Core viewpoints
The company is one of the main manufacturers of engine forged steel crankshaft and automobile clutch in China. The company has been restructured from Guilin Auto parts Factory and has long focused on the R & D, production and sales of power machinery engine crankshafts, automobile clutches, spiral bevel gears, precision forgings and high-strength bolts. The company takes the crankshaft business as the core industry, and promotes the diversification strategy, and the product structure continues to be optimized. in 2021, the company's revenue from crankshaft, clutch, gear, precision forgings and high-strength bolts accounted for 55.75%, 18.28%, 8.11%, 6.07% and 3.61%, respectively.
Actively seize the opportunity for the rapid development of hybrid vehicles, commercial vehicle supporting products are expected to usher in a recovery. In terms of passenger cars, the company grasps the good development prospect of the new energy hybrid car market, deeply binds BYD to become the core crankshaft supplier of BYD's DM-i system, and actively expands new customers, and has now become a supplier of hybrid models and rough products of Geely, SAIC GM, Dongfeng passenger cars, Li Auto Inc. and Liuzhou Secco. In terms of commercial vehicles, while expanding the market share of domestic high-quality customers, the company is actively expanding overseas high-end customers, benefiting from the recovery of the commercial vehicle market driven by the optimization of epidemic prevention policies, the company's sales of commercial vehicle supporting crankshafts are expected to pick up. The crankshaft industry attaches great importance to assets, high-tech characteristics, production capacity and customer resources are the main barriers. At present, the mainstream trend of the crankshaft industry is for the mainframe factory to transfer production, the head manufacturers are expected to undertake the demand, and the industry concentration may further increase.
New energy vehicle electric drive system high-precision gear production line project acceptance is imminent, gear business income is expected to increase. All-in-one electric drive system is the core component of pure electric vehicle, and the gearbox composed of high precision gear and gear shaft is one of the core components of electric drive system. At present, with the improvement of collaborative R & D and manufacturing capacity of the automobile industry chain, the mainframe factory tends to purchase high-precision gears from suppliers. The company actively promotes the high-precision gear production line project of the electric drive system of new energy vehicles. The first phase of the project is expected to be completed and accepted in June 2023. After completion, it can produce 600000 sets of high-precision gears of the electric drive system of new energy. It is expected to bring an annual sales income of 393 million yuan and a profit of 64.28 million yuan.
Investment suggestion
We estimate that the operating income of the company from 2022 to 2024 will be 1.197pm 1.848pm RMB 2.453 million respectively, the net profit of return to the mother will be RMB 0.69max 1.93pm RMB 311 million, and the EPS will be 0.11pm 0.30max RMB 0.48 yuan per share respectively.
Based on the closing price of RMB 6.16 on December 23, 2022, the corresponding PE is 57.47, 20.58 and 12.79 times respectively, covering for the first time and given a "recommended" rating.
Risk hint
The macro-economy fluctuates more than expected; the prosperity of the automobile industry is less than expected; the risk of raw material price fluctuation.
