Event: on March 7, 2022, the 23rd meeting of the second board of directors of the company decided to appoint Mr. Zhang Ding as the general manager of the company and Mr. Liu Zhiwen and Mr. Li Jiang as the management plan of the deputy general manager of the company. The three newly hired executives all came from the Quanfeng system. The company has one general manager and two deputy general managers this time, and after the landing of the plan, the worries of some markets about management changes have been alleviated. Judging from the resumes of senior executives announced by the company, Zhang Ding, Liu Zhiwen and Li Jiang have all worked within Quanfeng Group for about 20 years. Zhang Ding and Li Jiang have rich experience in product planning and marketing, technology and quality control respectively. Liu Zhiwen has been the company's secretary and financial director since 2016. The three executives are familiar with the company and the industry, and have their own areas of expertise, and are expected to lead the company into a new journey after taking office.
The business strategy is stable, and the medium-and long-term growth logic of the two core businesses of transmission and new energy remains unchanged. The development path of the company is clear, with the transmission business as the growth bottom line and the new energy vehicle parts business as the growth line. (1) Transmission business: DCT valve plate is the company's advantage product, in addition to supporting independent car companies mainly through BergWarner, the company also got direct supply orders from BYD, Great Wall and other customers. Benefiting from the increase in independent DCT penetration, the company's transmission business will maintain high growth. (2) New energy business: the company has been ploughing the new energy field for many years and has strong technical research and development strength. At present, the company's products have covered the three electricity system, full of orders on hand. With the release of capacity, the new energy business will increase rapidly.
Accelerate the layout of integrated die-casting, open up a new space for development. Integrated die-casting scheme is a new track for the innovation of aluminum die-casting industry. The company has technical reserves in large new energy aluminum castings, and earlier purchased large tonnage die casting machines for layout. At present, large die casting machines are mainly used for "multi-in-one" components, battery components and car body components related business. According to the announcement information, the company 5000T die casting machine has been put into use and mass production, 6000T and 8000T die casting machine will also come to the factory one after another.
Profit forecast and investment rating: we are optimistic about the company's market competitiveness and high growth in new energy, transmission parts and other core business. After the new management is in place, it is conducive to the stable operation of the company, and the company will steadily promote business expansion according to its strategic plan. We estimate that the return net profit of the company from 2021 to 2023 is 1.62,2.47 and 334 million yuan respectively, and the corresponding EPS is 0.81,1.23,1.66 yuan respectively. The closing price on March 8, 2022 corresponds to the PE value of 32, 21 and 15 times in 2021-2023, respectively. Maintain the "highly recommended" rating.
Risk tips: passenger car sales are not as expected; upstream raw material prices are rising; lack of core recovery is not as expected; new capacity construction progress is not as expected.