The company is a high-quality supplier of intelligent controller with remarkable performance growth.
The company has been deeply engaged in the intelligent control industry for 20 years, and its main business includes intelligent controllers (intelligent home and home appliance controllers, automotive electronic controllers, consumer electronic controllers) and intelligent products (offline lighting, new consumer electronics). The company's revenue in 21 years is 960 million yuan, CAGR 23.52% in recent 5 years, net profit 141 million yuan, and CAGR 37.08% in recent 5 years, which is higher than revenue growth.
Driver 1: benefiting from the upstream of new energy vehicle scene, the cooperation mode provides controller contract manufacturing services to ODM upgrade company for BYD, accounting for about 50% of the automotive electronics business, and the controller is used in ocean series, dynasty series, electric buses and other vehicles. In the short term, the high demeanor of electric vehicles continues, BYD delivered more new models in 22 years, sales are expected to double year-on-year growth, superimposed outsourcing share will increase, the company as a supplier will benefit greatly. In the long run, based on the existing advantages, the company is expected to cut into ODM cooperation in the future to greatly increase the value of bicycles.
Driver 2: off-grid energy storage explosive growth, products to high-power and high-value iterative off-grid solar energy industry size of 1.881 billion US dollars, in recent years pay-as-you-go mode to activate users' potential consumption power, the market ushered in a simultaneous rise in volume and price. When the EU solar energy strategy is carried out, it will bring new solar photovoltaic installed capacity of about 163GW in 22-25 years. The company's downstream customer Sun King is the leader in the offline lighting industry, with a market share of 25%. The growth of the company's offline lighting business is mainly driven by two sides: 1) downstream customer volume: Sun King received US $260 million in financing, blank channel expansion strengthened, cut into the Nigerian market, while Sun King as the global PAYG business leader supplier, will fully enjoy the market volume dividend. 2) the company's own product structure upgrade: off-grid lighting products from less than 40W power to more than 100W power, greatly enhance the product value.
Investment advice and profit Forecast
We estimate that the total operating income of the company in 2022-2024 is 13.51,18.02 and 2.29 billion yuan respectively, an increase of 40.77%, 33.35% and 27.05% respectively over the same period last year. The net profit of homing in 2022-2024 is 1.97,2.80 and 403 million yuan respectively, an increase of 39.57%, 42.15% and 44.17% respectively over the same period last year, and the corresponding PE for 22-24 years is 27.76X, 19.53X and 13.55X respectively. Longte's smart car electronics business is in a leading position in terms of revenue growth and business volume, so we give it a valuation that is higher than the average of comparable companies. Taking into account the company's deep cultivation of intelligent controllers and intelligent products for many years, automotive electronic controllers, off-grid lighting business is expected to usher in a significant volume, given a "buy" rating.
Risk hint
The competition in the intelligent controller industry aggravates the risk; the prosperity of the smart home and home appliance industry is lower than expected risk; and the business growth rate of automotive electronic intelligent controller and off-grid energy storage products is lower than expected risk.
