Investment highlight
For the first time to cover Actronic (301099) to outperform the industry rating, the target price of 101.32 yuan. The company is a well-known distributor of automotive electronic components in China, and the auto front self-research chip is making rapid progress for the following reasons:
Domestic well-known electronic components distributor, epitaxial acquisition to expand self-research IC business: the company was founded in 1999, started with electronic components distribution, downstream focus on the automotive market; in 2019, the company's merger and acquisition of Tamul cut into the field of self-research IC, layout power management chips, 1H22 self-research IC revenue of 82.54 million yuan, a year-on-year increase of 211%. In 2022, the company acquired Yi Hai Nengda and Ouchuangxin to strengthen the market competitiveness of distribution and self-research IC respectively.
Broad distribution space, the company vigorously expand upstream and downstream resources: electronic components distribution is a key link between upstream and downstream, giving full play to the key role of supply chain services and technical services. According to international e-business information, the total revenue of Chinese TOP25 distributors in 2021 is about 250 billion yuan. We estimate that automotive electronics account for about 9% of the demand for electronic components, and electrification and intelligence are expected to further increase the proportion. The company mainly distributes automotive electronics, and has accumulated supplier resources such as Toshiba, Seoul, Murata, Panasonic, LG, customer resources such as Geely, Great Wall, BYD and XPeng Inc., and continues to expand.
Power management IC 100 billion market, the company leads the world in the vehicle preloading niche market: according to the annual global power management chip market size of US $19.1 billion in WSTS,2021, the company entered the market through the acquisition of a Korean team in 2019, including motor and LED drivers, LDO and DCDC, etc., downstream mainly car front equipment, currently mass-produced 18 products (company announcement) And applied to Hyundai, Chrysler, Volkswagen, Guangzhou Automobile Group and other vehicle factories related models. The company plans to continue to increase R & D investment to expand product number and accelerate customer introduction.
What is the biggest difference between us and the market? 1) the market questions the growth and profit margin of the distribution industry. We believe that the company's distribution business focuses on automotive electronics and is expected to benefit from the increase in market demand brought about by electrification and intelligence in the future. at the same time, taking the initiative to adjust the product structure can stabilize profits. 2) the market believes that the company has few self-developed IC product models, we believe that the Korean team acquired by the company has mature experience in IC design and certification, and the acquired local team Ouchuangxin has experience in the automotive afterloading market and is expected to give full play to the synergy and integration effect in the future. in addition, the company continues to increase R & D investment to expand product number and customer resources.
Potential catalyst: self-developed IC market share continues to increase; orders affected by the epidemic will be delivered in the second half of the year.
Profit forecast and valuation
We expect the company's EPS to be 2.36,3.69 yuan and CAGR to be 78.7% in 2022-2023.
The company's current share price corresponds to 23 times the 23-year Pax E 36 Universe. We use the SOTP valuation method to give the distribution / self-developed IC business 40 times of 15xpanye in 2023, corresponding to a market capitalization of 22 / 5.9 billion yuan in 2023, a total of 8.1 billion yuan, and a corresponding target price of 101.32 yuan, which has 18% upside compared with the current market value.
Risk
Automobile consumption demand is not as expected; self-developed IC new product introduction and new customer development are not as expected; goodwill impairment risk; supplier fluctuation risk.