Domestic micro-special motor leader, multi-field layout to build a complete product matrix. The company is a leader in the micro-special motor industry, covering household appliances, automobiles, medical care and other downstream key areas. At present, it has been dominated by a wide variety of motor products, supporting the comprehensive business capability of related precision structure, drive control design and manufacturing solution. The company's "multi-field application" strategy has achieved remarkable results, with an operating income of 2.919 billion yuan in 2021, an increase of 20.5% over the same period last year, including high-end industrial control products, electronic pumps for new energy vehicles and aluminum die castings. The expansion of the new business has significantly boosted the company's gross profit margin, with the 2022Q1 gross profit margin of 27.9%, an increase in 2.2pct over the whole of 2017. The new business volume has hedged the impact of the decline in profit margins in the main industry.
Based on the high prosperity of medical equipment track, deeply benefit from demand growth and domestic substitution. Through the acquisition of Dingzhi Technology, the company has cut into the field of high-end medical devices, and its main products include screw stepper motors, voice coil motors, etc., which are used in IVD, POCT, analyzers, ventilators and other medical equipment. There is still a broad room for domestic substitution for high-end medical equipment, with more than half of the IDV equipment mainly imported and the domestic production rate of ventilator equipment less than 10%. At the same time, ventilators are still scarce resources in China, and the per capita possession in the future will be on a par with that of developed countries. The company's medical device sector achieved an income of 277 million yuan in 2021, and its CAGR reached 54.2% in the past three years. In the future, the company's medical device products will be rapidly released under the high demand growth and localization.
The potential of the energy storage market is huge, and the demand for electronic water pumps is expected to break out with the liquid cooling technology. China's energy storage market is at the point of explosion, in which the installed capacity of the new type of energy storage based on electrochemical energy storage has doubled for a long time, and the installed capacity of CAGR in the past five years is as high as 109.1%. The cooling efficiency of liquid cooling is better than that of air cooling, and it is gradually becoming the mainstream scheme of energy storage cooling. The company's electronic water pump for energy storage has been cut into the supply chain of head battery factories such as Ningde era and Guoxuan Hi-Tech, and the performance of the second generation AC brushless water pump being developed is more superior, which is expected to help the company quickly increase its market share and gross profit margin.
The business of home appliances is full of resilience, and the volume of new energy automobile products can be expected. The company is the global leading brand in the field of home appliances. In 2021, the company's household appliance revenue has steadily increased by 14%. The future component + modular development strategy and the simultaneous development of new customers and new products will further contribute to performance increment. At the same time, the company has formed an automotive product system of control + micro-motor + precision castings through the income of Kestin and Blue Airlines, which is expected to accelerate the production of new energy vehicles.
Profit forecast and investment advice. We estimate that the operating income of the company from 2022 to 2024 will be RMB 44165,533 million, and the net profit of return to the mother will be RMB 312max, RMB 435,594 million, corresponding to PE of 24.3max 17.4max 12.7X. The company continues to improve the product matrix and cut into emerging areas, is expected to achieve valuation, performance improvement, coverage for the first time, given a "buy" rating.
Risk hints: macroeconomic downside risks; market competition aggravates risks; new areas and new product expansion do not meet expectations.
