First coverage
Investment highlight
For the first time covering Su'ao Sensor (300507), the industry was rated to outperform, with a target price of 16.91 yuan and a corresponding valuation multiple of 41.6 x 2022. The reasons are as follows:
The leading enterprises of oil level sensors are developing new types of high-end sensors in line with the trend of electric intelligence.
We estimate that the company's oil level sensor products account for more than 30% of the market in 2020, and it is one of the largest manufacturers of automobile liquid level sensors in China. We believe that the trend of electric intelligence requires an improvement in the number and performance of automotive sensors, and the company is expected to enjoy industry dividends and expand its share by expanding categories and taking the lead in entering the market.
The core component of the electric drive system rotates the sensor volume, and the company acquires Changzhou Huaxuan to achieve domestic substitution. With the improvement of the permeability of new energy vehicles and the upgrading of single motor to dual / three motor mode, the amount of rotation sensors is expected to be increased. We estimate that the global market size of rotation sensors for new energy passenger vehicles in 2025 is close to 1.403 billion yuan. At present, the global rotary sensor market is dominated by Japanese manufacturers Tomocheon and Mebea. Changzhou Huaxuan, a subsidiary of Suo Sensor, is one of the few domestic suppliers with large batch production capacity of rotary sensors, and has been designated by XPeng Inc. and Bosch in Europe. We believe that it is expected to rely on automatic production line construction and timely and flexible service advantages to achieve domestic substitution.
Through equity investment to obtain independent design and closed testing capabilities of MEMS sensor chips, and build industrial barriers. MEMS sensor is the mainstream of automobile sensor development, the number of bicycles is more than 50, the market is monopolized by international manufacturers, and there is still a gap in the core chip capability of domestic manufacturers. In 2020, the company invested in Longwei Technology (9.57%), mastered the independent design and closed testing capability of MEMS chips, and built industrial barriers. We believe that the company is expected to endow partners with efficient management capabilities and rich downstream customer resources to expand market share.
What is the biggest difference between us and the market? The market is concerned about whether the company's new high-end sensor products can be released as scheduled, we believe that the company's rotary sensor has the advantages of technology and production capacity, has been fixed, and is expected to continue to open up the domestic and European markets in the future; MEMS sensors have chip autonomy and can be expected in the future.
Potential catalyst: we believe that the company's rotary sensor products will play an exemplary role for new energy vehicle companies after obtaining the fixed points of XPeng Inc. and Bosch in Europe, and will get new orders one after another in the future.
Profit forecast and valuation
We estimate that the company's EPS for 21-23 years is 0.25, 0.41, 0.54, respectively, and the CAGR is 46.9.
For the first time, we have covered the rating of outperforming industries. In terms of fuel system and interior parts business, it will be given 28 times Phammer E in 2022. Considering the technology upgrading of the company's sensor business and the customer expansion of new energy vehicle companies, it is expected to increase volume quickly, so it will be given 70 times Phammer E in 2022, corresponding to PEG 0.98. To sum up, we give the target price 16.91 yuan, which is 24% higher than the current stock price.
Risk
M & An integration is not as expected, sensor new business expansion is not as expected, business is focused on major customers, the risk of rising raw material prices.