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Nexteer Automotive Group Limited (HK:1316)
:1316

Nexteer Automotive Group (1316) AI Stock Analysis

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HK

Nexteer Automotive Group

(OTC:1316)

Rating:73Outperform
Price Target:
HK$6.00
▲(7.91%Upside)
The overall stock score of 72.8 reflects Nexteer's solid financial foundation and promising growth prospects highlighted during the earnings call. The company's strategic initiatives and effective management of tariff challenges contribute positively. However, technical indicators suggest limited short-term momentum, and valuation metrics indicate overvaluation, which tempers the overall score.
Positive Factors
Market Demand
New bookings from Chinese automakers reached a new high of 39%, surpassing the previous year's 28%, indicating strong demand in China.
Technology Leadership
Nexteer is emerging as a major Steer-by-Wire (SbW) player, evidenced by new SbW wins with leading new energy vehicle manufacturers.
Negative Factors
Global Sales
Weaker global auto sales and potentially higher US tariffs may slow growth at Nexteer’s US operations.
Outlook
The FY25F new bookings guidance of USD5bn is down 17% year-over-year, indicating a muted outlook.

Nexteer Automotive Group (1316) vs. iShares MSCI Hong Kong ETF (EWH)

Nexteer Automotive Group Business Overview & Revenue Model

Company DescriptionNexteer Automotive Group Limited, an investment holding company, designs, develops, manufactures, and distributes steering and driveline systems and components for automobile manufacturers and other automotive-related companies. It offers electric power steering (EPS) products, such as column, pinion, and rack assist, as well as dual pinion EPS; EPS remanufacturing products, intermediate shafts, and modular power packs; and hydraulic power steering products, such as magnetic torque overlay, smart flow pumps, power steering pumps and reservoirs, rack and pinion steering gears, and recirculating ball steering gears, as well as aftermarket products. The company also provides steering columns, including power tilts and telescopes, power rakes and telescopes, one-touch adjustable columns, manual rakes and telescopes, non-adjustable columns, intermediate shafts, transmission shifters, and stowable steering column, as well as electronics, modules, and sub-assemblies. In addition, it offers driveline products comprising front and rear wheel half shafts, intermediate drive shafts, and propeller shaft constant velocity joints. Further, the company provides advanced driver assistance systems and automated driving technologies, which include steer by wire, steering on demand system, quiet wheel steering, magnetic torque overlay, and high availability EPS for resilient operational availability, as well as offers customer support and engineering center services. It operates in North America, the Asia Pacific, Europe, the Middle East, Africa, and South America. The company was founded in 1906 and is headquartered in Auburn Hills, Michigan. Nexteer Automotive Group Limited is a subsidiary of Nexteer Automotive (Hong Kong) Holdings Limited.
How the Company Makes MoneyNexteer Automotive Group generates revenue primarily through the design, manufacture, and sale of steering and driveline products to automotive OEMs. The company has established long-term contracts and partnerships with major automotive manufacturers, which serve as key revenue streams. Nexteer's revenue model is heavily reliant on its ability to innovate and provide technologically advanced solutions that meet the safety, performance, and efficiency demands of its clients. Additionally, Nexteer's global manufacturing footprint allows it to serve a diverse customer base while optimizing operational costs, contributing to its overall profitability.

Nexteer Automotive Group Earnings Call Summary

Earnings Call Date:May 15, 2025
(Q1-2025)
|
% Change Since: -3.35%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong business performance with record program launches and strategic expansions in Motion-by-Wire technology. Despite facing challenges from a dynamic tariff environment and potential market volatility in North America, Nexteer demonstrates effective mitigation strategies and is positioned for above-market growth.
Q1-2025 Updates
Positive Updates
Record New Program Launches
In Q1 2025, Nexteer achieved a record of 23 new program launches, including 14 for battery electric vehicle platforms and 19 as new or conquest business. This includes significant launches across all regions: 3 in North America, 5 in EMEASA, and 15 in APAC.
Strong New Business Wins
Nexteer secured $0.8 billion in bookings in Q1 and is forecasting $5 billion for the full calendar year. Notable wins include high-end products like rear-wheel steering, rack EPS, and dual opinion EPS, as well as re-securing an important column business with a North American customer.
Expansion of Motion-by-Wire Portfolio
Nexteer expanded its Motion-by-Wire chassis portfolio with innovations in Steer-by-Wire, rear-wheel steering, Brake-by-Wire, and software, demonstrating strong alignment with industry trends and demand in China.
Above-Market Revenue Growth
Nexteer is on track to deliver above-market revenue growth of 200 to 300 basis points year-over-year, driven significantly by growth with China OEMs.
Tariff Mitigation Strategies
Nexteer has effectively mitigated tariff exposure through a regional supply chain strategy and is actively negotiating with customers and suppliers to manage costs.
Negative Updates
Tariff Environment Challenges
Nexteer faces a dynamic tariff environment impacting non-USMCA compliant shipments and reciprocal tariffs between the US and China, necessitating ongoing mitigation efforts.
Potential North America Market Volatility
There is uncertainty related to North American production volumes due to the tariff situation, with potential volatility expected in the latter half of the year.
Company Guidance
During Nexteer Automotive's 2025 first quarter investor communication call, the company reported a record of 23 new program launches, including 14 for battery electric vehicle platforms and 19 for new or conquest business, with significant activity in APAC, EMEASA, and North America. Notably, Nexteer secured $0.8 billion in Q1 bookings, forecasting $5 billion for the full year, with 36% of new business coming from electric power steering and 45% from columns, primarily driven by gains in North America. The company is expanding its Motion-by-Wire chassis portfolio and leveraging its technology leadership to capture more by-wire related bookings, especially in China. Revenue growth is expected to outpace the market by 200 to 300 basis points, driven by initiatives to reduce fixed costs, optimize footprint, and improve supply chain efficiency, despite the ongoing dynamic tariff environment.

Nexteer Automotive Group Financial Statement Overview

Summary
Nexteer Automotive Group shows positive financial health with steady revenue growth and improved profitability. The balance sheet is strong with low leverage and substantial equity. Cash flow performance is robust, underscoring effective cash management. However, there is potential for enhancing operational margins to further strengthen financial performance.
Income Statement
75
Positive
The company has shown consistent revenue growth with a 1.65% increase in 2024 from 2023. Gross profit margins have improved to 11.26%, reflecting better cost management. Net profit margin rose to 1.44%, indicating a slight improvement in profitability. However, EBIT and EBITDA margins are relatively low at 2.68% and 7.06%, respectively, suggesting room for operational efficiency improvements.
Balance Sheet
80
Positive
The debt-to-equity ratio is low at 0.05, indicating minimal leverage and a strong equity base. Return on equity stands at 3.12%, showing moderate profitability. The equity ratio is 56.87%, signifying a solid financial structure with more than half of the assets financed by equity.
Cash Flow
78
Positive
There is a robust free cash flow growth of 79.37% from 2023 to 2024. The operating cash flow to net income ratio is strong at 7.23, indicating efficient cash conversion. The free cash flow to net income ratio is 2.67, reflecting healthy cash flow generation relative to net income.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.28B4.21B3.84B3.36B3.03B
Gross Profit481.42M368.59M367.15M363.43M407.94M
EBITDA302.05M357.48M362.74M370.10M348.89M
Net Income61.72M36.74M58.01M118.44M116.77M
Balance Sheet
Total Assets3.48B3.40B3.34B3.21B3.31B
Cash, Cash Equivalents and Short-Term Investments422.28M311.74M245.93M326.52M553.42M
Total Debt91.59M100.39M110.71M146.76M305.99M
Total Liabilities1.45B1.39B1.36B1.20B1.38B
Stockholders Equity1.98B1.96B1.93B1.95B1.88B
Cash Flow
Free Cash Flow164.89M91.91M173.41M145.78M270.10M
Operating Cash Flow446.23M404.12M293.76M287.38M419.85M
Investing Cash Flow-279.79M-299.15M-263.47M-285.66M-288.00M
Financing Cash Flow-43.16M-38.40M-85.18M-215.45M-186.94M

Nexteer Automotive Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price5.56
Price Trends
50DMA
5.48
Positive
100DMA
5.22
Positive
200DMA
4.13
Positive
Market Momentum
MACD
0.02
Negative
RSI
52.02
Neutral
STOCH
57.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1316, the sentiment is Positive. The current price of 5.56 is above the 20-day moving average (MA) of 5.46, above the 50-day MA of 5.48, and above the 200-day MA of 4.13, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 52.02 is Neutral, neither overbought nor oversold. The STOCH value of 57.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1316.

Nexteer Automotive Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$14.13B29.343.13%1.23%1.31%67.13%
56
Neutral
$3.37B4.05-1.30%6.64%0.16%-63.79%
$2.58B9.4710.07%1.62%
$3.35B7.4111.97%0.37%
€1.03B21.389.28%1.19%
63
Neutral
HK$3.25B154.961.95%0.49%30.75%63.75%
63
Neutral
HK$1.59B7.028.65%4.32%13.37%-35.53%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:1316
Nexteer Automotive Group
5.56
2.43
77.75%
JELCF
Johnson Electric Holdings
2.70
1.31
94.24%
MNTHF
Minth Group
2.08
0.62
42.47%
DE:W4K1
Zhejiang Shibao Co. Ltd. Class H
0.58
0.35
152.17%
HK:1760
Intron Technology Holdings Ltd.
1.45
0.03
2.11%
HK:2025
Ruifeng Power Group Co., Ltd.
4.17
2.43
139.66%

Nexteer Automotive Group Corporate Events

Nexteer Automotive Announces AGM Results and Director Changes
Jun 18, 2025

Nexteer Automotive Group Limited announced the results of its Annual General Meeting held on June 18, 2025, where all proposed resolutions were approved by shareholders. Key outcomes included the adoption of the company’s financial statements, the declaration of a final dividend, the re-election of directors, and the re-appointment of Deloitte Touche Tohmatsu as auditors. These decisions are expected to reinforce the company’s governance and operational stability, potentially impacting its market position and stakeholder confidence positively.

The most recent analyst rating on (HK:1316) stock is a Sell with a HK$2.00 price target. To see the full list of analyst forecasts on Nexteer Automotive Group stock, see the HK:1316 Stock Forecast page.

Nexteer Automotive Declares Final Dividend for 2024
Jun 18, 2025

Nexteer Automotive Group Limited has announced a final cash dividend of USD 0.0087 per share for the financial year ending December 31, 2024. The dividend, payable in Hong Kong dollars at HKD 0.068 per share, will be distributed on July 9, 2025, following shareholder approval on June 18, 2025. This announcement reflects Nexteer’s commitment to returning value to its shareholders and may influence investor perceptions and market positioning.

The most recent analyst rating on (HK:1316) stock is a Sell with a HK$2.00 price target. To see the full list of analyst forecasts on Nexteer Automotive Group stock, see the HK:1316 Stock Forecast page.

Nexteer Automotive Updates Board Composition
Jun 18, 2025

Nexteer Automotive Group has announced the composition of its board of directors, detailing the roles and functions of each member. This update reflects the company’s commitment to maintaining a structured governance framework, which is crucial for its strategic direction and operational efficiency.

The most recent analyst rating on (HK:1316) stock is a Sell with a HK$2.00 price target. To see the full list of analyst forecasts on Nexteer Automotive Group stock, see the HK:1316 Stock Forecast page.

Nexteer Automotive Announces 2025 Annual General Meeting and Key Resolutions
May 26, 2025

Nexteer Automotive Group Limited has announced its Annual General Meeting scheduled for June 18, 2025, in Hong Kong. Key resolutions include the adoption of the 2024 financial statements, declaration of a final dividend, re-election of directors, and re-appointment of Deloitte Touche Tohmatsu as auditors. The meeting will also consider authorizing the board to allot and issue additional shares, reflecting the company’s strategic focus on growth and shareholder value.

The most recent analyst rating on (HK:1316) stock is a Sell with a HK$2.00 price target. To see the full list of analyst forecasts on Nexteer Automotive Group stock, see the HK:1316 Stock Forecast page.

Nexteer Automotive Unveils Value Creation Plan and 2025 Grant
Apr 15, 2025

Nexteer Automotive Group Limited has announced the adoption of a Value Creation Plan (VCP) and the approval of the 2025 Grant, which includes the issuance of Performance and Restricted Units to senior management. This initiative aims to incentivize management through cash payments based on performance metrics and continuous service, without diluting existing shareholder value. The plan is expected to enhance the company’s operational efficiency and strategic positioning in the automotive industry.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 07, 2025