The performance of domestic integrated service providers of automotive display devices is expected to further increase. Huaan Xinchuang is a domestic integrated service provider of automotive display devices, which is committed to the research and development of cockpit electronic software and hardware systems such as automotive central control and liquid crystal instruments. the main business includes core device customization, general device distribution and software system customization development. At the beginning of its establishment, the company was positioned as a Tier2 supplier, a bridge between upstream screen factories and downstream system integrators, and accelerated its transformation to the front end of the industrial chain in recent years. With the rapid expansion of the company's on-hand orders and the gradual commissioning of the self-built production line, the company's performance growth is strong. We estimate that the company's revenue from 2022 to 2024 will be 946, 15.60, 2.02 billion yuan, respectively, and the net profit will be 0.76, 159, 262 million, respectively, and the EPS will be 0.95, 1.98, 3.27 yuan per share, respectively, and the corresponding share price PE will be 47.1, 22.6, 13.7 times. Coverage for the first time, giving a "overweight" rating.
Under the trend of "screen separation", the company is expected to take the lead in the reconstruction of the industrial chain with multiple advantages. under the "screen separation" mode, the whole vehicle factory tends to subcontract the mainframe and display system to different suppliers, so the traditional Tier2 suppliers are also expected to extend to the upper reaches of the industrial chain. Under the reconstruction of the industrial chain, the company is expected to win by virtue of three advantages: (1) the technical services provided by the company run through the whole project cycle of customized models, so it has accumulated a large number of customer and channel resources in the process of business docking. (2) the company deeply ploughs the field of screen design, and can design screen products in line with the downstream management strategy combined with different stages of the industry cycle, and the ability of technological innovation and industrialization is at the leading level in the industry. (3) under the diversified demand trend of the vehicle display screen, the upstream screen factory needs a professional service provider in the vehicle field to expand the market for it. At the same time, the cooperation between the screen factory and the company caters to the demand of the downstream mainframe factory to reduce the cost, and also brings more business opportunities for the company.
Bind upstream leading screen factory to enter Tier1, order abundant company to further integrate upstream and downstream resources, respectively in October 2021 and August 2022 with upstream display device manufacturers BOE Jingdian and Shen Tianma set up joint venture subsidiaries. The strong combination of the company and the upstream screen factory is expected to give full play to their respective advantages of ecological resources and further open up the growth space after the transformation of the company into Tier1. At present, the company has carried out direct business cooperation with BYD, XPeng Inc., Weima Automobile, Changan Ford, BAIC and other vehicle factories. As of August 2022, the company has accumulated more than 10 billion yuan in-hand orders.
Risk tips: production capacity is not as expected, chip shortage mitigation is not as expected, customer expansion is not as expected.