From 2017 to 2021, the high growth of the electric bike industry + the company opened up new customers, and the revenue from light power increased from 240 million yuan in 2017 to 1.23 billion yuan in 2021, with an average annual compound growth rate of 51%. The company selects the "gap" track with strong consumer attributes and small and scattered downstream customers, and the customized design remains highly profitable.
Although the energy storage business has a low base, it is expected to become the most growing sector of the company. 2022H1 energy storage business revenue reached 120 million yuan, an increase of 136% over the same period last year, accounting for 10% of revenue. We estimate that in 2022 and 2023, the company's energy storage business revenue will reach 400 million to 900 million yuan, accounting for 13% and 21% of the revenue.
Light power: focus on customized, personalized market, from electric bikes to electric motorcycles and other light power batteries account for more than 50% of the company's revenue, mainly downstream for European electric bikes. Sales of electric bikes in Europe rose from 1.364 million in 2015 to about 5.08 million in 2021, with an average compound annual growth rate of 25 per cent.
Boliwei light power battery revenue increased from 240 million yuan in 2017 to 1.23 billion yuan in 2021, with an average annual compound growth rate of 51%, far exceeding the growth rate of the European electric bicycle industry and increasing market share.
The main competitor of Pack is Bosch, which accounts for about 20% of Bosch Europe trolley and 50% of Bosch. The concentration of pack in the middle reaches is relatively high, so we think it has certain bargaining power. Bosch products are relatively standardized, Bo Liwei focuses on customized and personalized market, constantly optimizes battery design and opens up new customers.
Lithium battery has strong malleability, and the product extends to more customized application fields. The company lithium electricity customization application scene continues to extend, in addition to the two-wheeler, the small battery customization scene extends to other areas: wireless vacuum cleaners, drones, detectors and so on, the market space continues to open.
Energy storage: from portable to household storage, industry high growth + new customer development to achieve rapid growth portable energy storage low permeability + strong consumption capacity of potential users, industry demand to maintain a rapid growth. In outdoor activities, the penetration rate of portable energy storage products in 2021 is only 2.3%. And American campers account for 32% of their annual income of more than $100,000, with strong purchasing power.
Compared with household storage, portable energy storage is a small capacity product and expandable capacity, the price belt is more diverse and easy to install, suitable for different consumers. Portable energy storage large-capacity combination products are close to household storage, portable energy storage enterprises enter the field of household storage and open up market space. On the customer side, Boliwei has expanded from Goalzero to other customers; in terms of products, it has extended from portable energy storage to household energy storage.
The company's advantages: the track is malleable, the technology platform upgrade improves the profit margin, chooses the subdivision track with strong consumption attribute, the consumer price sensitivity is relatively low, and competes with power, big reserve and other Pack enterprises. Since 2021, the company's gross profit margin has declined significantly, and the company has promoted the technology upgrade of the battery platform to absorb the cost pressure. The company's gross profit margin and net profit margin increased significantly in Q2, with a gross profit margin of 18%, a month-on-month increase of 1.7pct, a net profit rate of 7.8% and a month-on-month increase of 3pct.
Profit forecast and valuation
We estimate that the company's operating income from 2022 to 2024 will be 28,42,6 billion yuan respectively, an increase of 26%, 50% and 43% respectively over the same period last year; and the net profit of returning home will be 1.9,300 million yuan and 400 million yuan, up 51%, 58% and 33% respectively.
We estimate that in 22 and 23, the revenue of the company will reach 400 million yuan to 900 million yuan, accounting for 14% and 21% of the revenue.
Compared with similar battery PACK enterprises or battery companies, the PE of Huabao Xinneng, Penghui Energy, Xinwanda and Yiwei LiNeng in 2023 is 33, 35, 18 and 28X respectively. Considering Bliwei's 2022-2024 return net profit of 1.9, 300 and 400 million yuan, with an average annual compound growth rate of 45%, as well as the valuation level of similar companies, it is given 2023 PE 30X, corresponding to a share price of 90 yuan, covering for the first time, and a "buy" rating.
Risk tips: the demand for electric bikes is lower than expected, the competition in the industry intensifies, the prices of raw materials rise sharply, the prosperity of consumer electronics declines, the development of new customers is less than expected, and the market capitalization is small.