CICC: The development of embodied robots drives cable demand, optimistic about the growth of domestic cable manufacturers' supporting capabilities

According to the Zhitong Finance APP, China International Capital Corporation (CICC) released a research report stating that in recent years, the embodied robotics industry has entered a rapid development stage. Domestic cable manufacturers began to support main engine manufacturers in research and development and small-batch delivery during the industry's 0-1 stage, while also having good localization support and cost advantages. For example, leading main engine manufacturers like Yushu have achieved small-batch shipments and have begun to realize the importance of the mechanical properties and service life of cables for the robot body. The embodied robotics cable industry has high entry barriers and significant market potential, and is expected to grow in tandem with leading main engine manufacturers. It is recommended to pay attention to the growth opportunities of domestic cable manufacturers.

CICC's main viewpoints are as follows:

Cables are the blood vessels and nervous system of robots, and the requirements for embodied robotics cables are even higher.

Robot cables refer to cables used by robots in motion environments that meet special requirements such as high flexibility and high physical performance. They can be divided into power cables and signal cables based on functionality. According to downstream applications, robot cables can be categorized into industrial robot cables and embodied robot cables. A horizontal comparison of the two reveals that embodied robot cables require better flexibility, faster and more accurate signal transmission capabilities, as well as lightweight and integrated designs, making the overall technical difficulty higher. Additionally, the industry is in the 0-1 stage, with no clear industry standards yet.

The development of embodied robots drives cable demand, and domestic cable manufacturers are expected to grow.

CICC pointed out that since 2023, there has been a noticeable policy and industrial resonance in the field of embodied robots. Humanoid robots, robotic dogs, and other forms of embodied robots have entered the small-batch production stage, and robot manufacturers are gradually realizing the significant impact of cables on robot performance and service life. Domestic cable manufacturers began to support main engine manufacturers in research and development and small-batch delivery during the industry's 0-1 stage, while also having good localization support and cost advantages. It is expected that domestic main engine manufacturers like Yushu and Zhiyuan will drive the growth of the local supply chain through mass production, and domestic cable manufacturers are likely to become the main suppliers for domestic main engine manufacturers, potentially supplying overseas main engine manufacturers in the long term based on mature supply capabilities.

Technology and certification are short- to medium-term barriers, while cost reduction capabilities are also key in the long term.

CICC believes that the barriers for robot cables in the short to medium term are technology and certification, while cost must be considered in the long term. 1) Technology: Cable manufacturers need to have the composite capability from material selection and structural design in the laboratory phase to the process realization in mass production, with the highest barrier being the know-how in process realization. 2) Certification: Industrial robot customer certification takes 1-2 years, and embodied robot cables may face higher requirements. At the same time, embodied robot main engine manufacturers often collaborate with cable manufacturers for pre-research and development, which may result in higher customer stickiness for embodied robot cables. 3) Cost: In the long term, there is a clear demand for cost reduction downstream, and cost will become a core competitive factor in the industry. Increasing the localization rate of raw materials and production yield may be the main ways to reduce costs.

Regarding targets

We are optimistic about domestic cable manufacturers benefiting from the growth of the robotics industry chain and recommend: Wanma Co., Ltd (002276.SZ), which has already achieved mass production of embodied robot projects. Other companies in the industry chain include: XINHONGYE (301310.SZ), XINYA (605277.SH), GOLDCUP (002533.SZ), Qifan Cable (605222.SZ), and HUNAN VALIN WIRE&CABLE (001208.SZ) Risk Factors

The commercialization of embodied robots is below expectations, uncertainty in technological development, and policy support is less than anticipated