Core viewpoints
Deep ploughing precision manufacturing automotive connector quality enterprises. Laimu was founded in 2003, and historically, the company's business focus has shifted from cars to mobile phones to cars. In recent years, with profound technology accumulation, the company continues to enrich product categories, open up important customers in the field of automotive electronics, increasing market share and rapid growth in revenue.
Automotive electronic connectors benefit from automotive intelligence and electrification, and there is a strong demand. There are three main lines in the development of automotive electronics: electrification, intelligence and integration (domain control). As a "vascular" and "neural" interface connecting various circuits, modules and parts of automotive electronics, automotive electronic connectors benefit from the improvement of electrification and intelligence of automotive electronics, and the market scale is growing rapidly. According to our estimation, the market size of automobile connectors in China is about 40.357 billion yuan in 2021, and it is expected to grow to 62.118 billion yuan in 2025 and CAGR=11.38% in 2021-2025.
With the deep accumulation of technology and customers, the revenue from increasing fund-raising and production capacity is constantly increasing. Laimu has laid out the field of automotive connectors since its inception. At present, the company's automotive connector customers include Valeo, Kirshida, Visteon, BYD, Haman, mainland, Tianhe, Magna, Ningde era and other domestic and foreign well-known Tier1/ vehicle factories, profound technology accumulation and high-quality customer structure are expected to help the company continue to improve its market share. In 2022, the company raised 700 million yuan in private shares, of which 400 million yuan was invested in the new energy vehicle connector project, which will increase the annual production capacity of 5 million new energy vehicle high current and voltage connectors and 12 million (sets) auxiliary driving module connectors, which is expected to reach full production by 2026, further driving the company's revenue growth.
Profit forecast and investment rating: it is estimated that the company's sales income will be 10.03 ~ 15.98 billion yuan, and the net profit will be 0.76 ~ 179 million, corresponding to the closing price of PE on August 18, 2022, which is 74.34 ~ 31.82 ~ 21.09. The company's leading position and forward-looking layout in automotive connectors are expected to lead to continued growth in revenue and profits, giving a "overweight" rating for the first time.
Risk tips: capacity release is less than expected; industry competition aggravates risks; macroeconomic downside risks.