Zhaowei Electromechanical hit the limit up after updating its prospectus, with capital paying for 'dexterous hands'

Against the backdrop of "dual-market layout" becoming a normalized trend for Chinese concept tech stocks, the A-share market has rarely given emotional premiums for the mere act of "filing applications" itself. However, Zhaowei Electromechanical has become one of the few recent cases driven by the dual investment logic of capital and industry.

On December 22, Zhaowei Electromechanical's stock hit the upper limit in late trading. On the same day, the popular tech sector in the A-share market collectively rebounded; in terms of news, the company's recent update on its Hong Kong IPO prospectus quickly gained traction in the market.

As China's largest provider of micro transmission systems, Zhaowei Electromechanical has maintained stable growth in recent years, supported by the boom in the new energy vehicle market and the emerging robotics industry. In the first three quarters of 2025, the company's revenue increased by 18.7% year-on-year, with non-GAAP profit growth of 13.9%.

Backed by solid fundamentals, Zhaowei Electromechanical's A-share market capitalization has surged by over 57% this year, maintaining a technical uptrend for nearly three years. This move to list in Hong Kong has now placed this small champion under the spotlight of international capital.

Micro Transmission Leader, Growing Robot "Nerves"

Zhaowei Electromechanical is a typical domestic core equipment component supplier, established in 2001 and listed on the A-share market in 2020.

After more than two decades of evolution, Zhaowei Electromechanical has grown into a leader in China's micro transmission system industry. According to Frost & Sullivan's report, based on 2024 revenue, Zhaowei Electromechanical is China's largest and the world's fourth-largest provider of integrated micro transmission and drive system products, with market shares of 3.9% and 1.4%, respectively.

While its absolute market share is not particularly dominant, Zhaowei Electromechanical's performance is not aggressive but rather steady. From 2017 to 2024, its revenue grew at a compound annual growth rate (CAGR) of 15.7%, increasing from RMB 550 million to RMB 1.53 billion; during the same period, net profit attributable to the parent company grew at a CAGR of 24.3% to RMB 225 million. In the first nine months of 2025, its revenue continued to grow steadily by 18.7%, with profit increasing by 14.5% to RMB 182 million and gross profit reaching RMB 410 million.

Clearly, unlike many manufacturing companies that "trade scale for growth," Zhaowei Electromechanical's gross profit and profit growth rates are largely in line with revenue growth. As of the end of September this year, its book cash and cash equivalents stood at RMB 211 million, and its overall financial structure did not show signs of aggressive expansion.

However, a breakdown of its growth structure reveals that, compared to a typical stable manufacturing company, this is more of a technology platform company transitioning into robotics and high-end intelligent manufacturing.

Thanks to the wave of intelligent new energy vehicles, micro transmission systems are widely used in scenarios such as electric tailgates, steering systems, and seat adjustments. By 2024, automotive products accounted for over half of its revenue and continue to rise; while the market-favored "humanoid robot" concept still represents a small portion of its business, it is at least quantifiable now.

Historical development also shows that Zhaowei Electromechanical started with precision plastic parts and gears, later expanding into automotive electronics, consumer electronics, and communication equipment, and has significantly increased its focus on high-end products such as embodied robots, dexterous hands, and servo motors in recent years.

To date, Zhaowei Electromechanical has established three platform-based proprietary product lines: high-performance servo motors, drum motors, and dexterous hands. Among them, the dexterous hand has become the most symbolic part of its current technological leap. Not long ago, the company disclosed on an interactive platform that it has launched two bionic dexterous hands, DM17 and LM06, with 17 and 6 degrees of freedom, and customer expansion is underway.

Robotics Industry Booms, Institutions Call for Bullish Outlook

From an industrial perspective, the integrated micro transmission and drive system sector where Zhaowei Electromechanical operates is positioned as the "invisible hub" of hot frontier terminal tracks such as robotics, smart cars, and XR devices.

Frost & Sullivan data shows that the global market size for integrated micro transmission and drive systems reached RMB 111.3 billion in 2024 and is expected to grow at a CAGR of 13.3% to RMB 204.9 billion by 2029; during the same period, the Chinese market is projected to expand from RMB 33.2 billion to RMB 72.6 billion at a higher CAGR of 17.3%.

In terms of the value chain of industrialization, compared to OEMs, core component manufacturers often sense changes in orders and technological paths earlier. This means that before humanoid robots achieve mass production, dexterous hands, micro motors, and precision gears have already entered the "validation phase."

As one of the core suppliers, Zhaowei Electromechanical clearly understands that the landscape of this niche sector is highly fragmented, so it must seize this era's opportunity to achieve the next level of leap.

Moreover, its move to list in Hong Kong coincides with the explosive growth of the robotics industry. According to public information, the total disclosed orders for the domestic humanoid robot sector alone have exceeded RMB 4.6 billion, with over 20,000 units ordered.

For Zhaowei Electromechanical, the most critical question now is: as robots transition from prototypes to mass production, will it still stand in that "high-tech barrier, hard-to-replace, high-premium" segment?

In investor research, Zhaowei Electromechanical explicitly stated that the core goal of this H-share listing is not short-term financing scale but global capability building. Specifically, this includes supporting the localized operations of its U.S. and German subsidiaries; expanding overseas sales networks and customer penetration; building diversified financing channels to support mergers and acquisitions and external expansion; and enhancing international brand recognition.

From a results-oriented perspective, this choice is not contradictory to its customer structure. Over the years, Zhaowei Electromechanical has adopted a deeply customized model, along with strong product development capabilities and strict quality control, successfully entering the supply chains of global companies such as Huawei, OPPO, vivo, Bosch, BYD, Great Wall, Rosenberger, Xiaomi, and iRobot, accumulating rich endorsements for its brand value.

At the same time, geographically, Shenzhen is rapidly emerging as the primary hub for the mass production and application of humanoid robots in China during this wave of robotics industrialization, and Zhaowei Electromechanical, headquartered in Shenzhen, has a natural locational advantage.

Amid high industrial certainty, the company's slightly dominant first-mover advantage, and the right strategic layout, the capital market has already given a positive response. According to Tonghuashun statistics, in the past six months, at least 11 institutions have issued research reports on the company, unanimously giving "buy" or "overweight" ratings, with profit forecasts generally revised upward.

The market's judgment on Zhaowei Electromechanical is clearly based on a comprehensive valuation of performance delivery and technological positioning, rather than pure "concept elasticity."