Minglida: Continuously expanding its “circle of capabilities” and becoming a professional “one-stop” precision structural parts provider company specializing in precision structural parts (since its establishment in 2004, it has expanded processes such as die casting, injection molding, and profile stamping). In recent years, revenue has increased from 740 million in 17 to 1.84 billion in 21, and net profit has increased from 0.3 billion to 150 million (CAGR = 42%). The company's products are widely used in downstream applications. The four major fields of photovoltaics, security, consumer electronics and automobiles accounted for 51%, 23%, 14%, and 10% of revenue respectively in '21.
Fully bind leading downstream customers, new business expansion+old business volume drive the company's short-term performance increase
PV sector: 1) Looking at the industry, the market size of inverter structural components is estimated to be 142,41.4 billion yuan respectively in 21 and 25 (assuming 170 and 550 GW of installed capacity, 0.4 yuan/W of inverter, structural parts cost 25%). The company's PV revenue in '21 was only 900 million yuan, with a market share of about 7%; 2) Looking at the company, customers include SolarEdge (70% + of revenue in recent years), Enphase, etc., which is currently expanding new energy storage businesses (cooperating with SolarEdge, Sunshine Power, etc.). As cooperation with new customers is deepened (first flight, wheat field, etc.), future growth rates can be expected.
Automobile sector: 1) Looking at the automotive sector, China's NEV battery tray market space is estimated to be 1,153.3 billion yuan respectively in 21/25 (assuming sales volume of 288 and 13.33 million units, bicycle prices about 40,000 yuan), and the company's automobile business revenue in '21 was 200 million yuan, with a market share of less than 2%; 2) Looking at the company, core customers include BYD (accounting for about 40% of revenue in recent years), BAIC, etc., and will continue to deepen business cooperation with customers such as Ningde and Guangzhou Automobile in the future to increase other three-power system structural components products.
Consumer electronics sector: 1) Looking at the industry, the market size of e-cigarette structural parts is estimated to be 1,389.9 billion yuan in 21 and 25, respectively, and the company's revenue in '21 was 160 million yuan, with a market share of 1%. 2) According to the company, in addition to PMI (accounting for about 80% of revenue in recent years), it is also expanding other tobacco and consumer electronics leaders.
Security sector: The growth rate of the industry is low, growing along with the customer Hikvision (accounting for about 80% of revenue in recent years).
Efficient operation accelerates the continuous expansion of turnability+ listing financing, reducing fees and increasing efficiency to help the company grow steadily over the long term
In addition to entering high-quality customers in the early stages of the development of emerging industries, rapidly responding to customer needs to carry out product development, and establishing and increasing customer stickiness, we believe that the company's strong support for maintaining high growth comes from: 1) accelerating turnover by improving operational efficiency, 2) adopting continuous optimization strategies for large customers and small to medium cities to build factories and personnel, continue to dilute expenses after expanding the scale of revenue (significantly lower than the industry average from 2019), and establish profit advantages to form competitive barriers (not afraid of price wars with new players); 3) listing financing further accelerates the pace of expansion, and the forward-looking layout in various fields can grow steadily.
Profit forecasting and valuation
The company's net profit for 22-24 is estimated to be 32/59/86 million yuan respectively, giving 45 times PE in 23 (corresponding to a market value of 26.7 billion yuan), with a target price of 67 yuan, covering the first “buy” rating.
Risk warning: Demand in the photovoltaic sector fell short of expectations, the growth rate of the new energy and consumer electronics sector fell short of expectations, the risk of rising raw material prices, the risk of exchange rate fluctuations, the risk of short-term stock price fluctuations, and production operation risks; market space estimates are somewhat subjective and are for reference only.