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共进股份(603118):主业稳健增长 汽车电子业务打造新增长极

Total Progressive shares (603118): steady growth of the main business automotive electronics business to create a new growth pole

東方財富證券 ·  Sep 5, 2022 00:00  · Researches

Recently, the company announced that the car will be "electrified, intelligent, networked and shared" in the future.

The development trend of the "new four modernizations" will seize the good opportunity of the rapid development of the automotive electronics industry, help the implementation and business upgrading of intelligent manufacturing, and cultivate new performance growth points. on the basis of integrating many years of lean manufacturing experience and high quality resources, the company plans to invest in setting up Taicang Tongwei Automotive Technology Co., Ltd. The registered capital of Tongwei Automobile is 200 million yuan, and the company subscribes 160 million yuan, accounting for 80% of the registered capital; the company's wholly-owned grandson company, Lantong Technology, subscribes 20 million yuan, accounting for 10% of the registered capital; and the wholly-owned subsidiaries of the company have invested 20 million yuan, accounting for 10% of the registered capital. The company holds a 100% stake in Tongwei Automobile directly and indirectly.

[comments]

Strategic layout of automotive electronics business to create a new growth pole. With the rapid increase of new energy vehicles, the proportion of automotive electronics continues to increase, and the delivery pressure of traditional Tier1 increases significantly, which provides strategic opportunities for new automotive electronics suppliers. The whole car factory represented by the new force of car building pays more attention to independent research and development, which brings the opportunity for new suppliers to cooperate directly with the mainframe factory. The development of automotive electronics in the direction of software and hardware decoupling is expected to bring market opportunities for new suppliers to support the hardware and underlying software of domain controllers. Relying on years of accumulation in the field of information and communication, and relying on its own lean manufacturing capabilities, R & D and innovation capabilities and supply chain advantages, the company actively develops automotive electronics business with broad prospects, with the R & D and production of electronic components in the field of intelligent cockpit and ADAS (Advanced driving Assistance system) as the main direction, with the goal of becoming a leading auto parts solution provider and manufacturer.

The automotive electronics business is progressing smoothly and there is huge room for the future. The company started its automotive electronics business in the first half of 2022. At present, the basic team has been set up, and the core staff have many years of experience in the automotive electronics industry. The trial production of the first project has been completed and mass production is being arranged in an orderly manner. At present, the company's automotive electronics business has reached cooperation with the head vehicle factory and some industry head Tier1 manufacturers, including DVR (driving recorder), DMS (driver monitoring system), central control, instrumentation, streaming media rearview mirrors and other mainstream products in the cockpit. As of the 22nd, the company has obtained more than 10 million yuan in-hand orders for automotive electronics. After the reconstruction of the Taicang plant and the installation and commissioning of the equipment are completed, the growth is expected to accelerate. We are optimistic about the rapid shift of corporate communications OEM capabilities to the field of automotive electronics. The competition pattern of the automotive electronics market is significantly better than that of the communications market, and the end customers are more dispersed, giving suppliers more room for growth. At the same time, the demand of automotive electronics manufacturing is driven by the wave of automobile intelligence, and its rapid growth is expected to be maintained for many years.

The steady growth of traditional business has laid a solid foundation for new business development. The company announced that revenue in the first half of the year reached 5.196 billion yuan, up 3.29% from the same period last year; net profit from home was 191 million yuan, down 2.36% from the same period last year; and net profit from non-return was 176 million yuan, up 36.65% from the same period last year. Among them, Q2 achieved revenue of 2.74 billion in a single quarter, an increase of 9.98% over the same period last year, and its net profit was 141 million yuan, an increase of 4.15% over the same period last year, deducting 139 million of non-return net profit, an increase of 97.11% over the same period last year. The company overcame the impact of the epidemic and continued to optimize its product structure. The revenue of high-value mobile communications business and Datong business increased significantly, the price increase at the cost side was smooth, and the average price of the company's main business products increased by 14.84% over the same period last year. The company's core business Netcom market benefits from gigabit network construction, while Datong switch market benefits from the development of digital economy. By the end of the reporting period, the company had orders in hand of more than 4.5 billion yuan, providing protection for subsequent growth.

[investment advice]

As the world's leading broadband terminal manufacturer, the company has been deeply engaged in the field of information and communications, and its main business has grown steadily. It has quickly cut into the automotive electronics business during the period of strategic opportunities for automotive intelligence, and has obtained batch orders. We are optimistic that the company will provide more efficient and low-cost precision manufacturing services for the automotive industry chain, and the market space is huge. It is estimated that the operating income of the company from 2022 to 2024 is 116.01x128.93 / 14.58 billion yuan, the net profit of return to the mother is 4.17pm 4.73 / 560 million yuan, the corresponding EPS is 0.53 pm 0.60 pm 0.71 yuan, and the corresponding PE is 16-14-12 times, maintaining the "overweight" rating.

[risk Tip]

The demand of traditional communication service is lower than expected.

The company's new automotive electronics products and new customer expansion are not as expected.

The company's new production capacity of automotive electronics is not as expected.

The translation is provided by third-party software.


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