The company recently issued a performance forecast for 2021, with a total net profit of 1.19 billion yuan to 1.32 billion yuan, an increase of 40% to 55% over the same period last year, and earnings per share of 1.46 yuan to 1.62 yuan, slightly exceeding expectations. Domestic car sales continue to pick up in 2022, and the company's performance is expected to grow steadily. The company recently released the "2022 employee Stock ownership Plan (draft)", which is expected to improve the incentive mechanism, promote steady growth in performance, and be conducive to the long-term and healthy development of the company. The company has responded positively to new energy and intelligence and other industry trends, accounting for nearly 20% of new energy orders in 2021, of which the highest value of Tesla, Inc. 's bike is expected to exceed 5000 yuan. Through acquisition and other ways to expand intelligent cockpit and other new products, the future prospect is promising. We expect the company's earnings per share from 2021 to 2023 to be 1.53,1.86 and 2.21 yuan respectively, maintaining the buy rating.
Support the main points of rating
The performance in 2021 slightly exceeded expectations and is expected to grow steadily in 2022. The company expects to achieve a net profit of 1.19 billion to 1.32 billion yuan in 2021, an increase of 40% to 55% over the same period last year. It is expected that domestic business will continue to improve, coupled with overseas loss reduction. Since 2014, the company has sustained large losses in its European business, which has been a serious drag on the company's performance. In October 2020, the company issued an announcement on the implementation of the "European Business restructuring Plan" and formulated an European restructuring plan, including the closure of the HSB plant in Germany, layoffs at the HIB plant in Germany, and the step-by-step transfer of business in the UK, which has been fully implemented in 2021 and is expected to continue to improve the company's performance. The chip shortage is expected to ease gradually in 2022, domestic car sales continue to pick up, and the company's performance is expected to grow steadily.
Release the employee stock ownership plan, which is good for the long-term and healthy development of the company. The company recently released the "2022 employee Stock ownership Plan (draft)". The 2025 assessment targets include operating income of not less than 30 billion yuan, net profit of no less than 2.1 billion yuan, and net profit margin of no less than 7.0%. The employee stock ownership plan covers 51 major middle and senior managers and business backbones, which is expected to improve the incentive mechanism, promote steady performance growth, and be conducive to the long-term and healthy development of the company.
The proportion of new energy business is increasing rapidly. In recent years, the sales of new energy vehicles at home and abroad have increased rapidly, and the company has actively developed related business. New energy accounts for nearly 20% of orders in 2021, and the main customers include Tesla, Inc., Volkswagen, NIO Inc., ideal, XPeng Inc. and so on. Tesla, Inc. 's bicycle value is expected to exceed 5000 yuan at the highest, which will continue to benefit from its high sales growth. In terms of new energy products, the company has strong competitiveness in the fields of battery injection molded parts, decorations and thermoforming, and plans to vigorously develop battery boxes and other businesses, which is expected to contribute to the rapid growth of performance.
The intelligent layout has a promising future. The company's acquisition of 75% stake in Shanghai Yirui in 2021 is expected to improve the R & D capability of new products such as intelligent cockpits. The company's original products cover many links of the intelligent cockpit, coupled with part of the external assets of the major shareholders, which can be effectively connected through Shanghai Yirui and other integrated products in the future, and the value of the bike is expected to exceed 10,000 yuan. And in line with the intelligent development trend, the future prospect is expected.
Valuation
Taking into account the impact of overseas restructuring, we adjust the profit forecast, the company is expected to earn 1.53,1.86 and 2.21 yuan per share respectively from 2021 to 2023, the valuation is at a low level, and the buy rating is maintained.
Main risks faced by rating
1) car sales fall short of expectations; 2) overseas turnaround falls short of expectations; 3) prices of raw materials rise sharply.