Huaxin Securities: First coverage of Weihong Co., Ltd. with a Buy rating

HuaXin Securities Co., Ltd. Ren Chunyang and Lin Zijian recently conducted research on Weihong Co., Ltd. and published the research report “Leading Enterprise in China’s Industrial Control Field, Actively Expanding into the Robotics Sector.” Weihong Co., Ltd. received a “Buy” rating upon initial coverage.

Weihong Co., Ltd. (300508)

Deeply Cultivating the Industrial Motion Control Sector for Over 20 Years, Steady Growth in Core Business

Leading Industrial Control Enterprise with Steady Business Growth. The company’s products adopt a system architecture combining hardware and software. Hardware products include two main categories: motion controllers and servo drives. The motion controllers are further divided into integrated motion controllers and motion control cards. Motion control systems are at the core of industrial automation. With government policy support, downstream markets such as engraving and milling, water cutting, laser cutting, and precision glass processing are experiencing increased prosperity, which is expected to drive the company’s product market share to continue growing. In 2024, the company achieved total revenue and net profit attributable to parent (excluding non-recurring gains and losses) of 466 million yuan and 66 million yuan, respectively, representing year-over-year increases of 5.53% and 66.78%. From 2021 to 2024, the CAGR was 4.11% and 10.44%, respectively. The company maintains a healthy growth trend, with overall gross profit margin staying above 50%, and profitability remaining stable.

Laser + Metal Cutting Dual-Drive, Leading Position in Niche Markets

The downstream market space of industrial motion control systems is broad, with laser and metal cutting developing synergistically. The application fields of industrial control are becoming increasingly diverse, and the motion control market is beginning to segment. According to segmentation, the global market size for motion controllers is expected to grow from 65.32 billion yuan in 2024 to 104.54 billion yuan in 2031, with a CAGR of approximately 8.0% from 2025 to 2031; the global market for motion control cards is projected to increase from $780 million in 2024 to $1.74 billion in 2033, with a CAGR of about 9.6%; the global servo drives market is approximately $6.34 billion in 2024, with a CAGR of about 5.8% from 2024 to 2031. In downstream applications, the market size for motion control systems in laser cutting equipment in China is about 1.935 billion yuan in 2025, with a CAGR of approximately 7.09% from 2019 to 2025; the global CNC system market is expected to reach $27.4 billion by 2029, with a CAGR of about 6% from 2023 to 2029, both showing steady growth. Currently, the industrial motion control market is highly competitive, with high-end segments mainly dominated by overseas companies such as KEBA, B&R, Beckhoff, and American TIDA; domestic companies like Advantech, GSK, Inovance, Leadshine, and Weihong Co., Ltd. mainly focus on the mid- and low-end markets. Leveraging technological accumulation and customization capabilities, Weihong’s laser cutting control system holds a 20% market share in China’s low- to mid-power segment, ranking second in the industry; its engraving and milling control system has a market share of about 35%, ranking first.

The latest profit forecast details are as follows:

The above content is compiled by Securities Star based on publicly available information, generated by AI algorithms (Wangxin Algorithm Backup 310104345710301240019), and does not constitute investment advice.