Dongwu Securities International: Target price of HK$23 for the initial “buy” rating for Junsheng Electronics (00699)
The Zhitong Finance App learned that Dongwu Securities International released a research report stating that it covered Junsheng Electronics (00699) for the first time and gave it a “buy” rating. The estimated revenue for 2025-2027 is 626/670/71.9 billion yuan, +12%/7% YoY, and net profit to mother is 16.18/20 billion yuan, +67%/12%/11% YoY. Considering that the company is a company listed in AH and the company's long-term valuation flexibility in the robotics business, considering A/H's auto parts company, the average valuation level in 2026 is PE = 18x, the target market value is HK$35.6 billion, and the target price is HK$23.
The main views of Dongwu Securities International are as follows:
Joyson Electronics is an automotive technology supplier based in China with a global layout. Its business covers key components of automotive safety, automotive electronics, and robotics. The bank believes that the company is moving from the “shadow of Takata integration” to a new stage of “global safe cash bull+smart car Tier 1+ robot second curve”. The core investment logic includes the following three points:
1. One of the top three automobile safety companies in the world, cash flow restoration has entered a new stage.
Through the acquisition of KSS and Takata assets, the company has become one of the few suppliers in the world that can provide a full range of passive safety systems to multinational car companies, and the revenue scale of the safety business has stabilized at the level of tens of billions of yuan. As expenses related to historical recalls and restructuring are gradually cleared, compounded by the volume of orders for new energy models, the bank determined that the safety business is expected to maintain medium to high single-digit revenue growth over the next 3 years, while gross margin will rise steadily, contributing to stable cash flow.
2. China's smart car tier 1, seize the opportunity to upgrade the cockpit/network/domain control.
The automotive electronics sector revolves around smart cockpits, intelligent connectivity, ADAS/domain control and new energy management systems, and has formed a complete product line and platform-based R&D system. In the context of the accelerated intelligence of its own brands, the company relied on local responsiveness and global project experience to continuously obtain targets for mid-range and high-end model projects, and achieved breakthroughs in key domain control products such as central computing units (CCU). The next-generation cockpit domain control and 800V high voltage platform have received orders or project pilots, and it is expected that they will soon enter the new product cycle.
3. Forward-looking layout of robots to create the second curve of “robot domain control+head assembly”.
The company extended automotive safety and electronic technology capabilities, launched a robotic global controller thorac+chassis integration solution, and a robot head assembly integrating vision/audition/interaction, and established cooperation with many head robot players to have a first-mover card position advantage in the “personalised intelligence+industrial automation” wave. The bank believes that the robotics business is currently still in the early stages of investment, but judging from the technology path and customer structure, it is expected to expand a meaningful revenue volume within 3-5 years, bringing a valuation premium to the company.