Based on a comprehensive analysis of valuation levels, business layout, and industry trends, Zhongding Co., Ltd. (000887.SZ) is currently significantly undervalued. Its deep investments in emerging fields such as intelligent chassis, humanoid robots, and liquid cooling systems lay a solid foundation for rapid growth over the next 3-5 years. The following analysis will cover four dimensions: core logic, financial performance, technical barriers, and risk warnings.
1. Valuation Levels Significantly Below Industry Average, Indicating Room for Valuation Recovery
As of November 7, 2025, Zhongding Co., Ltd. has a PE (TTM) of 16.81 times and a PB of 2.08 times, significantly lower than the automotive parts industry average (PE 35.69 times, PB 3.13 times). In comparison with peers, Top Group has a PE of 44 times, and Baolong Technology has a PE of 38 times, while Zhongding’s valuation is only 38%-47% of the industry leaders. If we use a segment valuation method, its automotive business (net profit of 1.6 billion yuan) valued at 15 times PE would be 24 billion yuan, and the robotics business (net profit of 250 million yuan) valued at 80 times PE would be 20 billion yuan, totaling a target market value of 44 billion yuan, which represents over 50% upside potential compared to the current market value (29.3 billion yuan).
The formation of this valuation gap is mainly due to the market’s insufficient pricing of its robotics business expectations. Although the company has announced its entry into the Tesla Optimus supply chain and has submitted samples for testing, the current market value still primarily reflects its traditional automotive parts business and does not account for the high growth potential of emerging businesses such as robotic joint modules and magnetorheological dampers.
2. Business Layout: Intelligent Chassis + Humanoid Robots + Liquid Cooling Systems, Three Growth Engines Working Together
1. Intelligent Chassis: Accelerated Domestic Substitution, Order Reserves Support Performance
- Air Suspension System: Subsidiary AMK is one of the top three high-end suppliers globally, with a domestic market share exceeding 70%. Cumulative orders have reached 15.2 billion yuan, covering leading automotive companies such as Tesla, BYD, and NIO. In Q3 2025, air suspension business revenue grew by 45% year-on-year, with gross margin rising to 32%, becoming the first growth curve.
- Lightweight Chassis: Secured a 3.395 billion yuan order from a leading domestic brand, with a lifecycle of 6 years. The commissioning of factories in Slovakia and Mexico will further expand international market share.
2. Humanoid Robots: Outstanding Technology Transfer Capability, Mass Production Imminent
- Joint Modules: Through mergers and acquisitions, the company has integrated core technologies for harmonic reducers and planetary reducers, achieving a gross margin of 45% for harmonic reducers (higher than Green’s harmonic at 37.5%). Samples have been submitted to Tesla Optimus and certified, with a production capacity plan of 150,000 units for 2025.
- Magnetorheological Technology: The only company in China to achieve mass production of magnetorheological dampers, with a response time of 3-5ms (industry average 50ms), and a single unit value of 12,000 – 25,000 yuan. Orders are expected to exceed 1 billion yuan in 2025, supporting models such as the Zhongqing Robot SE01.
3. Liquid Cooling Systems: Driven by New Energy and Computing Power, Opening a Second Growth Curve
- Automotive Thermal Management: Total orders for battery pack liquid cooling system assemblies are 1.787 billion yuan (lifecycle 6 years), supporting models such as Tesla Cybertruck and BYD Seal, with the unit value increasing from 300 yuan for traditional vehicles to 1,200 yuan for new energy vehicles.
- Energy Storage and Supercomputing: Long-term agreements for liquid cooling seals with North American supercomputing centers (amounting to 120 million yuan), with globally leading fluorinated liquid sealing technology, compatible with Alibaba and Huawei data centers.
3. Technical Barriers and Financial Health: Supporting Long-term Competitiveness
1. Deep Technical Moat
- Global Mergers and Acquisitions Integration: By acquiring companies such as Germany’s AMK (air suspension) and the USA’s ACUSHNET (sealing systems), the company has mastered core technologies and built patent barriers, with over 5,000 patents accumulated.
- Leading R&D Investment Intensity: In Q3 2025, the R&D expense ratio was 5.48%, significantly higher than the industry average (3.2%), with a focus on magnetorheological fluid formulations and precision manufacturing of robotic joints.
2. Stable Financial Performance
- Improved Profitability: In Q3 2025, the gross margin was 25.78% (up 3.32 percentage points year-on-year), and the net margin was 10.4% (up 3.45 percentage points year-on-year), mainly benefiting from the increased proportion of high-margin businesses and economies of scale.
- Abundant Order Reserves: Orders on hand exceed 50 billion yuan, covering performance for the next 3-5 years, with intelligent chassis accounting for 60%, robotics business for 10%, and liquid cooling systems for 15%.
3. Significant Improvement in Cash Flow
In Q3 2025, the net cash flow from operating activities was 1.247 billion yuan (up 0.33% year-on-year), with accounts receivable turnover of 2.28 times (up 0.15 times year-on-year), and short-term debt repayment pressure (current ratio 1.43) improved by 12% compared to the beginning of the year.
4. Risk Warnings and Investment Strategies
1. Core Risks
- Technology Iteration Risk: Planetary roller screws may impact the harmonic reducer market, requiring attention to the company’s layout in robotic joint technology routes.
- Raw Material Price Fluctuations: Raw materials such as steel and rubber account for over 40% of costs; significant increases in commodity prices could squeeze gross margins.
- Exchange Rate Risk: Overseas revenue accounts for about 35%; appreciation of the yuan may affect foreign exchange earnings.
2. Investment Strategies
- Timing of Allocation: Currently at a low valuation (PE 16.8 times), and with key catalytic events such as the Tesla Optimus launch and ramp-up of magnetorheological production expected in Q4 2025, it is recommended to build positions in batches.
- Position Management: Aggressive investors may allocate 10%-15% of their positions, while conservative investors are advised to allocate 5%-8%, with a stop-loss line set at 15%.
- Long-term Tracking: Focus on the progress of robotic order conversions (mass production in Q4 2025), customer expansion for liquid cooling systems (Huawei/Alibaba orders), and the increase in air suspension penetration rate (target of 25% by 2026).
Conclusion
Zhongding Co., Ltd., as a leader in intelligent chassis and a dark horse in the robotics sector, is currently significantly undervalued compared to its intrinsic value. With the release of air suspension orders, mass production of magnetorheological technology, and ramp-up of humanoid robotics business, it is expected that the compound net profit growth rate will reach 25% from 2025 to 2027, corresponding to a PE of only 17 times in 2025, possessing both “undervalued + high growth” attributes. With policy support (“East Data West Calculation” and “Guidance on the Innovative Development of Humanoid Robots”) and technological breakthroughs resonating, the company is expected to replicate the valuation reconstruction path of Top Group (intelligent chassis) and Green’s harmonic (robotic reducers), becoming a “double hit” target in the technology manufacturing field.