Guosen Securities has issued a research report initiating coverage on MINTH GROUP (00425) with an "Outperform" rating. The company is expected to enter a period of rapid growth over the next five years, with projected net profits attributable to shareholders of 2.8 billion/3.3 billion/3.7 billion yuan for 2025-2027, representing growth rates of +20%/+16%/+14%. Earnings per share are forecasted to be 2.37/2.75/3.15 yuan, respectively. Based on a multi-angle valuation, the firm estimates a reasonable valuation range for the company of 50-59 HKD. Key points from Guosen Securities' analysis are as follows.

MINTH GROUP is a rare multi-category leading supplier in the auto parts sector, poised to benefit significantly from its global customer base and product expansion. It is a global leader in automotive exterior trim and the world's largest supplier of battery boxes and body structural components. Since beginning production of passenger car metal trim in 1999, the company has steadily expanded its operations. It now operates four main business units: Body Structure Systems, Plastic Parts Systems, Aluminum Trim, and Metal Trim. Through 77 global factories and offices, it supplies over 80 automotive brands worldwide. Furthermore, the company is capitalizing on industry upgrades driven by the AI wave, accelerating its second growth curve through ventures in robotics, liquid cooling, and low-altitude mobility.

The company's leading position in exterior trim remains solid, with stable cash flows supporting R&D for new products. MINTH started with exterior trim and has developed comprehensive capabilities, including an Aluminum Business Unit focused on aluminum trim and roof rails; a Plastic Parts Business Unit centered on grilles and tailgates; and a Metal Trim Business Unit specializing in elastic materials combined with stainless steel. It has maintained the top global market share in body moldings and roof rails for many years. In 2024, total revenue reached 16.27 billion yuan, a year-on-year increase of 6%. This consistent cash flow supports the advancement of new product development, such as smart front-end modules and body sealing components.

The company's battery box market share is accelerating, positioning it to be a primary beneficiary of Europe's accelerating new energy vehicle adoption. MINTH began exploring battery box operations in 2016, secured a project from Volkswagen's MEB platform in 2020, and generated 5.3 billion yuan in revenue from this segment by 2024, establishing itself as one of the world's largest aluminum battery box suppliers. With a clear target market, the company derived over 60% of its 2024 battery box revenue from Europe, capturing more than 30% of the local market share. Guosen Securities anticipates that as automakers like Volkswagen, BMW, and Mercedes-Benz密集 launch new energy models, coupled with Germany's reinstatement of electric vehicle purchase subsidies, the European battery box market could grow from 17 billion yuan in 2025 to 33 billion yuan by 2029. Domestically, the Chinese battery box industry is expected to expand from 40 billion yuan to 60 billion yuan, driven by the adoption of CTB/CTC technologies. Leveraging its advantages in material performance and strong customer relationships, MINTH is well-positioned to be a primary beneficiary.

The company is comprehensively expanding into robotics, liquid cooling, and low-altitude mobility sectors, demonstrating continuous diversification of its product portfolio. Aligning with industry智能化 trends and utilizing its accumulated expertise in aluminum, plastic parts, and customer relationships, MINTH is developing new business lines. In robotics, it is developing products like face shields and structural components, has signed a strategic agreement with Zhiyuan, and is collaborating with Siemens to explore wireless charging solutions. In the low-altitude mobility sector, it is developing airframe and rotor system products, has entered a strategic partnership with EHang Intelligent Equipment Co., Ltd., and has secured mass production orders. For liquid cooling, it is expanding into AI server liquid cooling cabinets and water distributors, having already received orders set for batch delivery starting in late 2025.

Potential risks include intensified competition leading to product price declines and margin compression, challenges in expanding overseas orders, and slower-than-expected progress in new business ventures.