EFORT(688165) 北京韬联科技·2024-09-30 13:00Investment Rating - The report does not explicitly mention an investment rating for the company [1] Core Views - The company has been in a continuous loss-making state since 2016, with cumulative net losses of approximately 840 million yuan and cumulative non-GAAP net losses of 1.57 billion yuan over eight and a half years [1] - The company's revenue in 2023 increased by 42% year-over-year to 1.89 billion yuan, but in the first half of 2024, revenue declined by 24% year-over-year [1] - The company's business is divided into two main categories: robot systems and system integration, with revenue contributions of 45% and 53% respectively in 2023 [1] - The company's gross margin has consistently been below 20%, and its net margin has been negative for a long time [2][3] - The company's stock price has been underperforming since its IPO, despite an initial surge of nearly 4 times on the first day of trading [4] - The company's major shareholder, Midea Group, reduced its stake by 1.8% in 2023, cashing out 1.03 billion yuan, and continued to reduce its stake in the first half of 2024, bringing its ownership below 5% [5][6] - The company's controlling shareholder and its affiliates increased their stake by nearly 2% in the first half of 2024 [7][8][9] Business Performance and Strategy - The company's overseas acquisitions, including CMA, EVOLUT, and WFC, have not performed well, with EVOLUT and WFC consistently reporting losses [10][11][12][13] - The company's overseas revenue has been weak, with only a significant increase in 2023 [14] - The company has been focusing on its robot business since 2021, aiming to become a leading brand in China's industrial robot industry and a global leader in the field [24] - The company has reduced the scale of its system integration business and shifted its focus to high-value-added projects in the automotive sector [25] - The company's robot business has shown strong growth, with revenue increasing by 86%, 20%, and 79% in 2021, 2022, and 2023 respectively [27] - The company's robot sales volume increased by 29% in the first half of 2024, significantly higher than the domestic market average growth rate of 5% [27] - The company has made significant progress in the localization of core components, with a controller localization rate of 99% and a domestic RV reducer usage rate of 98% in 2023 [33] Financial Health and Expansion Plans - The company plans to build a super factory and global headquarters in Wuhu, with a total investment of approximately 1.893 billion yuan, aiming to achieve a production capacity of 100,000 robots over 5-6 years [34][35] - The company's financial position is weak, with long-term negative operating cash flow and free cash flow, and a high debt-to-asset ratio of 48.4% as of the first half of 2024 [37][38][39][40] - The company's cash and cash equivalents, along with tradable financial assets, totaled 740 million yuan as of the first half of 2024, which is not sufficient to cover the planned expansion [40][42] Industry Context - The domestic market share of Chinese robot brands has been steadily increasing, from 31% in 2019 to 45% in 2023, and surpassing 50% in the first half of 2024 [34] - The company's robot business has achieved breakthroughs in the automotive and new energy vehicle sectors, with products being adopted by leading companies such as NIO, XPeng, and Li Auto [25][26]