but discontinued dividends, new fields contributed or raised valuations

Minshi Group is mainly engaged in the auto parts business. In recent years, it has entered the new energy circuit and increased the battery box business. Currently, it has plastic parts, metal and trim, aluminum parts, TV boxes, etc. The business is not compatible with humanoid robots, but as an invisible champion in global automotive exterior parts, it has a global market, so of course it will not miss the humanoid robot market cake. According to reports, the company has set up the Minshi Research Institute to focus on the development of the new circuit, and its chairman Qin Ronghua has also invested about 10 million US dollars in xAI, an artificial intelligence company founded by Musk.

The robot parts business is not expected to generate revenue until 2026, but the current business performance is also strong, and the overall performance maintains a double-digit compound growth rate. In 2020-2023, the company's revenue compound growth rate was 18.1%. In 2024, judging from the growth rate in the first half of the year, it is still expected to exceed 10%. The battery box business was the biggest growth highlight, increasing its revenue share from 1.19% in H1 in 2020 to 21.56% in H1 in 2024.

In addition to the battery box business, Minshi Group is also actively seizing intelligent opportunities driven by the new energy wave to lay out intelligent exterior solutions with higher bicycle value. The products include smart front face systems represented by smart signs and smart light-emitting bumpers; smart tailgate systems represented by electric rear wings, penetrating taillights, and APS anti-clip strips. According to Shen Wan Hongyuan's research report, in 2023, the company received orders for intelligent integrated exterior systems one after another, and customers such as NIO, Xiaopeng, and Nissan began mass production of plastic tailgates. This business is expected to become a new growth pole after the battery case business.

It is worth mentioning that Minshi Group's profitability is also relatively steady, and basically maintained the same growth trend as revenue. In 2024, gross margin and net margin increased year-on-year. H1 was 28.5% and 10.63%, respectively. Mainly, the gross margin of the battery box business, which is growing well, maintained an upward trend. However, the company's ROE return is not too high. It is basically around 10% per year, and the annualized rate will be 11% in 2024.

Although the performance was steady, it was not positive in terms of dividends. Before 2022, the company maintained a high dividend payment rate, which stabilized at around 40%, but there have been no dividends since 2023. In terms of repurchases, it had a record of repurchases from August to December 2024, with a cumulative repurchase amount of 21 repurchases, with a cumulative repurchase amount of 142 million yuan. Perhaps due to buybacks, the company's stock price bottomed out and rebounded back to the upward trend.

The company, whose humanoid robot concept has recently become popular, is also crowded out and is optimistic about the company's future development. Among them, Bank of America Securities's profit forecast for 2024 to 2026 is 17%, 19%, and 18% year-on-year growth, respectively. However, institutional investors have mixed opinions. J.P. Morgan Chase is optimistic and continues to increase its holdings. The most recent increase in its holdings was on January 14. The total amount of the increase was about HK$27.2995 million, while Xiaomo was less optimistic. On January 3, the total amount of holdings was reduced by about HK$17.634,800.

Overall, Minshi Group's humanoid robot business has yet to contribute to performance, depending on the advent of a wave of commercialization in the industry. However, judging from the maturity of technology and participants' plans, 2025 is expected to usher in a wave of mass production, and the company's parts business will also exceed expectations to achieve performance contributions. The company's performance is relatively steady. The battery box and new energy enterprise parts business is the core growth point. However, the company has not paid dividends for two consecutive years, and shareholder returns are not strong enough.

The company's trading volume has increased in recent days, and the main capital inflow is obvious. Among them, Hong Kong Stock Connect bought a net 1.712 million shares, but it also accumulated large short-term profit orders, compounded by locked orders over the past four years, which fluctuated greatly in the short term. As far as the long term is concerned, the company's humanoid robot parts business has some room for imagination. Furthermore, if the dividend payment policy is restarted to attract long-term investors, its valuation may enter an upward channel.