As the concept of embodied AI continues to generate significant buzz in the A-share market at the end of 2025, Tianqi Automation has emerged as a key player in cross-border transformation, marked by three consecutive daily limit-ups and a substantial RMB 977 million private placement plan.

Dual-Track Strategy

This well-established company in automotive intelligent equipment and lithium battery recycling is striving to carve out a new niche in the wave of manufacturing intelligence through a dual-track strategy that combines its 'traditional core business' with 'cutting-edge sectors.'

However, beyond the stock market exuberance, challenges such as technological implementation hurdles, fierce market competition, and financial pressures cast a shadow over this transformation, making it a high-stakes gamble with both opportunities and risks.

Tianqi Automation's confidence in its transformation stems from the steady improvement in its fundamentals.

After recording a net loss attributable to shareholders of RMB 255 million in 2024, the company's performance witnessed a robust rebound in 2025. The third-quarter report revealed an operating revenue of RMB 1.964 billion, a 5.86% year-on-year decrease; however, net profit attributable to shareholders surged by 215.81% year-on-year to RMB 67.1996 million.

The primary driver behind this growth is the stellar performance of the intelligent equipment business, which contributed 67.55% of the revenue in the first half of the year. Overseas business soared by 64.23% year-on-year, with projects like BYD Indonesia and BMW Mexico acting as significant growth catalysts. Overseas projects accounted for over half of the order backlog.

Although the lithium battery recycling business is still at the bottom of its cycle, the stabilization of recycled material prices and the release of policy dividends have turned its gross margin positive to 0.79%, offering some performance elasticity.

Striking a Balance Between Tradition and Innovation

Against this backdrop, the company unveiled a private placement plan, allocating RMB 497 million to strengthen its automotive equipment core business, RMB 309 million to invest in embodied AI R&D, and RMB 290 million to bolster working capital. This clearly reflects a strategic intent to 'strike a balance between tradition and innovation.'

In its embodied AI布局 (which translates to 'layout' in English but is kept as is for cultural context), Tianqi Automation has adopted a differentiated 'scenario-first' approach.

Unlike tech companies that pursue general-purpose humanoid robots, the company focuses on addressing pain points in automotive manufacturing scenarios, advancing implementation through a closed-loop ecosystem of 'hardware + data + algorithms.' It signed a RMB 30 million industrial robot procurement contract with UBTECH, with deliveries scheduled to be completed by the end of the year.

Additionally, it has forged a strategic partnership with Foxconn Automotive, planning to deploy no fewer than 2,000 embodied AI robots within the next five years.

The Wuxi City Embodied AI Robot Industrial Data Collection and Training Center, which it leads, has commenced operations, accumulating high-quality training data through a 'automation + manual + model' quality inspection mechanism.

The Tianqi Automation R&D Center will concentrate on three key areas: constructing a data acquisition platform for automotive scenarios, developing vertical models for assembly and sorting, and upgrading decision-making systems for complex environments. Leveraging its deep industry experience in automotive equipment, it sidesteps the challenges associated with implementing general-purpose technologies.

This strategy of binding top clients and delving deep into vertical scenarios positions the company as a crucial 'scenario solution provider' in the industrial chain, fostering a complementary relationship with hardware manufacturers like UBTECH.

Furthermore, not only has the national level intensified technological R&D and infrastructure support, but Wuxi City has also designated humanoid robots as an independent industrial cluster.

For Tianqi Automation, this transformation not only solidifies its leading position in the automotive intelligent equipment sector but also holds the potential to achieve a value reconstruction, transitioning from being an 'equipment supplier' to an 'intelligent solution provider,' and riding the development express of a trillion-yuan sector.

Still Requires Time for Validation

Despite the opportunities, several risks cannot be overlooked.

At the technological level, embodied AI is still in its exploratory phase, with high data acquisition costs exceeding RMB 10,000 per robot per day. The R&D cycle for vertical models in complex scenarios is lengthy, and whether the RMB 309 million investment in R&D can establish core barriers remains uncertain.

Market competition is intensifying, with tech giants like Tesla and Huawei, as well as automakers like Chery and GAC Group, entering the fray. Peers like Universal Robots have already achieved mass production and delivery of robots, while Tianqi Automation still faces shortcomings in algorithm talent and underlying technologies.

Financial pressures also warrant caution. The company's asset-liability ratio of 63.57% is higher than the industry average, and RMB 1.89 billion in interest-bearing liabilities pose significant cash flow pressures. The uncertainty surrounding private placement approval may affect project progress, and equity dilution could trigger market sentiment fluctuations.

More critically, the automotive industry imposes stringent reliability requirements on intelligent equipment, with a long cycle from technological verification to mass production. The implementation effects of cooperative projects with Foxconn and others still require time for validation.

For investors, the current dynamic price-to-earnings ratio of 165 times far exceeds the industry average, and the high turnover rate of 43.6% after three consecutive daily limit-ups indicates intense trading activity. If subsequent substantial order support is lacking, the risk of valuation correction cannot be ignored.

This transformation represents both a breakthrough for Tianqi Automation to escape the low-valuation dilemma of traditional manufacturing and a comprehensive test of its technological accumulation and resource integration capabilities.

As the embodied AI sector transitions from 'concept hype' to 'rational implementation,' Tianqi Automation, with its scenario advantages, possesses differentiated competitiveness. However, whether it can ultimately translate its blueprint into sustained profitability still hinges on its ability to balance technological R&D, market expansion, and risk control.