Shenwan Hongyuan has issued a research report initiating coverage on CIDI (03881) with a "Buy" rating. The company is a leading domestic provider of autonomous driving solutions for confined environments. With the continued increase in the penetration rate of unmanned mining trucks, the firm forecasts CIDI's revenue for 2025-2027E to be RMB 981 million, RMB 1.897 billion, and RMB 3.498 billion, respectively, corresponding to Price-to-Sales (PS) ratios of 10.8x, 5.6x, and 3.0x. Based on a 2026 average PS ratio of 9.1x for comparable companies, and considering CIDI's business encompasses autonomous mining trucks and high-performance perception technology, a 2026 PS multiple of 9x is applied, suggesting a potential 61% upside from the current market capitalization.

Shenwan Hongyuan's key viewpoints are as follows: Unmanned driving in mining areas represents a essential scenario for autonomous driving, characterized by high industry barriers that grant advantages to first movers. (1) Driven by Penetration Rate Increases: Seven government ministries have mandated that by 2026, no less than 30% of dangerous and arduous positions in coal mines must be replaced by unmanned robots. Unmanned driving in mining areas has evolved from pilot exploration into a rigid demand for enhancing mining production efficiency and safety levels. The penetration rate of autonomous mining trucks in China is entering a period of rapid growth, expected to rise from 7% in 2024 to 24% in 2026, and is projected to reach 55% by 2030. (2) Entry Barriers: Due to extreme customer caution, China's unmanned mining area solutions are highly complex, demand high product reliability, and the industry is capital- and experience-intensive, creating significant entry barriers. A. Technology Barrier: Integrates multiple core technologies including environmental perception, high-precision positioning, V2X vehicle-infrastructure coordination, intelligent scheduling, remote operation and maintenance, and safety control. B. Customer Stickiness Barrier: High switching costs for clients. C. Product Barrier: In the harsh mining environment, and due to safety requirements, autonomous mining products must demonstrate strong reliability and high versatility across different mineral types and topographies. D. Industry Experience Barrier: Mining operations themselves are highly specialized and cyclical.

CIDI is technology-driven, operates a light-asset model, and is expanding its autonomous driving business rapidly. The company's founder, Chairman, and actual controller, Professor Li Zexiang, is an expert in robotics, automation, and artificial intelligence. Research and development personnel accounted for 54.1% of the workforce in H1 2025. By H1 2025, CIDI had delivered 304 autonomous mining trucks, with a total order backlog valued at RMB 584 million. The company achieved revenue of RMB 408 million, a year-on-year increase of 57.9%. CIDI primarily utilizes a light-asset business model, resulting in relatively high gross margins. Regarding the competitive landscape, in 2024, CIDI was the third-largest autonomous mining technology company in China by revenue, holding approximately a 12.9% market share in domestic autonomous mining truck solutions. The company's three major business segments develop synergistically: autonomous driving serves as the foundation, while high-performance perception and V2X technologies develop simultaneously as key growth drivers.

Risk warnings include potential slower-than-expected progress in the unmanned mining truck business, slower-than-anticipated policy implementation, and risks associated with technological iteration.