China Automation and Machinery: What‘s New from Citi Call – Laifual Drive (3952.HK, Not Covered)

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China Automation and Machinery: What‘s New from Citi Call – Laifual Drive (3952.HK, Not Covered)

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10 Jul 2026 09:19:24 ET │ 12 pages

China Automation and Machinery

What’s New from Citi Call – Laifual Drive (3952.HK, Not Covered)

CITI'S TAKE

Jamie Wang AC

We hosted a conference call with the mgmt. of Laifual Drive (3952.HK) – +852-2501-2772

China’s 2nd largest harmonic reducer maker with 21.4% market share in jamie.ck.wang@citi.com

2025, according to China Insights Consultancy. Key takeaways are 1) high

component self-made ratio, fast delivery, and more SKU determine Laifual’s Eric Lau

competitiveness; 2) due to strong demand, Laifual aims to increase its +852-2501-2726

capacity from currently 50k/month to 80k/month by the end of 2026 and eric.h.lau@citi.com

further to 200k/month by 2027, in order to fulfill its harmonic reducer

shipment targets of 600k-700k/1.5mn unis in 2026/27 (vs. ~291k in 2025);

3) mgmt. guided the revenue to reach Rmb400mn/700mn-750mn in

2026/27, with NPM improving to 10%-15%, and the humanoid robot

contribution to increase from 15% of total shipments in 2025 to ~30% in

2026. We see positive implications to Leader Drive (LD; 688017.SS) given

stronger harmonic reducer demand from humanoid robots, despite

intensifying competition potentially.

Competitiveness – Mgmt. believes that Laifual’s strength lies in 1) high SKU – the

number of SKU is closer to that of Harmonic Drive System (HDS; 6324.T) and higher

than that of LD; 2) short delivery – 3-4 weeks vs. peers’ 1.5 months; and 3) high

component self-made ratio – Laifual has the capability to design gear tooth which

leads to better durability (20,000 hours, 5-year warranty vs. LD’s >10,000 hours and

3-year warranty). It also manufactures bearings so that its reducers could better