FIYTA’s acquisition of Changkong Gear: From precision manufacturing to robotics and liquid cooling
Changkong Gear brings the ability to develop and mass-produce reducers, while the liquid-cooling production line has entered the equipment procurement stage. Shenwan Hongyuan expects FIYTA’s profit to rebound sharply in 2026, but robot demand and the construction of new production capacity remain key conditions.
Shenwan Hongyuan is optimistic about FIYTA’s use of the acquisition to expand into robot reducers and cooling for computing infrastructure, but growth in the new fields depends on industry demand and progress in building production capacity.
What has the acquisition of Changkong Gear changed?
FIYTA’s existing precision technology business draws on ultra-precision manufacturing processes developed through watch movements and aerospace timing equipment, mainly providing small, high-precision parts and solutions. The acquisition of Changkong Gear gives the company a foundation for expanding into precision transmission components.
Changkong Gear has specialized in precision transmission for the defense industry for more than 50 years and can develop and mass-produce harmonic, planetary and other reducers. In 2025, it recorded revenue of 390 million yuan and net profit of 40 million yuan, with a net margin of approximately 10%.
Where do the opportunities and constraints lie in robotics?
Shenwan Hongyuan believes Changkong Gear’s capabilities in materials, heat treatment and precision machining match humanoid robot joints’ requirements for precision, durability and light weight, potentially helping FIYTA enter the precision reducer market.
The report says precision reducers account for 30%–35% of a humanoid robot’s material costs. They represent substantial value, but also have long validation cycles. If humanoid robot commercialization and demand for reducers fall short of expectations, this business opportunity will be affected.
How far has the cooling business for computing infrastructure progressed?
The company is building a talent pool in AI hardware fields such as liquid cooling and advancing equipment procurement. Equipment installation and capacity construction are the next steps.
The equipment list shows that winning bids have been announced for some welding and precision machining equipment; other machining, cleaning and testing equipment remains at the tendering stage.
How does the institution assess profit and valuation?
Shenwan Hongyuan forecasts that FIYTA’s net profit attributable to shareholders will be 195 million, 230 million and 277 million yuan, respectively, in 2026–2028, up approximately 124%, 18% and 20% year on year, corresponding to price-to-earnings ratios of 36, 31 and 26 times. Attributable net profit in 2025 was 87 million yuan, down 60.4% year on year.
The expected rebound in profit does not imply equally rapid revenue growth: the brokerage forecasts revenue of 3.519 billion yuan in 2026, up just 0.3% year on year. It expects the overall gross margin to fall from 35.5% in 2025 to 34.7% in 2026, and to 33.9% in 2028.
