China Merchants Securities: Large-scale profits will be achieved in 2026, with a target price of HK$35 for the initial “increase in holdings” rating for Jizhijia (02590)

The Zhitong Finance App learned that China Merchants Securities released a research report stating that Jizhijia (02590) is the world's largest AMR solution provider for warehouse fulfillment, solving the pain points of inefficiency, high cost, and poor flexibility of traditional warehousing. The company has high technical barriers integrating software and hardware, and customer stickiness is high. The penetration rate of AMR solutions has huge room for growth and rapid growth, and the company has fully benefited as a leader. Large-scale profits will be achieved in 2026, with an increase in holdings rating for the first time. The target price is HK$35.

The main views of China Merchants Securities are as follows:

The world's largest AMR solution provider, integrating software and hardware to create high barriers

Jizhijia is the world's largest AMR (autonomous mobile robot) solution provider for warehousing and fulfillment, with the most comprehensive solutions and the largest number of customers. The company uses robots to enable intelligent transformation in warehousing and logistics to solve the pain points of low efficiency, low reliability, high cost, and poor flexibility in traditional warehouses. Core competitive advantages: 1) Provide complex system solutions integrating software and hardware. It has mature robot software and hardware development capabilities, builds collaborative optimization algorithm platforms, and has a deep understanding of industry applications. Among them, robot group control algorithm technology is significantly ahead of peers, and the single-system robot scheduling capacity exceeds 5,000 units, which is more than 16 times the industry average. 2) Strong global delivery and service capabilities, contributing high profits overseas. Stable and efficient supply chain, global sales network, strong localization capabilities. About 80% of the company's revenue comes from markets outside mainland China. Competition in overseas markets is low, and profit margins are significantly higher than domestic markets. 3) It has high-quality customers, leading global brands, and high customer stickiness. The company's market share in 2024 was 9%, ranking first in the world for 6 consecutive years, and the customer repurchase rate was nearly 80%. Recognized and endorsed by leading global companies, our customers cover more than 40 countries and regions, and have served more than 65 Fortune 500 customers worldwide.

AMR solutions are growing strongly, and there is huge room for improvement in penetration

AMR solutions have huge potential and rapid growth: 1) AMR superiority. The AMR solution solves the problems of low fault tolerance, long deployment time, high installation cost, and poor scalability due to rigid serial connections in traditional warehouses. It has a more standard product. Using distributed systems, the modular design and high scalability of the solution are achieved through algorithms. The large-scale effect of product cost is remarkable, and it can be deployed quickly and flexibly expanded. 2) AMR market space. According to Insight Consulting, the 2024-29E global warehouse automation solutions market CAGR will exceed 11%, reaching 804 billion yuan in 2029. The global AMR solutions market CAGR reached 33%, reaching RMB 162 billion in 2029. The penetration rate of AMR solutions in the field of overall warehousing automation jumped from 8.2% in 2024 to 20.2% in 2029.

The first coverage gives an increase in holdings rating, with a target price of HK$35

The company's order volume in 2025-24 was over 25%, and its order volume increased by more than 30% year on year in 2025. It is expected that 2025-27E revenue will increase 32.2%/31.9%/30.4% year on year. It is expected to achieve adjusted profit in the 2025 fiscal year. Net profit for 2025-27E will reach -0.1/2.8/600 million yuan, and large-scale profit will be achieved in 2026. The company is valued at FY26E 10.0x P/S. The target price is HK$35, which is equivalent to 10.4x P/S of the average valuation level of a comparable company listed in AMR related businesses and Hong Kong Stock RoboDragon. Upside risk concerns may be included in the Hong Kong Stock Connect, increasing market attention. Downside risks focus on industry sentiment falling short of expectations and the risk of short-term liquidity shocks after cornerstone investors lift the ban.