In a remarkable turn of events in the stock market, the share price of a prominent company named Naisite surged to a peak of HKD 6.02 on February 21, marking its highest level since September 2022. This impressive leap represents a staggering increase of 27.8% compared to the closing price of HKD 4.71 on February 10. Over the course of the month, the stock has seen an astonishing peak gain of 68.2%. Data indicates that, as of February 20, the net capital inflow for Naisite reached a remarkable HKD 349 million over the last ten trading days.

The impetus behind this stock market phenomenon appears to be the explosive popularity of a technology called DeepSeek, which has injected new vitality into the autonomous driving sectorVarious automobile manufacturers have swiftly announced partnerships that integrate DeepSeek's technology, leading to significant capital interest in publicly traded companies within the smart driving supply chain, with Naisite being heavily scrutinized by investors amidst this fervorComplementing this surge in interest, BYD, a major player in the automotive industry, unveiled a new smart driving strategy on February 10, proclaiming plans to standardize intelligent driving technology across all its vehicle modelsThrough a scale effect, BYD is achieving low-cost integration and rapid iterations of smart driving features, significantly accelerating the adoption of such technologies and propelling the rapid development of the entire smart driving sectorAs a key component of this supply chain, Naisite stands to be a substantial beneficiary of these shifts.

However, Naisite's stock performance cannot solely be attributed to current market trends; the company's robust business capabilities and forward-thinking strategic layout also play pivotal rolesAs a leader in automotive steering systems, Naisite specializes in Electric Power Steering (EPS) systemsThese systems utilize high-precision steering control technology that adjusts based on driving conditions and vehicle speed

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In congested city environments, drivers experience easier steering, while at high speeds, they benefit from a stable steering feel, greatly enhancing safety and stabilityNotably, EPS systems operate independently from the engine, powered instead by batteries and motors, which significantly reduces fuel consumption and promotes environmental sustainability.

Naisite is also at the forefront of the emerging Steer-by-Wire (SBW) technology sector, which eliminates the mechanical connection between the steering wheel and the steering mechanismInstead, it employs electronic signals to control steering, resulting in higher steering accuracy and the elimination of mechanical deformation and gapsFurthermore, the vehicle's traditional feedback experience is simulated through sophisticated algorithms, filtering out bumps to enhance driving comfortThe variable transmission ratio design also simplifies the mechanical structure, reducing costs while increasing functional flexibilityFrom a safety perspective, the removal of the intermediary shaft increases the crumple distance in the event of a collision, providing better protection for passengersIn terms of intelligent cockpit development, this technology supports the folding or hiding of the steering wheel during L3 and higher-level autonomous driving, offering more space for cabin designWith these advantages, Naisite has secured vital projects with several automobile manufacturers, affirming its technical prowess in the marketplace.

From a product lineup perspective, Naisite boasts an extensive and diverse array of offeringsAside from its core EPS and SBW systems, its portfolio includes steering columns and intermediary shafts (CIS), hydraulic power steering (HPS), and dynamic transmission systems (DL), all of which contribute to a competitive and comprehensive product line, allowing the company to establish a strong presence across different market segments.

On a geographical scale, Naisite has expansive business operations that span North America, Asia-Pacific, Europe, and South America

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In terms of revenue distribution, North America accounts for 55%, Asia-Pacific makes up 25%, while Europe and other regions contribute 20%. In North America, Naisite's deep-rooted relationships with General Motors have cultivated a solid customer base, allowing the company to quickly respond to local needs and regulatory standards, providing tailored products and servicesThe Asia-Pacific region, particularly the Chinese market, has become a vital growth engine for the global automotive industry in recent yearsNaisite has actively targeted China, and on January 15, 2025, it inaugurated a new facility in Changshu, Jiangsu, spanned across approximately 137 acresThis state-of-the-art facility incorporates advanced automation production lines, modern testing laboratories, and various test tracks, focusing on the production of dual gear-type electric power steering systems (DPEPS) and modular gear-type electric power steering systems (mPEPS), significantly enhancing production capacity to meet the growing demand for components in new energy vehicles in the Asia-Pacific region.

When considering customer relationships, Naisite enjoys a broad and high-quality clientele worldwideThe EPS products have widespread applications in the global market, with over 80% of vehicles utilizing these systems, and an approximate average selling price (ASP) hovering around USD 200. Currently, Naisite has captured about 15% of the global market shareIts customers include globally recognized brands such as BMW, Ford, General Motors, Renault-Nissan-Mitsubishi, Stellantis, and Volkswagen, alongside Chinese players like BYD, Chery, Great Wall Motors, Geely, and XPeng, as well as automotive manufacturers from IndiaThis diverse customer base reflects the company's ability to meet varied market demands across different regionsIn recent years, Naisite has also been making strategic adjustments to its customer mix, favoring partnerships with domestic brands and emerging automotive companies, thereby deeply engaging in numerous projects initiated by these new players, offering fresh opportunities for growth as they gain traction.

The future of Naisite looks promising, particularly in the context of intelligent driving

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Steer-by-wire technology is gradually usurping Electric Power Steering systems, emerging as a critical focus area in the automotive industryCentral to steer-by-wire technology is its ability to convert driver actions into electronic signals transmitted through cables to the actuators, enabling autonomous vehicle control through a collaboration between sensor units and artificial intelligence chipsProjections from the financial firm Shen Da indicate that, by 2025, the unit value of steer-by-wire systems could reach around 4,000 RMB, corresponding to a market scale of approximately 85 billion RMB, growing further to an anticipated 239 billion RMB by 2030, reflecting a compound annual growth rate of 57% from 2022 to 2030.

With its existing leadership in the global steer-by-wire domain, Naisite stands shoulder to shoulder with a few elite firms such as BoschIt has already established partnerships with major overseas new energy vehicle manufacturers and developed close collaborations with leading Chinese automotive startups like NIOOwing to the high technical threshold of steer-by-wire technology, the market landscape is poised for consolidationShould Naisite reach a million units shipped in the next two years, it would substantially bolster its revenues and profits, providing additional momentum for continued stock price increases.

From a profitability restoration perspective, the stability observed in the upstream and downstream industry dynamics suggests that Naisite's profitability could rebound to the stable levels seen prior to 2021, especially in light of expectations that no significant price drops will occur in 2025. If the company can achieve a net profit margin exceeding 4% by 2025, its earnings could approximate USD 200 millionAs of the market close on February 21, Naisite's total market capitalization stood at HKD 14.66 billionIf the company's annual profit reaches USD 200 million, converted to Hong Kong dollars at the current exchange rate, this implies a price-to-earnings ratio of under ten times.

Furthermore, according to forecasts by Anxin International, Naisite is projected to reach revenues of USD 4.36 billion, USD 4.65 billion, and USD 5.00 billion over the years 2024 to 2026, with net profits attributable to shareholders estimated at USD 80 million, USD 150 million, and USD 210 million, respectively

Such projections signal an impending enhancement in profitability, suggesting a potential return to reasonable or even undervalued levels of valuation.

Currently, Naisite’s price-to-book ratio is below 1, indicating that the asset values are not fully reflected in their stock prices, allowing investors to acquire the company’s assets at a relatively lower priceWith a sound guarantee of asset quality, there exists considerable investment potentialAs of June 30, 2024, Naisite's debt-to-asset ratio is recorded at 40.61%, which is considerably lower than the industry alert line, signifying minimal financial risk and a manageable debt burdenThis provides ample asset support for its business development, laying a crucial foundation for future profit growth and value enhancement.

In summary, Naisite's solid foundation in automotive steering systems, proactive positioning in the steer-by-wire segment, dual catalysts of upgrading traditional business and performance recovery, coupled with opportunities stemming from the transformation within the smart driving supply chain ignited by DeepSeek, collectively position the company favorably within the marketplaceAs the industry advances and the company progresses with its strategies, Naisite appears poised to reap ongoing benefits in the futureWith the robust support of numerous favorable factors, the path for sustained stock price appreciation is firm, making it a company worth keeping an eye on for investors.