For Minth Group, whose stock price has surged, is its robotics business a real opportunity or just a gimmick?

On February 9th, Minth Group (00425.HK) saw strong stock performance, opening significantly higher and surging over 9% intraday to hit a new high since January 2021. As of press time, the gain was 8.36%.

Over the past year, this automotive parts leader has driven its stock price up by more than 160%, thanks to steady growth in its core business and active expansion into the robotics field. Its performance stands out in the Hong Kong stock automotive parts sector, making it a representative case of a traditional manufacturer transitioning to an emerging track. However, while opportunities arise, the company also faces significant challenges and risks.

Betting on the Robotics Track, with a "Multi-Pronged" Layout

Minth Group's layout in the robotics field can be described as "multi-pronged," with a series of major partnerships gradually turning its strategic ambitions into reality.

The company announced on February 9th that it has reached a framework agreement with China's leading harmonic reducer manufacturer, Leader Harmonious Drive Systems Co., Ltd. (688017.SH), to establish a joint venture in the United States. The JV will focus on the design, manufacturing, and commercial expansion of humanoid robot joint module assemblies in North America. According to the agreement, the JV's initial total capital contribution is $10 million, with California Minth holding 60% and Leader Harmonious Drive Systems holding 40%.

This collaboration is a case of complementary strengths: Minth Group possesses global production layout, localized operation capabilities, and experience in precision manufacturing of automotive parts; Leader Harmonious Drive Systems is technologically advanced in high-performance harmonic reducers, holds a leading domestic market share, and supplies core components to top-tier robots like Tesla's (TSLA.US) Optimus. For Minth Group, the JV will help quickly build a localized R&D, production, and maintenance system to seize the first-mover advantage in the North American market.

Beyond North America, Minth's robotics collaboration network has extended to multiple global markets. In December 2025, the company signed a three-year strategic cooperation agreement with a European robot integrator to promote localized supply of core components. Domestically, it is cooperating with Zhiyuan Robot to jointly develop intelligent exterior trim, wireless charging, joint assemblies, and flexible manufacturing solutions for humanoid robots. Media reports indicate the company has completed multiple rounds of small-batch sample deliveries and has set up demonstration production lines within its internal factories.

Furthermore, the company has made breakthroughs in AI server liquid cooling, securing orders from a leading Taiwanese AI server manufacturer. The products have passed technical validation and have been delivered in batches since November 2025, with end customers covering global semiconductor companies. To support business expansion, the factory jointly built by Minth and Formant Technology in Jiaxing has achieved small-batch production, reaching mass production by the end of 2025, initially forming a dual-driver pattern of "robotics + AI liquid cooling."

However, despite the promising outlook, challenges remain. Technically, joint modules integrate multiple components like harmonic reducers, servo motors, and encoders, demanding extremely high standards for transmission accuracy and torque density, requiring continuous R&D investment to break through technical barriers. Cost-wise, the robotics industry is still in its early stages, with joint modules being highly customized and order volumes small, putting pressure on gross margins before economies of scale are achieved. Additionally, fluctuations in raw material prices like aluminum further squeeze profit margins.

The commercialization process also faces tests. The mass production and cost reduction speed of the humanoid robot industry have fallen short of expectations. A Morgan Stanley research report points out that the actual global shipment of humanoid robots in 2025 was less than 20,000 units, lower than some institutions' forecasts. Due to low yield rates and high customization, the mass production of joint modules is limited. Therefore, the robotics business is unlikely to contribute significantly to Minth Group's revenue in the short term, testing its long-term investment and patience.

Battery Box as the "Ballast Stone" of Performance, Robotics Business Awaits Scale

Although the robotics business has attracted significant attention from the capital market, the core supporting Minth Group's current performance growth remains its main automotive parts business, with the battery box business becoming the "main engine" of growth.

As a global leader in automotive exterior trim and body structural parts, Minth Group's business covers core products such as metal trim strips, plastic parts, aluminum parts, and battery boxes. Its customers include over 70 mainstream domestic and international automakers like BMW, Mercedes-Benz, Tesla, and BYD Company Limited (01211.HK), with business operations spanning 14 countries across three continents.

In recent years, the company has maintained stable profitability. In the first half of 2025, it achieved revenue of RMB 12.287 billion (in Renminbi, same below), a year-on-year increase of 10.8%; profit attributable to owners of the company was RMB 1.277 billion, up 19.5% year-on-year.

By business segment, the battery box performed most brilliantly, with first-half revenue reaching RMB 3.582 billion, a sharp increase of 49.8% year-on-year, and segment profit growing 67.5% year-on-year to RMB 824 million, becoming the core source of the company's profits. This growth benefited from the rapid development of the European new energy vehicle market and the company's successful entry into the supply chains of international customers like General Motors and Toyota Europe in the battery box field, along with deepening cooperation with domestic brands like BYD and Chery Automobile Co., Ltd. (09973.HK).

Minth Group's globalization strategy has yielded significant results. In the first half of 2025, international business revenue reached RMB 7.981 billion, a year-on-year increase of 21.6%, further raising its share of total revenue to 65%. The battery box and structural parts business in the European market grew rapidly, and orders in North America have basically achieved localized production, effectively mitigating tariff and geopolitical risks.

For Minth Group, the robotics business is a strategic layout for the future, while the automotive parts main business is the "ballast stone" of current performance. The high valuation given by the capital market reflects both expectations for the growth potential of the robotics track and recognition of the company's solid main business performance. In the future, how to maintain the resilience of the main business while driving the robotics business to break through technical and commercialization bottlenecks, achieving synergistic development between the "foundation" and the "new track," will be a continuous challenge for Minth to address.

For investors, it is necessary to see the growth opportunities brought by the transformation while remaining vigilant about the risks of new business expansion falling short of expectations, rationally viewing the balance between short-term stock price fluctuations and long-term value growth.

Author: Yao Yuan