Focus on the main industry of steel wheel manufacturing, and the market demand remains at a high level. Automobile steel rolling wheel is the core product of the company, which has been widely recognized by domestic joint venture brand automobile manufacturers and European and American customers. In China, the company is the supplier of SAIC Volkswagen, SAIC General Motors, Changan Ford, Guangzhou Automobile Honda, BYD, Geely Automobile, Sinotruk, Yutong bus and other passenger and commercial vehicle manufacturers. In the international market, the company has successfully entered the international auto parts procurement system and is a global supplier in the systems of American General Motors, German Volkswagen and German Daimler. In 2020, the cumulative sales of commercial vehicles in China reached 5.133 million, an increase of 18.7% over the same period last year. It is estimated that the total demand for new commercial vehicle wheels (excluding the aftermarket) for the whole year is about 47 million. If you add in the after-sales market of commercial vehicles, the total annual demand for wheels of commercial vehicles is very huge, and the profit prospect is good.
The company independently develops "Avatar tires" to open up the blue ocean market between steel wheels and aluminum wheels. Since 2012, the company has been committed to the research and development of innovative steel wheels with weight and precision matching aluminum wheels, with the internal project code "AVATAR" (that is, "Avatar"). The main advantages of Avatar wheels include high strength, high precision, light weight, good balance, strong resistance to deformation and so on. It is the world's leading steel wheel production technology, opening up a new "blue ocean" market between steel wheels and aluminum wheels. The company has 28 exclusive patents for Avatar wheels, 8 invention patents, and jointly developed more than 50 shared patents with partners. In terms of raw materials, in 2018, the company signed an agreement with ThyssenKrupp and Angang to establish a joint venture Golden Saddle (Hangzhou) Technology Co., Ltd., to exclusively supply raw materials for Avatar wheels for the company; in terms of equipment, in 2016, the company acquired Fangtaina, a Dutch equipment manufacturer, and mastered the world's most advanced Avatar wheel production equipment.
The company's Avatar Wheel has been officially put into production and will continue to expand its production line in the future. At the end of 2020, the company Avatar wheel has been officially put into production. At present, the company's Avatar wheels have begun to supply a number of commercial vehicle mainframe factories in China, and have been sent to Daimler and other international commercial vehicle mainframe factories in the United States for road test. The company initially plans to layout 3-4 Avatar wheel production bases and multiple Avatar wheel production lines by 2025. Recently, the company has planned to build an Avatar wheel production base in Hefei and Nanning. In the future, the company will lay out the Avatar wheel production line in the country and even around the world to meet the market demand.
Investment suggestion: we forecast that the company's operating income from 2021 to 2023 will be 28.24cm 34.98 / 5.31 billion yuan respectively, and the net profit returned to the parent will be 0.83 shock 2.94 / 711 million yuan respectively, corresponding to 0.08 EPS 0.29 / 0.71 yuan, corresponding to PE 100.01max 28.11pm 11.63X, which will be given a "buy" rating for the first time.
Risk tips: Avatar wheel expansion is not as expected, raw material prices fluctuate, competition intensifies