Morgan Stanley has released a research report maintaining an "Overweight" rating on MINTH GROUP-100 (00425) with a target price of HK$50. The report notes that MINTH's management expressed a positive outlook during the earnings conference, targeting an acceleration in profit growth by 2026 compared to last year's 16% increase. The company anticipates a compound annual growth rate of 20% for its automotive parts business profits from 2026 to 2030. Given a fair value gain of over RMB 200 million recorded last year, along with additional profit contributions from new ventures such as liquid cooling for AI servers and eVTOL, the core profit growth target for this year is expected to exceed 20%. Management stated that rising aluminum prices have less than a 1 percentage point impact on the gross margin of the aluminum business and less than 0.3 percentage points on the group's overall gross margin, as aluminum accounts for only 10% to 20% of the cost of sales. Morgan Stanley remains cautious about the gross margin outlook, believing that suppliers will eventually need to share the burden of rising costs with automakers, potentially through price reductions on new orders. The group has raised its revenue guidance for the robotics business this year and next from RMB 100 million and RMB 500 million to RMB 500 million and RMB 1 billion, respectively. Revenue guidance for AI-related businesses has been increased from RMB 200 million and RMB 800 million to RMB 300 million and RMB 1.5 billion.
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