1Q22 forecasts profit growth of 10% and 30% year-on-year.
On April 13, 2022, the company issued a 1Q22 performance forecast, with an estimated return net profit of 2280 to 26.95 million yuan, an increase of 10 percent over the same period last year; deducting non-return net profit of 1199 to 16.13 million yuan, a year-on-year growth range from negative 8.6 percent to 23.1 percent. Slightly exceeded market expectations.
Pay attention to the main points
The performance increases against the trend under the multiple disturbance factors of 1Q22. According to the data of the Federation of passengers, the domestic passenger cars produced / wholesale / retail 181100,800,000 in March, respectively, compared with the same period last year. The total wholesale sales of new energy passenger cars were 1.19 million, which was + 145.4% compared with the same period last year. The penetration rate reached 22%. We believe that 1Q22 raw material prices remain high, logistics is delayed under the control of epidemic situations in Shanghai, Jilin and Jiangsu, some automobile companies reduce labor and production, and the company overcomes multiple unfavorable factors in the industry to achieve a forecast year-on-year increase in net profit, outperforming the overall auto zero sector, reflecting the company's strong product competitiveness and profitability.
With the rapid expansion of new energy components, the vehicle networking business set sail. In terms of new energy, the company mainly distributes the three-electricity system of new energy vehicles, involving motor application distribution ring, high and low voltage filter components of ECU, battery package structure components, PTC plumbing heaters, etc., integrated filter is under design and development, and the business of new energy components has achieved rapid growth. In terms of vehicle networking, the company issued an additional fund-raising project to build a commercial vehicle networking system in 21 years, and set up special business units to develop 4G/5G T-Box, millimeter wave radar, cameras and other vehicle networking products. We believe that the company's new energy components business customer resources are of high quality, abundant orders on hand, will continue to increase the overall performance; vehicle networking business has won commercial vehicle orders, is in the process of market development, and is expected to become a new performance growth point.
Under the trend of electric intelligence, the new energy sensor continues to benefit, which is expected to deduce the domestic substitution logic. With the upgrading of electrification, the three-electric system needs additional sensors, batteries and other components to improve the performance of sensors; at the same time, electrification drives intelligence, and the sensors used in intelligent chassis, brakes, thermal management and so on need to be added. We believe that the trend of electric intelligence increases the performance and quantity requirements of automotive sensors, and the industry continues to expand. The company has a wide range of automotive sensor products, including liquid level sensors, pressure sensors based on MEMS/MSG technology, electrically driven rotation sensors, exhaust temperature sensors and so on, which can be widely used in fuel, pure electric and hybrid vehicles. We believe that through the acquisition of Changzhou Huaxuan and Longwei Technology, the company can achieve synergy in the integration of parent and subsidiary resources. it is expected to deduce the domestic substitution logic by virtue of the self-sufficiency ability of the industrial chain, customer resources and service advantages.
Profit forecast and valuation
Keep the profit forecast for 22am 23 unchanged. The current share price corresponds to a price-to-earnings ratio of 29.2 times / 20.1 times for 22 times 23 years. Maintain the outperform industry rating and maintain the target price of 12.0 yuan, corresponding to 36.6 times 22-year price-to-earnings ratio and 25.2 times 23-year price-to-earnings ratio, which is 25.3% higher than the current stock price.
Risk
Car networking business is not as expected, sensor new business development is not as expected, and raw material prices continue to rise.