CMSC has released a research report stating that GEEKPLUS-W (02590) is the world's largest provider of Autonomous Mobile Robot (AMR) solutions for warehouse fulfillment, addressing the pain points of inefficiency, high costs, and poor flexibility in traditional warehousing. The company possesses high technological barriers through its integrated software and hardware offerings, resulting in strong customer stickiness. With immense room for penetration growth and rapid expansion in the AMR solutions market, the company, as an industry leader, stands to benefit substantially. It is projected to achieve profitability at scale by 2026. CMSC initiates coverage with an "Add" rating and a target price of HK$35. The main points of the report are as follows.
As the world's largest AMR solution provider for warehouse fulfillment, GEEKPLUS-W boasts the most comprehensive offering and the largest customer base. The company utilizes robotics to empower the intelligent transformation of warehouse logistics, tackling the shortcomings of traditional warehouses such as low efficiency, poor reliability, high costs, and inflexibility. Its core competitive advantages include: 1) Providing complex, integrated software and hardware system solutions. It possesses mature capabilities in robot software and hardware development, has built a collaborative optimization algorithm platform, and has a deep understanding of industry applications. Notably, its swarm control algorithm technology significantly leads the industry, with a single-system robot dispatch capacity exceeding 5,000 units, more than 16 times the industry average. 2) Strong global delivery and service capabilities, with overseas operations contributing high profits. It maintains a stable and efficient supply chain, a global sales network, and strong local implementation capabilities. Approximately 80% of its revenue comes from markets outside Mainland China, where competition is less intense and profit margins are significantly higher than in the domestic market. 3) A portfolio of high-quality, globally leading brand customers with high stickiness. The company held a 9% market share in 2024, ranking first globally for six consecutive years, with a customer repurchase rate of nearly 80%. It has gained recognition and endorsement from leading global enterprises, serving customers in over 40 countries and regions, and has cumulatively served more than 65 Fortune Global 500 companies.
The potential for AMR solutions is vast, characterized by strong, high-speed growth: 1) The superiority of AMRs. AMR solutions address issues inherent in traditional rigid, serial-process warehousing, such as low fault tolerance, excessively long deployment times, high installation costs, and poor scalability. They offer more standardized products, utilize distributed systems, and achieve modular design and high scalability through algorithms, leading to significant economies of scale in product costs, along with rapid deployment and flexible expansion. 2) The AMR market space. According to CIC, the global warehouse automation solutions market is expected to grow at a CAGR of over 11% from 2024 to 2029E, reaching RMB 804 billion by 2029. The global AMR solutions market is projected to grow at a CAGR of 33%, reaching RMB 162 billion by 2029. The penetration rate of AMR solutions within the overall warehouse automation field is expected to jump from 8.2% in 2024 to 20.2% in 2029.
CMSC initiates coverage with an "Add" rating and a target price of HK$35. The company's order volume CAGR from 2022 to 2024 exceeded 25%, with order volume growth exceeding 30% year-on-year in 2025. Revenue is forecast to grow 32.2%/31.9%/30.4% year-on-year for 2025-27E. The company is expected to achieve adjusted profitability in the 2025 fiscal year, with net profits for 2025-27E projected at -RMB 0.1 billion / RMB 2.8 billion / RMB 6.0 billion, achieving profitability at scale by 2026. The valuation is based on a FY26E P/S ratio of 10.0x, leading to the HK$35 target price, which is equivalent to the average P/S ratio of 10.4x for comparable listed AMR-related companies and leading robotics companies in Hong Kong. Upside risks include potential inclusion in the Hong Kong Stock Connect program, which could boost market attention. Downside risks involve industry sentiment falling below expectations and short-term liquidity pressure following the lock-up expiration of cornerstone investors.
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