Estun Accelerates Humanoid Robot Layout, Valuation Restructuring Imminent

Overview

J.P. Morgan issued research report, maintaining "Overweight" rating and 50 RMB target price for Estun Automation (002747.SS). The report's core logic is that Estun announced early full cash acquisition of its humanoid and collaborative robot subsidiary Estun Codroid, marking a strategic shift towards high-growth emerging sub-segments. Meanwhile, expectations for Midea Group to spin off and list KUKA provide a benchmark reference, highlighting the scarcity of robot platform companies with complete industry chain integration capabilities. Institutions believe that with humanoid robot business consolidated into scope, the market may re-evaluate Estun's valuation method, shifting from traditional Price-to-Earnings (PE) to Price-to-Sales (PS), while its current PS valuation is significantly below the global peer average, offering upside space.

Core views

Strategy Acceleration and Business Consolidation: Estun announced on July 2nd plans to acquire 100% equity of Estun Codroid and achieve financial consolidation via two wholly-owned subsidiaries using cash. This action comes earlier than the previously mentioned plan waiting for business scale targets, showing the company's determination to seize the humanoid robot and collaborative robot tracks. Codroid products cover 3-35kg load collaborative robots and core components, with wide downstream applications, helping to perfect Estun's "High-end Application + Solutions" strategic layout. Financial Impact and Profit Guidance: Although Codroid achieved sales of approx 50 million RMB in FY25 (accounting for about 1% of Estun's consolidated sales), net loss was approx 53 million RMB, still in investment phase. However, management remains confident in the group's overall profitability, reiterating the FY26E 5% Net Profit Margin (NPM) target, indicating the company has the ability to absorb Codroid's integration costs without damaging overall margin recovery. Industry Benchmarking and Valuation Restructuring: News that Midea Group plans to push for KUKA listing around 2027 provides the market with a window to observe the value of China-controlled integrated robot platforms. KUKA and Estun models are similar, both covering hardware, core components, and software digital capabilities. Currently Estun stock price year-to-date rose approx 72%, reflecting investor recognition of its execution capability. Considering the high growth potential of humanoid robot business, institutions believe valuation logic could shift to PS. Current Estun FY27E PS is approx 6x, while global humanoid robot peers average PS reaches 11x; even not considering new business direct contribution, existing valuation possesses appeal.

Analysis framework

This report adopts an "Event-driven + Relative Valuation" analysis framework. Firstly, by decoding the strategic event of Estun acquiring Codroid early, analyzing its impact on long-term competitiveness and product matrix; Secondly, introducing Midea spinning off KUKA listing as an external catalyst, using "Comparable Company Analysis" to establish industry benchmark points, emphasizing the scarcity of integrated platform models; Finally, at the valuation level, pointing out that with changes in business structure, market pricing logic may migrate from traditional manufacturing PE valuation to growth tech stock PS valuation, and through horizontal comparison with global humanoid robot peers' PS multiples, demonstrate the undervalued status of current valuation.

Methodology notes

• Valuation MethodPS valuation

  Price-to-Sales (PS) Valuation Method

  For technology/robotic companies in early high-growth stages, where profits have not been fully released or fluctuate greatly, the market often focuses more on revenue scale and market share, thus using PS rather than PE for valuation. The report notes that due to humanoid robot business consolidation, Estun's valuation logic may shift to PS.

• Competition and Strategy FrameworkMoat / competitive advantage

  Integrated Platform Model

  Refers to enterprise capability to simultaneously master hardware, core components (e.g., servos, controllers), and software algorithms. The report believes this full value chain coverage capability constitutes the competitive barriers for Estun and KUKA, and is being re-examined by the market against the background of KUKA planned listing.

• Event Gaming and Behavioral FinanceExpectation Gap / Expectation Management

  Strategic Actions Released Early as Signals

  Estun announced Codroid acquisition and consolidation early, exceeding market expectations of "waiting for business scale targets". This proactive strategy seen as key catalyst to boost investor confidence and drive valuation re-rating.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Estun Automation (002747.SS)

  Direct Beneficiary: Directly acquires humanoid robot and collaborative robot business through Codroid acquisition, perfecting product matrix and enhancing long-term competitiveness.

  Strengths

  Highly integrated business model; self-produced core components (servos, controllers etc.); clear profit roadmap; valuation below global peers.

  Weaknesses

  Codroid currently loss-making; uncertainty in new business commercialization progress.

  Comparison

  Compared to other domestic robot manufacturers, Estun has stronger core component self-sufficiency and complete industry chain integration advantages; compared to KUKA, Estun listed on A-share, liquidity and valuation elasticity may be more advantageous.

  Risks

  Supply chain management underperformance; Sales growth slowdown; Industrial robot upcycle shorter than expected.

Key data

• Codroid FY25 SalesApproximately 50 million RMBAccounts for approximately 1% of Estun's consolidated sales
• Codroid FY25 Net LossApproximately 53 million RMBIn loss stage
• FY26E Net Margin Guidance5%Management maintains this target, showing confidence in profit recovery
• Estun FY27E PSApproximately 6xHumanoid robot business impact not fully included
• Global Humanoid Robot Peer Average PS11xUsed as valuation benchmark reference
• YTD Stock Price GainApproximately 72%Significantly outperformed CSI 300 Index (+8%)

Impact & implications

The report believes this acquisition by Estun is not only financial consolidation but also deep embedding in strategic terms into high-growth tracks (humanoid/collaborative robots). With Midea pushing for KUKA listing, the market will pay higher attention and give valuation premiums to robot platform companies with complete industry chain integration capabilities. Estun relies on deep accumulation in industrial robots and Codroid's emerging business layout, expected to benefit from industry upturn and reconstruction of valuation system. For investors, subsequent focus should be on Codroid integration progress, unit economics transparency, and how Estun leverages its industrial platform to accelerate Codroid commercialization.

Risks

• Supply chain management and margin performance underperform expectations
• Sales growth underperform expectations
• Industrial robot upcycle duration shorter than expected

What to watch

• Codroid business integration milestones
• Transparency of Codroid unit economics
• Progress of Estun leveraging industrial platform to accelerate Codroid commercialization
• Specific plans and timeline regarding Midea Group KUKA listing