Western Securities first gave Botai Auto Federation (02889) a “buy” rating: a high-end smart class track with leading card slots. It plans to acquire Chengdu Mingyi to enter the optical communication electronic chip circuit

The Zhitong Finance App learned that recently, Western Securities released its first in-depth research report covering Botai Auto Federation (02889), giving it a “buy” rating. The report estimates that the company's revenue for 2026-2028 will be 6.030 billion yuan, 8.487 billion yuan, and 11.074 billion yuan respectively, with year-on-year growth rates of 71.8%, 40.7%, and 30.5%, respectively.

The core logic in the report is “high-end cockpit” and “chip second curve” two-wheel drive. Currently, the company ranks first in the own-brand cockpit domain control market with a share of 25.18% or more. Mass production of L3 class cockpit domain control will definitely increase the value of bicycles; at the same time, it plans to acquire about 70% of Chengdu Mingyi's shares for no more than 1.4 billion yuan to enter the AI data center optical communication electronics chip circuit with a localization rate of only 7%, creating a long curve outside of the main business.

Revenue continues to increase, and high-intensity R&D investment builds long-term competitiveness

Research reports show that Botai Auto Federation was founded in 2009 and is a leading supplier of smart cockpit solutions in China. In 2021-2025, the company's revenue increased from 864 million yuan to 3,510 billion yuan, with a compound growth rate of 42.0%. In the first half of 2026, the company achieved revenue of 2,228 billion yuan, an increase of 105.1% over the previous year, of which the smart cockpit solution business revenue was 2.197 billion yuan, a significant increase of about 111% over the previous year.

In recent years, the company's R&D investment has continued to increase. The self-developed automotive-grade operating system Engine OS has a high degree of openness and compatibility, is deeply compatible with mainstream operating systems such as Hongmeng, Linux, Android, and QNX, and deeply collaborates with Kirin 9610A processors to strongly support the implementation of the “domestic chip+autonomous system” solution.

High-intensity R&D investment has promoted high-end products and AI implementation. Since 2026, Botai Auto Connect has continued to promote R&D and mass production of AI cockpits built based on Qualcomm's fifth-generation Snapdragon cockpit platform (8397/8797). The target site of a leading new energy company in China achieved mass production in the second quarter of 2026.

The mid-range and high-end cockpit domain control market benefits from the high-end trend of L3 class cockpits

According to data from the Gaogong Intelligent Vehicle Research Institute, in 2025, Botai Auto Union's domestic cockpit domain control market share of 250,000 yuan or more will reach 25.18%, ranking first. According to the company's prospectus, by the end of 2024, the company ranked first in the fixed number of high-end smart cockpit solutions equipped with Qualcomm Snapdragon 8295 chips in China.

According to the research report, as the L3 class cockpit domain control enters the large-scale mass production stage, the company is expected to simultaneously benefit from an increase in the penetration rate of cockpit domain control and an increase in the value of bicycles. In 2025, the number of L3 class cockpit domain control units was 221,000 units, and in January-April 2026 it reached 226,000 units. The company focused on the three high-end chip platforms Snapdragon 8295, Snapdragon 8397, and Kirin 9610A. Since 2026, it has successively obtained multiple targets based on Qualcomm and Kirin high-end chip platforms.

Western Securities expects the company's domain controller shipments to increase from 1.3 million units in 2025 to 182/228/2.73 million units in 2026-2028, and the unit price will rise from 2,325 yuan to 3,023/3,476/3,824 yuan, driving the revenue of smart cockpit solutions to reach 59.4/84.0/10.98 billion yuan respectively, an increase of 74%/41%/31% year-on-year.

It is proposed to acquire Chengdu Mingyi and enter the second curve of optical communication electronic chips

In August 2026, Botai Auto Federation announced that it intends to acquire about 70% of Chengdu Mingyi's shares, with a transaction consideration of no more than 1.4 billion yuan.

This is the first major industrial merger and acquisition since the company landed on the Hong Kong Stock Exchange. Chengdu Mingyi was founded in 2015 and uses the Fabless model. It is one of the few domestic enterprises that can mass-produce single-channel 100G TIA electronic chips. The products have been applied to 400G/800G optical modules, which solve the key link of high-speed interconnection of AI data centers. According to Botai Auto Federation's announcement, Chengdu Mingyi's revenue in 2025 is about 305 million yuan.

According to statistics from ICC Xinshi Consulting, the global data center side optical communication chip market will reach 2.09 billion US dollars in 2024, and is expected to reach 6.02 billion US dollars in 2029, with a compound growth rate of 23.6%. However, in the field of 25G and above optical communication electronic chips, Chinese manufacturers account for only 7% of the world's revenue, and there is plenty of room for domestic replacement.

Western Securities believes that the acquisition revolves around Botai Auto Association's “soft and hard core cloud” integrated overall development strategy and is expected to bring the following benefits to Botai Auto Federation: first, deepening the chip business layout, seizing high-speed data transmission demand opportunities brought about by smart car architecture upgrades, and forming a cross-cloud synergy effect; second, entering the core link of AI infrastructure to share the growth dividends of global AI infrastructure construction; third, customer and technology collaboration to deeply integrate leading customer resources and collaborate with both parties in smart cockpits, open source software systems, AI servers and communications Technical capabilities in fields such as chips.

Divergence between stock price and value, multiple catalytic factors support the “buy” rating

According to Western Securities, factors that have boosted the company's stock price include: rapid growth in the smart car market driving the company's performance growth; domain controller solutions are becoming high-end and unit prices continue to rise to drive revenue growth; as business volume continues to expand and scale effects are evident; and after completing the acquisition of Chengdu Mingyi, its optical communication chip market share increased significantly, driving revenue growth.

Based on optimism about the high-end trend of the company's smart cockpit business, the second growth curve of optical communication electronic chips, and subsequent performance, Western Securities covered it for the first time and gave Botai Auto Federation a “buy” rating.