China car suppliers can be early winners in the humanoid race, Morgan Stanley says

If the future is all about building mechanical mobility, whether on wheels or robotic legs, auto parts suppliers have a competitive edge. "We believe humanoid robots will bring a third wave of growth for auto parts suppliers," Morgan Stanley analysts said in a June 18 report. The authors include lead autos analyst Adam Jonas, industrial analyst Sheng Zhong and hardware technology analyst Andy Meng. The team upgraded two self-described Chinese Tesla suppliers and maintained a rating of overweight on another given expectations the companies can benefit from the coming rise of humanoids. This would be similar to how auto parts suppliers got a boost from the growth of electric cars and subsequently growth in "smart" cars with driver-assist capabilities. One of the parts companies, Sanhua , is scheduled to list in Hong Kong on Monday in addition to its current listing on mainland China's Shenzhen exchange. Already, at least two automakers — Tesla and Xpeng — are developing humanoid robots. Other car companies such as Zeekr and Volkswagen have teased how they're trying out humanoids at their factories. Auto suppliers "have the chance" to capture 47% to 60% of spending on parts and materials, according to Morgan Stanley estimates. In dollar terms, auto parts suppliers can account for around $15,000, or 60%, of each humanoid's production cost, the firm's report said. Other humanoid components such as screws and bearings aren't commonly used in cars, making machinery companies better poised to supply them, the report said. By 2050, Morgan Stanley predicts the humanoid market will be worth $800 billion in China and $5 trillion worldwide. As it's still early days, the analysts prefer "tier-1" module assemblers such as Sanhua since they "can secure assembly orders no matter which tech path is chosen." That's in contrast with "tier-2" component makers such as lidar or chip producers. A trio of sector picks Here are Morgan Stanley's three sector picks, all currently traded in mainland China: Tuopu — The firm issued a price target of 63 yuan, for upside of nearly 39% from Friday's close. Tuopu makes actuators, which enable mechanical movement in a car , and act as joints and muscles in humanoids. Morgan Stanley trimmed its price target on Tuopu due to softer Tesla orders, but maintained its overweight rating. The analysts expect Tuopu can supply humanoid actuator models as well as dexterous hand models for the robots. Actuator modules account for just under half of a humanoid's total cost, but even when incorporating a price drop, the total addressable market for the modules worldwide is likely to grow by 57% on an annual basis through 2030, Morgan Stanley predicts. "Such a material value composition offers revenue upside to Sanhua and Tuopu," the analysts said. Sanhua — The firm assigned a price target of 30 yuan, reflecting 20% upside from Friday's close. Morgan Stanley upgraded Sanhua to overweight from equal weight, and the firm raised the price target mildly on stronger-than-expected 2025 revenue and expectations for rising electric vehicle penetration worldwide. "We estimate that every 10ppt of global market share in humanoid actuator modules by 2030E would bring incremental revenue to Sanhua equal to 11% of 2024 total revenue," the analysts said. "To mitigate geopolitical risk, Sanhua has been setting up a plant in Thailand, and it expects to start production there from 3Q25." Xusheng — The firm gave the stock a price target of 12 yuan. Shares closed at 12.08 yuan on Friday. Morgan Stanley upgraded the stock to equal weight from underweight on expectations Xusheng's revenue will "recover modestly" as startup automaker Li Auto launches more battery-only electric cars. However, the analysts cautioned that Xusheng may see lower-than-expected revenue from Tesla and other customers. In terms of humanoids, Xusheng can supply casting and torso structural parts, the analysts said. It's still not fully clear how easy it is for the auto parts suppliers to directly shift to making humanoid parts. There are many questions about how quickly and how large the industry of human-like robots will become. The analysts also cautioned that despite Chinese humanoid parts suppliers' cost advantage over overseas peers, U.S.-China tensions could force businesses to choose more expensive alternatives.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

CNBC

an hour ago

• CNBC

U.S. calls on China to prevent Iran from closing Strait of Hormuz and disrupting global oil flows

U.S. Secretary of State Marco Rubio on Sunday called for China to prevent Iran from closing the Strait of Hormuz, one of the most important trade routes for crude oil in the world. "I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil," Rubio said in an interview on Fox News. China is Iran's most important oil customer and maintains friendly relations with the Islamic Republic. Iran's foreign minister warned earlier Sunday that the Islamic Republic "reserves all options to defend its sovereignty," after the U.S. bombed three key nuclear sites over the weekend. Iranian state-owned media, meanwhile, reported that Iran's parliament backed closing the Strait of Hormuz, citing a senior lawmaker. However, the final decision to close the strait lies with Iran's national security council, according to the report. An attempt to block the narrow waterway between Iran and Oman could have profound consequences for the global economy. Some 20 million barrels per day of crude oil, or 20% of global consumption, flowed through the strait in 2024, according to the Energy Information Administration. Oil prices could shoot above $100 per barrel if the strait is closed for a prolonged period, according to Goldman Sachs and consulting firm Rapidan Energy. Iran is the third-largest oil producer in OPEC, pumping 3.3 million barrels per day. The Islamic Republic exports at least 1.6 million bpd, with nearly 80% sold to China, according to the EIA. Rubio said it would be "economic suicide" for Iran to close the strait. "We retain options to deal with that," the U.S. secretary of state said. "It would hurt other countries' economies a lot worse than ours," Rubio said. "It would be, I think, a massive escalation that would merit a response, not just by us, but from others." The U.S. Fifth Fleet is stationed in Bahrain and tasked with protecting maritime trade in the Persian Gulf. Oil market participants generally believe the U.S. Navy would swiftly vanquish any attempt by Iran to block the Strait of Hormuz. But some analysts warn that the market is underestimating the risk. "They could disrupt, in our view, shipping through Hormuz by a lot longer than the market thinks," said Bob McNally, founder of Rapidan Energy and former energy advisor to President George W. Bush. Shipping could be interrupted for weeks or months, McNally said, rather than the oil market's view that the U.S. Navy would resolve the situation in hours or days. "It would not be a cakewalk," McNally told CNBC.

Business Upturn

3 hours ago

• Business Upturn

NSSC DEADLINE TUESDAY: ROSEN, RECOGNIZED INVESTOR COUNSEL, Encourages NAPCO Security Technologies, Inc. Investors to Secure Counsel Before Important June 24 Deadline in Securities Class Action

NEW YORK, June 22, 2025 (GLOBE NEWSWIRE) — WHY: Rosen Law Firm, a global investor rights law firm, reminds purchasers of securities of NAPCO Security Technologies, Inc. (NASDAQ: NSSC) between February 5, 2024 and February 3, 2025, both dates inclusive (the 'Class Period'), of the important June 24, 2025 lead plaintiff deadline. SO WHAT: If you purchased NAPCO securities during the Class Period you may be entitled to compensation without payment of any out of pocket fees or costs through a contingency fee arrangement. WHAT TO DO NEXT: To join the NAPCO class action, go to or call Phillip Kim, Esq. at 866-767-3653 or email [email protected] for more information. A class action lawsuit has already been filed. If you wish to serve as lead plaintiff, you must move the Court no later than June 24, 2025. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. WHY ROSEN LAW: We encourage investors to select qualified counsel with a track record of success in leadership roles. Often, firms issuing notices do not have comparable experience, resources, or any meaningful peer recognition. Many of these firms do not actually litigate securities class actions, but are merely middlemen that refer clients or partner with law firms that actually litigate the cases. Be wise in selecting counsel. The Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. Rosen Law Firm achieved the largest ever securities class action settlement against a Chinese Company at the time. Rosen Law Firm was Ranked No. 1 by ISS Securities Class Action Services for number of securities class action settlements in 2017. The firm has been ranked in the top 4 each year since 2013 and has recovered hundreds of millions of dollars for investors. In 2019 alone the firm secured over $438 million for investors. In 2020, founding partner Laurence Rosen was named by law360 as a Titan of Plaintiffs' Bar. Many of the firm's attorneys have been recognized by Lawdragon and Super Lawyers. DETAILS OF THE CASE: According to the lawsuit, throughout the Class Period, defendants made false and misleading statements. Specifically, they created the false impression that they possessed reliable information pertaining to NAPCO's projected revenue outlook and anticipated growth while also minimizing risk from seasonality and macroeconomic fluctuations. In truth, NAPCO's optimistic margin growth goals and demand reassurances for NAPCO's hardware sales fell short of reality; NAPCO was simply not equipped to adequately forecast demand for its products or otherwise minimized the impact of potential demand fluctuations to continue to promote its lofty margin projections which relied upon continually increased sales volumes. When the true details entered the market, the lawsuit claims that investors suffered damages. To join the NAPCO class action, go to or call Phillip Kim, Esq. at 866-767-3653 or email [email protected] for more information. No Class Has Been Certified. Until a class is certified, you are not represented by counsel unless you retain one. You may select counsel of your choice. You may also remain an absent class member and do nothing at this point. An investor's ability to share in any potential future recovery is not dependent upon serving as lead plaintiff. Follow us for updates on LinkedIn: on Twitter: or on Facebook: Attorney Advertising. Prior results do not guarantee a similar outcome. ——————————- Contact Information: Laurence Rosen, Esq. Phillip Kim, Esq. The Rosen Law Firm, P.A. 275 Madison Avenue, 40th Floor New York, NY 10016 Tel: (212) 686-1060 Toll Free: (866) 767-3653 Fax: (212) 202-3827 [email protected]

Yahoo

4 hours ago

• Yahoo

Mike Lynch's superyacht Bayesian lifted from the sea for tragic sinking probe

Tech tycoon Mike Lynch's superyacht has been lifted from the sea and taken to a town for investigations into the sinking that killed seven people. Billionaire Mr Lynch, 59, was one of the victims alongside his daughter Hannah, 18, when the Bayesian sank off Sicily last August 19. Morgan Stanley International bank chairman Jonathan Bloomer, 70, and his wife, Judy Bloomer, 71, also died, with inquests due to be held for the British nationals. READ MORE: Foreign Office issue stream of travel alerts following US strikes on Iran READ MORE: Which food and drinks are banned on TUI, easyJet, Ryanair and Jet2 flights? Fifteen people including Mr Lynch's wife, Angela Bacares, were rescued. British and Italian authorities are due to carry out a full probe into the yacht's sinking. The vessel was held above the water by one of Europe's most powerful floating sea cranes, which set off from the fishing village Porticello at around 1.10pm local time today (June 22). It was held in front of the crane as it moved. The vessel arrived in Termini Imerese, a town around 12 milies away at just after 3pm on Sunday. It will then be moved into a specially manufactured steel cradle, which has a tarpaulin underneath for pollution prevention. Salvage workers on site, not accompanying the vessel to port, are conducting a 'full sweep' of the seabed near Porticello for any potential debris, a project insider said. Italian prosecutors previously said raising and examining the yacht for evidence would provide key information for its investigation into the sinking. It will also aid the Marine Accident Investigation Branch (MAIB) report on what happened. Simon Graves, an MAIB investigator, previously told the PA news agency: "When the wreck is brought ashore, we'll be completing a full examination of the wreck and we'll be finding out all of the elements that might have contributed to the safety of the vessel." Further details such as 'escape routes' will be included in its final report on the sinking, according to Mr Graves, who added: "Once we get access to the vessel we'll be able to tell a fuller picture of activities on board and the sequence of events." The vessel was originally expected to be raised last month but salvage efforts were delayed after a diver died during underwater work on May 9, prompting greater use of remote-controlled equipment. About 70 specialist personnel had been mobilised to Porticello from across Europe to work on the recovery operation. Join the Manchester Evening News WhatsApp group HERE Mr Lynch and his daughter were said to have lived in the vicinity of London and the Bloomers lived in Sevenoaks, Kent.