New Stock Outlook | With stable performance aiming for H shares, can SOFC + robots open up future growth space for BROAD-OCEAN MOTOR?

Since the second half of this year, BROAD-OCEAN MOTOR (002249.SZ) has been quite active.

After accelerating its layout in the robotics field, BROAD-OCEAN MOTOR launched an employee stock ownership plan in August, transferring a total of no more than 9.1 million shares (approximately 0.37% of the total share capital) at a price of 4.08 yuan per share to no more than 73 people, in order to incentivize the company's core team.

Subsequently, BROAD-OCEAN MOTOR joined the trend of A-share companies going public in Hong Kong. On September 22, it submitted an application to the Hong Kong Stock Exchange for the issuance of overseas listed shares (H shares) and for listing on the main board of the exchange, aiming to embark on a new global journey with an "A+H" dual-platform structure.

According to the prospectus, Huatai International and Citigroup are the joint sponsors for BROAD-OCEAN MOTOR. On October 2, BROAD-OCEAN MOTOR submitted a revised announcement of the overall coordinator, adding CMB International and ICBC International as the overall coordinators for the company's listing in Hong Kong.

BROAD-OCEAN MOTOR stated that the funds raised from this listing in Hong Kong will be used to promote the second phase of construction of its production base in Morocco, enhancing the company's global production capacity layout. At the same time, the company will strengthen research and development and technological innovation, developing next-generation DIGI motors, high-efficiency controllers, and other products, with a focus on investing in emerging fields such as embodied robotic joint modules, solid oxide fuel cell (SOFC/SOEC) technology, and axial flux motors. In addition, the company will comprehensively promote digital upgrades, with the remaining funds used to supplement working capital and for general corporate purposes.

From a performance perspective, BROAD-OCEAN MOTOR has achieved steady development in recent years. From 2022 to 2024, BROAD-OCEAN MOTOR's revenue was 10.93 billion, 11.288 billion, and 12.113 billion yuan, respectively, while the net profits during the same period were 425 million, 675 million, and 912 million yuan.

By the first half of 2025, BROAD-OCEAN MOTOR's revenue was 6.241 billion yuan, a year-on-year increase of 7.66%, and the net profit was 640 million yuan, a year-on-year increase of 37.36%. The solid growth foundation provides BROAD-OCEAN MOTOR with confidence in pursuing H shares.

The Logic Behind Steady Performance Growth

A detailed analysis of BROAD-OCEAN MOTOR's business operations reveals that its steady performance growth is the result of the significant effectiveness of multiple layouts working together.

Firstly, BROAD-OCEAN MOTOR has achieved a diversified business layout, which not only disperses business operation risks but also opens up growth space for the company. Established in 2000, BROAD-OCEAN MOTOR has developed into a global leader in efficient motors and electric drive systems after 25 years of accumulation and sedimentation. It has established a three-tiered business structure comprising building and home appliance motor business, vehicle powertrain systems and key components business, and fuel cell technology.

According to the prospectus, the building and home appliance motor business segment, as BROAD-OCEAN MOTOR's traditional business segment, plays a "ballast" role. From 2022 to 2024, this business accounted for 58%, 54.8%, and 58.4% of BROAD-OCEAN MOTOR's total revenue, with HVAC product revenue being the core, accounting for 54.5%, 52.6%, and 55% of total revenue during the same period

The revenue share of the vehicle powertrain system and key components business segment from 2022 to 2024 is 38.9%, 42.3%, and 41.5%, respectively. This business segment includes two major parts: starters and generators, and powertrain systems and key components for new energy vehicles. By 2024, the proportions of these two parts in the company's total revenue will be 27.9% and 11.8%, respectively. It is evident that BROAD-OCEAN MOTOR's diversified business layout has achieved significant results, which is directly reflected in the revenue structure.

Secondly, BROAD-OCEAN MOTOR's diversified business layout is already in a leading position in related fields, allowing the company to continuously benefit from industry growth. For example, in the HVAC (Heating, Ventilation, and Air Conditioning) industry, based on the sales revenue in 2024, BROAD-OCEAN MOTOR ranks second among global third-party HVAC electric drive solution suppliers and ranks first in both the Chinese and North American markets. From 2022 to 2024, BROAD-OCEAN MOTOR's HVAC revenue was 5.952 billion, 5.945 billion, and 6.656 billion yuan, achieving steady growth.

In the vehicle industry, BROAD-OCEAN MOTOR is one of the few domestic brands that have entered the key component supply chain for international Tier-1 vehicle manufacturers. The company's clients include mainstream domestic and international vehicle manufacturers, and its integrated powertrain system of "motor + electronic control + reducer" supports mainstream automakers such as XPeng and Chery.

Based on the sales revenue of new energy vehicle powertrain systems in 2024, BROAD-OCEAN MOTOR ranks fifth among third-party suppliers in China. In terms of starter motor sales revenue in 2024, BROAD-OCEAN MOTOR ranks fourth in the global starter motor industry and second among Chinese companies. From 2022 to 2024, BROAD-OCEAN MOTOR's revenue from starters and generators was 2.318 billion, 2.805 billion, and 3.119 billion yuan, achieving rapid growth; during the same period, revenue from new energy vehicle powertrain systems and key components remained stable.

In addition, BROAD-OCEAN MOTOR continues to expand its global layout, forming a dual-driven development pattern of "domestic + overseas" markets. According to the prospectus, as of June 30, 2025, BROAD-OCEAN MOTOR has 15 production bases worldwide, six of which are located overseas, including the United States, the United Kingdom, Vietnam, Thailand, Mexico, and India. From 2022 to 2024, the proportion of BROAD-OCEAN MOTOR's overseas sales in the company's total revenue was 46%, 45.5%, and 45.1%, respectively. It is precisely due to the steady growth of domestic sales and the stable increase in overseas sales that have jointly driven the continuous rise in BROAD-OCEAN MOTOR's total revenue.

It is worth noting that the release speed of Broad-Ocean Motor's profits is significantly faster than the growth of its revenue. From 2022 to 2024, Broad-Ocean Motor's revenue was 10.93 billion, 11.288 billion, and 12.113 billion yuan, with a compound annual growth rate of 5.26%. In the same period, the net profit was 425 million, 675 million, and 912 million yuan, with a compound annual growth rate as high as 46.49%, exceeding the revenue growth rate by 40 percentage points. This trend continued in the first half of 2025, where the net profit growth rate of 37.36% far surpassed the revenue growth rate of 7.66%.

This is due to the steady improvement in gross margin and net margin achieved by Broad-Ocean Motor. From 2022 to 2024, Broad-Ocean Motor's gross margin was 19.3%, 21.5%, and 22.2%, respectively. Its leading market position and diversified business layout have driven the continuous improvement of its gross margin. On this basis, the gradual improvement in operational efficiency has increased the net margin from 3.9% to 7.5%, further rising to 10.3% in the first half of 2025.

While continuously deepening its leading business, accelerate the layout in cutting-edge fields such as fuel cells and robotics

From the perspective of industry development trends and market competition patterns, Broad-Ocean Motor is expected to benefit from the continuous growth of the industry. Taking the HVAC market as an example, from 2020 to 2024, global sales of HVAC electric drive system solutions increased from 192.7 billion to 232.7 billion yuan, with a compound annual growth rate of 4.8%. Frost & Sullivan stated that due to the ongoing spread of extreme weather conditions and the global focus on the energy efficiency and greenhouse gas emissions of HVAC systems, the global HVAC electric drive system solutions market is expected to continue to expand.

Moreover, emerging fields such as Internet Data Centers (IDC), energy storage facilities, and electric vehicle charging stations will accelerate the growth of the HVAC electric drive solutions market, becoming a new driving force for industry development. Therefore, it is expected that by 2029, the global HVAC electric drive system solutions market will grow to 313 billion yuan, with a compound annual growth rate of 6.1% from 2024 to 2029, indicating an increase in growth rate.

In addition, among global third-party HVAC electric drive system solution providers, Broad-Ocean Motor held a 2.9% market share with 11.5 billion yuan in revenue in 2024, ranking second in the industry. As the industry accelerates its growth, Broad-Ocean Motor is expected to continue benefiting from its leading market position, and a similar logic applies in the starter and generator market

Frost & Sullivan stated that with the continuous increase in the number of vehicles, there will be a huge demand for upgrades, repairs, and replacements in the used car market. Additionally, the continuous growth of emerging markets such as construction machinery and agricultural power machinery will jointly drive the substantial demand for starters and generators. It is expected that from 2024 to 2029, the global market for starters and generators will steadily grow at a rate of 5.4%, reaching a total market size of 123.5 billion yuan by 2029.

Moreover, the global market for starters and generators is relatively fragmented. In 2024, BROAD-OCEAN MOTOR ranked second in the industry with a revenue of 3.1 billion yuan, holding a market share of 3.3%. With the steady development of the market, the market concentration is expected to converge towards the leading players, which is likely to benefit BROAD-OCEAN MOTOR.

In contrast, the powertrain industry has greater development prospects, as the entire industry is still in a phase of rapid growth. Frost & Sullivan indicated that with the continued prosperity and demand growth in the downstream electric vehicle industry, the powertrain system industry is also experiencing rapid growth. It is expected that by 2029, the global market size for powertrain systems will reach 334.3 billion yuan, with a compound annual growth rate of 20.2% from 2024 to 2029.

In the ranking of third-party powertrain system suppliers in China for 2024, BROAD-OCEAN MOTOR's revenue of 1.5 billion yuan accounted for 1.6% of the market share, ranking fifth in the industry. However, from the perspective of overseas revenue proportion, BROAD-OCEAN MOTOR ranks first. The rapid development of the industry may provide BROAD-OCEAN MOTOR with more opportunities for growth.

While continuously deepening its efforts in the aforementioned businesses, BROAD-OCEAN MOTOR has achieved corresponding results in its layout of fuel cell technology. The fuel cell systems and components developed and produced by BROAD-OCEAN MOTOR based on PEM (Proton Exchange Membrane) fuel cell technology are competitive in the medium and heavy-duty power and cross-regional transportation markets. Additionally, hydrogen fuel cells are expected to become a power source for low-altitude aircraft, broadening the scenarios for clean energy in the transportation field. Furthermore, BROAD-OCEAN MOTOR's SOFC (Solid Oxide Fuel Cell) technology is in a continuous research and development iteration stage. The third-generation MS-SOFC uses a metal substrate, thereby reducing operating temperature and improving startup speed, service life, and cost-effectiveness, which is expected to be widely applied in numerous cutting-edge scenarios.

In addition, BROAD-OCEAN MOTOR is also accelerating its layout in cutting-edge fields such as robotics through a combination of "independent research and development + industry-university-research cooperation + strategic investment." In February 2025, BROAD-OCEAN MOTOR established a "humanoid robot motor" project team, which has completed the design of the robot joint module scheme but has not yet generated operating revenue By July 2025, BROAD-OCEAN MOTOR will accelerate its layout in the robotics field. It has collaborated with Tongji University to establish the "Joint Research Center for Advanced Technology of Embodied Robot Actuators" and has completed the design of the robotic joint actuator module solution. In the same month, BROAD-OCEAN MOTOR also invested in Meikaman (Xiong'an) Robot Technology Co., Ltd., a well-known intelligent robotics company focused on "AI+3D" vision. BROAD-OCEAN MOTOR will further explore deeper cooperation with this company. In the future, BROAD-OCEAN MOTOR plans to further invest in the engineering and industrialization of key robotic module products.

Overall, in the fields of HVAC, starters, and generators, BROAD-OCEAN MOTOR continues to benefit from industry growth due to its leading market position, becoming the core force behind the company's steady performance improvement. Whether it can continue to open up in the rapidly growing but fiercely competitive and technologically evolving powertrain systems and key components sector will be a critical factor determining BROAD-OCEAN MOTOR's mid-term performance. Its layout in the fuel cell and robotics fields will determine the company's future development speed and growth potential. However, the current unpredictable international situation may pose potential challenges to BROAD-OCEAN MOTOR's globalization strategy, which is also a key concern for investors