【Top 100 Insights】NEXTEER under the Tesla halo, is the outlook worth 期待？

With the dust settling on the U.S. presidential election, "King of Understanding" Trump is set to make a strong return to the White House after four years.

Trump's victory has triggered significant fluctuations in assets such as the U.S. dollar, gold, and Bitcoin. In the stock market, Trump has boosted the stock prices of Tesla (TSLA.US) and Trump Media & Technology Group (DJT.US). On Wednesday, Eastern Time, Tesla's stock price soared by 14.75%.

Will Tesla Illuminate NEXTEER's Future?

It is well known that Musk has a close relationship with Trump. Some Tesla investors believe that the Trump 2.0 era will benefit major investor Musk's business empire.

"In our view, Tesla and its CEO Elon Musk may be the biggest winners of the election results, and we believe Trump's victory will help accelerate regulatory approval of Tesla's autonomous driving technology," said Garrett Nelson, a senior analyst at CFRA Research, on Wednesday.

As an important supplier of steering and powertrain systems for Tesla, NEXTEER (01316.HK) has also benefited greatly from this election, with its stock price performing well after Trump's victory.

On November 7, NEXTEER's stock opened high, rising over 12% at one point during the morning session, and as of the time of writing, it has increased by 4.79%. Additionally, another Tesla concept stock, Li Auto (00558.HK), also rose over 14% in the morning but subsequently fell.

Recently, Tesla's progress in autonomous driving has garnered significant market attention. In September of this year, Tesla's AI team released a product roadmap, which anticipates the launch of fully autonomous driving in China and Europe in the first quarter of 2025, pending regulatory approval.

With Trump set to take office, the Trump administration may expedite the approval of Tesla's autonomous driving plans, which is crucial for Tesla's advancement of autonomous driving technology in the U.S. market.

In a research report released in June, Anxin International stated that NEXTEER has a large number of orders on hand and speculated that NEXTEER has already secured North American orders for Tesla's Model Q, with the potential for deeper cooperation and orders for Model Q in Europe and China in the future.

Furthermore, Guozheng International previously stated that NEXTEER is a global leader in steering, and a rare target in the autonomous driving and Tesla supply chain.

Therefore, if Tesla's autonomous driving plans progress smoothly after the Trump administration takes office, NEXTEER is expected to achieve strong order volumes, coupled with the continuous commissioning of the company's projects, which is likely to drive sustained revenue growth.

Riding the Wave of Industrial Upgrading

Founded in 1906, NEXTEER was acquired by General Motors (GM.US) in 2009 and later came under the umbrella of Aviation Industry Corporation of China in 2011.

NEXTEER is a globally renowned motion control technology company, with a product and technology portfolio that includes electric and hydraulic power steering systems, steer-by-wire systems, steering columns and intermediate shafts, drive systems, and software solutions According to the company's official website, NEXTEER provides services to over 60 global customers, including BMW, Ford, General Motors, Renault-Nissan-Mitsubishi, Stellantis, Volkswagen, as well as Chinese manufacturers such as BYD, Chery, Great Wall, Geely, XPeng, and Indian automakers.

In terms of performance, NEXTEER achieved revenue of $2.099 billion in the first half of 2024, which was basically flat year-on-year; adjusted EBITDA was $197 million, a year-on-year increase of 6%. The improvement in profitability was mainly driven by increased efficiency and reduced costs, partially offset by unfavorable foreign currency exchange rates.

Driven by the growth of Chinese automakers, the company experienced continued strong growth in the Asia-Pacific region in the first half of the year, with revenue growth exceeding market levels by 12%.

However, due to poor market performance of customer projects and the conclusion of several customer projects in 2023, revenue in the North America division decreased by 6.3% year-on-year.

NEXTEER management has stated that they will launch more new projects in the second half of this year and expect to achieve a target of $6 billion in new order sales for the fiscal year 2024.

It is noteworthy that as competition intensifies, Chinese automakers are continuously increasing their investments in autonomous driving. NEXTEER has established research cooperation relationships with several domestic independent brands regarding steer-by-wire technology. Therefore, it is expected that domestic steer-by-wire orders will continue to increase in the future, bringing benefits to NEXTEER.

NEXTEER has also previously anticipated that it will collaborate with Chinese OEM manufacturers to launch its first steer-by-wire technology vehicle by 2026.

Anxin International believes in its research report that NEXTEER will ride the wave of the autonomous driving industry upgrade and grow into a leading enterprise in steer-by-wire technology. Guosheng Securities also believes that as the penetration rate of L3 and above autonomous driving gradually increases, NEXTEER, which leads in steer-by-wire technology, is expected to become one of the core beneficiaries.

NEXTEER has received multiple honors in the "Hong Kong Stock 100" selection due to its impressive performance, including the Most Growth Potential Award for new stocks, Comprehensive Strength Top 100, and Medium-sized Enterprises Top 50. Additionally, companies like Lijian Technology and Ganfeng Lithium (01772.HK), which are Tesla concept stocks, have also made it to the "Hong Kong Stock 100" list.

The official website of the Hong Kong Stock 100 shows that the 2024 Hong Kong Listed Companies Development Summit Forum and the 11th "Hong Kong Stock 100" Award Ceremony, organized by the Hong Kong Stock 100 Research Center and co-organized by Caihua News, Futu Securities, and supported by media institutions such as Hong Kong Ta Kung Wen Wei Finance Public Relations Group, will be grandly held on the afternoon of November 11, 2024, at the Hong Kong Convention and Exhibition Centre. This event will deeply discuss how to further consolidate Hong Kong's position as a global wealth management hub and capital market fundraising center, as well as how to enrich the financial technology ecosystem in the context of the new era It is reported that the Hong Kong Stock 100 Strong Research Center, based in the Guangdong-Hong Kong-Macao Greater Bay Area, has been committed to promoting financial innovation and development. Currently, the "Hong Kong Stock 100 Strong" list has become one of the value benchmarks and investment barometers of the Hong Kong capital market. The event calculates the list annually through accurate data and a series of scientific evaluation criteria, aiming to select well-performing and investment-worthy listed companies on the Hong Kong main board, releasing the list and awarding prizes. The "Hong Kong Stock 100 Strong" award ceremony has become an important platform for communication in the Hong Kong capital market, witnessing the deep integration and prosperous development of Hong Kong and the mainland economy, and will continue to promote the healthy development of the Hong Kong capital market and maintain Hong Kong's status as an international financial center.

The new "Hong Kong Stock 100 Strong" list is about to be announced. Which listed company among the Tesla concept stocks will successfully make it to the list? Stay tuned