New stock preview | Bright performance cannot conceal multiple hidden worries, how can Shanghai Junyi, with highly concentrated clients, break through homogenized competition?

In 2025, the capitalization wave of China's Siasun Robot & Automation industry exploded. According to incomplete statistics, about 30 Siasun Robot & Automation industry-related companies rushed to the Hong Kong Stock Exchange throughout the year, covering the entire industry chain segments including industrial Siasun Robot & Automation, service Siasun Robot & Automation, embodied intelligence, mobile Siasun Robot & Automation, and core components. Among them, companies like GEEKPLUS-W (02590), Zhejiang Sanhua Intelligent Controls (02050), YUNJI (02670) have successfully listed on the Hong Kong stock market. Emerging forces like Stander, Ueezy, and Xiangong Intelligence have also submitted listing applications, forming a significant sector aggregation effect. Entering 2026, this capitalization wave continues to surge. Companies like Yifei Technology, Guangdong Topstar Technology (300607.SZ), Jiawu Intelligent, and Jazhi Technology among others in the Siasun Robot & Automation industry have successively submitted listing applications to sprint for the Hong Kong Stock Exchange. One of the newest entrants in this lineup is Shanghai Junyi, which focuses on industrial automation, further strengthening the lineup of the "Siasun Robot & Automation army" in the Hong Kong stock market. It is understood that Shanghai Junyi has submitted its listing application to the main board of the Hong Kong Stock Exchange on January 23, with Haitong International as its exclusive sponsor. According to Zhishi Consulting, based on global revenue in 2024, Shanghai Junyi ranked eleventh and twelfth in the Chinese markets for new energy battery module and PACK automation production line solutions, as well as automotive welding automation production line solutions, respectively. Meanwhile, in the global revenue calculation for the NEV battery tray welding automation production line solution in 2024, Shanghai Junyi ranked second among Chinese companies. This shows that Shanghai Junyi has a considerable presence in the industrial segmentation field. In terms of performance, Shanghai Junyi has achieved steady growth. According to the prospectus, in 2023 and 2024, Shanghai Junyi's revenue was approximately 511 million yuan, 614 million yuan, with net profits of 26.71 million yuan and 35 million yuan, respectively. In the first three quarters of 2025, Shanghai Junyi's revenue was 564 million yuan, a year-on-year increase of 26.67%, with a net profit of 58.172 million yuan, an 88% increase year-on-year, showing a trend of accelerated development. With the high popularity of the Siasun Robot & Automation industry in the capital market and Shanghai Junyi's impressive performance, can it achieve a high valuation in the IPO? Through the company's prospectus, key clues can be gleaned in this regard. Establishing growth engines in the new energy track, advancing cost reduction, and efficiency improvement to accelerate profit release Shanghai Junyi's development history can be traced back to 2009 when the company started as a welding and laser inspection system integrator, establishing strong expertise in automation welding technology and precision manufacturing processes. By building business in automatic welding of car body assemblies and automotive parts, the company established solid customer relationships with leading car manufacturers. As the automotive industry transitions to electric vehicles, Shanghai Junyi expanded its welding technology to the production of battery trays for new energy vehicles. Through the battery tray welding business, Shanghai Junyi established close cooperation with power battery manufacturers, gradually gaining market recognition for its automation capability in the new energy field. Building on this, Shanghai Junyi expanded its operations to new energy battery modules and PACK automated production line solutions to meet the growing demand from battery manufacturers for highly automated mid-to-late stage assembly solutions, ensuring quality consistency, traceability, and production efficiency under large-scale production. Recently, Shanghai Junyi has extended the new energy battery module and PACK automated production line solutions to provide services to energy storage battery manufacturers, recording scaled revenue from energy storage battery production lines in the first three quarters of 2025. Currently, Shanghai Junyi's business mainly consists of two parts: the new energy battery module and PACK automated production line solutions and the automotive welding automated production line solutions, including battery tray automated welding lines, automotive parts automated welding lines, and white body automated welding lines. According to the prospectus, the sustained growth of Shanghai Junyi's performance is mainly due to the rapid expansion of the new energy battery module and PACK automated production line solutions. In 2023, the revenue of this business was 71.717 million yuan, accounting for only 14% of the total revenue, but by 2024, the revenue of this business increased by 316.03% to nearly 300 million yuan, accounting for 48.6% of the total revenue. By the first three quarters of 2025, this business accounted for 64.3% of the revenue. Clearly, the new energy battery module and PACK automated production line solutions have become a crucial driving force for Shanghai Junyi's continued revenue growth. The continuous rapid growth of Shanghai Junyi's new energy battery module and PACK automated production line solutions is mainly due to the company seizing the industry opportunities in the new energy vehicle sector. With the intensification of competition in the new energy vehicle industry in the last two years, various links in the industry chain have initiated cost reduction and efficiency enhancement strategies. Battery manufacturers have accelerated the introduction of automated production lines to maintain price advantages, boosting market demand for Shanghai Junyi's products. This conclusion is also supported by changes in the revenue structure of customers. In 2024, revenue from new energy vehicles accounted for 83.9% of Shanghai Junyi's total revenue, a 21.5 percentage point increase compared to the previous year. By the first three quarters of 2025, this proportion had increased to 94%. In contrast, revenue from traditional internal combustion engine vehicles has rapidly declined, from 22.8% in 2023 to 15.2% in 2024, and further to 4.6% by the first three quarters of 2025. It is worth noting that in 2024, revenue from Shanghai Junyi's automotive welding automated production line solutions recorded 311 million yuan, a decrease of approximately 25.95% compared to the previous year. Shanghai Junyi stated that this was mainly due to the high base caused by concentrated delivery of the battery tray automated welding business in 2023, and the company strategically shifted its focus to the new energy vehicle battery module and PACK production line solutions. By the first three quarters of 2025, this business had returned to a growth trajectory. In terms of profitability, Shanghai Junyi's net profit growth rate is significantly higher than its revenue growth rate, primarily due to economies of scale and the implementation of cost reduction and efficiency improvement measures. In 2024, Shanghai Junyi's net profit growth rate was 31.03%, which was nearly 11 percentage points higher than its revenue growth rate. This was mainly because the gross profit margin increased by 1.7 percentage points to 18.8% during the period, and the ratio of total expenses to total revenue decreased from approximately 12.89% to 10.86%, a reduction of 2 percentage points, accelerating profit release. By the end of the first three quarters of 2025, Shanghai Junyi's net profit growth rate reached 88%, far exceeding the 26.67% revenue growth rate, primarily because the ratio of total expenses decreased to 9.32%, compared to 11.51% in the same period of 2024. Thus, Shanghai Junyi's impressive performance is derived from the right development strategy, rapid adjustment of resource focus to strengthen the new energy battery module and PACK automated production line as a core growth engine, and the re-emergence of the automotive welding automated production line, as well as the continued implementation of cost reduction and efficiency improvement measures, achieving sustained and steady growth. Slowing industry growth exacerbates homogenized competition, high customer concentration is detrimental to stable development Undoubtedly, Shanghai Junyi's impressive performance is not only due to the correct development strategy it has adopted but also relies on a crucial premise, which is the continuous expansion of the industry in which it operates, providing solid support for the company's stable development. According to data from Zhishi Consulting, from 2019 to 2024, the market size of the global new energy battery module and PACK automated production solution industry increased from 7.14 billion to 23.29 billion yuan, with a compound annual growth rate of 26.9%. During the same period, the market size of the global automotive welding automated production line solution industry increased from 28.49 billion to 53.13 billion yuan, with a compound annual growth rate of 13.3%. The rapid growth of the industry has brought development dividends to Shanghai Junyi. Looking ahead, Zhishi Consulting believes that the market size of the global new energy battery module and PACK automated production solution industry is expected to increase from 23.29 billion yuan in 2024 to 47.79 billion yuan in 2029, with a compound annual growth rate of 15.5%. At the same time, the market size of the global automotive welding automated production line solution industry is projected to increase from 53.13 billion yuan in 2024 to 82.48 billion yuan in 2029, with a compound annual growth rate of 9.2% during that period. Clearly, the two tracks in which Shanghai Junyi operates are expected to continue to expand rapidly in the coming years, allowing Shanghai Junyi to continue to benefit from the industry's growth. However, it is worth noting that the slowing growth in the industry also implies an increasingly fierce market competition, as the industry may gradually move towards a red ocean market. In fact, whether it is in the market of new energy battery module and PACK automated production solutions or in the market of automotive welding automated production line solutions, a highly competitive and highly fragmented industry structure is evident. For example, in the Chinese market for new energy battery module and PACK automated production solutions based on global revenue in 2024, the top ten players only held a market share of 28.1%, with Shanghai Junyi ranking eleventh with a market share of 1.3%. Looking at the market share of the top ten players, while Company A holds the top position with a market share of 5.6%, the following three companies have the same market share, forming a strong second-tier group that closely follows the leading position, indicating that the leading position is not yet stable. From the fifth to the eleventh position, the revenue and market share differences among companies are very small, forming a fiercely competitive "mid-range camp." This situation indicates that in the current stage where there are no disruptive differences in technology or the market, competition between companies of similar sizes is intense, with any one having difficulty in pulling ahead easily. This leads to significant homogenized competition and a higher likelihood of price wars. With the slowing growth of the industry, competition in the mid-range will intensify. A similar pattern is seen in the industry of automotive welding automated production line solutions. In this industry environment, the path for mid-range companies to break through lies not in becoming "bigger and broader" but in becoming "deeper and sharper," that is, achieving extreme differentiation in technology, market, cost, or ecology on one dimension to carve out their own advantageous territory and transform from a "follower" to an "irreplaceable player" in the seemingly ossified landscape. However, Shanghai Junyi may face certain challenges if it wishes to achieve a breakthrough from a technological perspective due to its relatively limited research and development expenditure level. According to the prospectus, in 2023 and 2024, Shanghai Junyi's research and development costs accounted for 6.11% and 5.28% of the total revenue, respectively. This indicator stood at 4.61% in the first three quarters of 2025, showing a clear downward trend compared to around 5.46% in the same period of 2023. Clearly, the already limited research and development costs are showing a significant downward trend in terms of proportion, which is not conducive to building long-term technological competitive barriers. At the same time, high customer concentration is also a challenge that Shanghai Junyi needs to face. As per the prospectus, in 2023, 2024, and the first three quarters of 2025, revenue from the top five customers accounted for 70.3%, 75.3%, and 68.7% of Shanghai Junyi's total revenue, respectively. Moreover, revenue from the largest customer accounted for 28.6%, 28.2%, and 31.6% of the total revenue in the respective periods. A high customer concentration can constrain Shanghai Junyi significantly in terms of bargaining power, risk resistance, and growth ceiling. Any changes in the procurement strategies or cooperative relationships of top customers can directly impact the stability of Shanghai Junyi's revenue. Additionally, Shanghai Junyi's ability to further prove its potential in globalization will be another key factor affecting its valuation level. Shanghai Junyi stated in the prospectus that it strives to build a comprehensive overseas sales and service network and deepen its penetration in mature European and North American markets. However, there seems to be a gap between its global revenue structure and strategic statements. From 2023 to the first three quarters of 2025, the proportion of revenue from mainland China has been increasing year by year, accounting for 53.1%, 66.9%, and 81.7%, respectively. This indicates a shrinking trend in overseas business contribution. If Shanghai Junyi fails to make substantial breakthroughs in the expansion of overseas markets, and globalization does not become the "second curve" supporting the company's long-term growth, then Shanghai Junyi's growth narrative will rely more on a single driver in the domestic market, potentially limiting its valuation space. In summary, Shanghai Junyi has successfully built the battery module and PACK automated production line solutions as core growth engines through its forward-looking layout in the new energy track and has achieved revenue and profit growth through cost reduction and efficiency improvement measures. However, behind its impressive performance lie multiple challenges that pose uncertainty for its future development. On one hand, Shanghai Junyi needs to consolidate its position in a market environment where industry growth is slowing down and homogenized competition is intensifying, but its research and development expenditure proportion is decreasing. On the other hand, high customer concentration and a shrinking proportion of revenue from overseas markets bring structural risks, testing the company's growth sustainability and resilience. Therefore, Shanghai Junyi's ability to seize industry opportunities while effectively addressing these constraints will be crucial in determining whether it can achieve long-term stability and success.