Event: Debang Automotive Lighting, a wholly owned subsidiary of the company, received a letter from Marelli that Debang Automotive Lighting will supply headlight controllers (LDM) for the Marelli A09 project. The project is expected to start bulk supply in 2023Q2, the project cycle is 2023-2028, sales during the cycle is about 60 million yuan.
Technical strength has been recognized and business cooperation has been continuously deepened. The project order letter indicates the recognition of the qualification of a single designated product development and supply, and the receipt of the order letter for the new business of the subsidiary fully reflects its advantages in terms of technical strength, product quality and manufacturing capability. LDM products are one of the company's new car lighting products, which are sold in the way of ODM, that is, the manufacturer provides all services from research and development, design to production and maintenance. The company won the order of headlights from Panasonic Group, a long-term cooperative customer, in 2018, shipped the first LDM products in 2019 and achieved full production in 2020. In terms of production capacity, the company has laid out 4 LDM patch production lines and 5 LDM assembly lines with an annual output of 5 million sets. This cooperation with Marelli will help the company accelerate the expansion of business relations with well-known auto parts suppliers at home and abroad, and is an important breakthrough in the ODM business of LDM products.
Accelerate the on-board layout and open up new performance growth points. The company has been ploughing the general lighting industry for more than 20 years and has accumulated rich manufacturing experience and customer resources. With the development of LED industry chain, general lighting industry has gradually entered a mature period. Since 2018, the company has carried out on-board business, opened up new markets, and actively improved the layout of on-board business. At present, some of the company's car lighting products have been mass-produced and used in Nissan, Toyota, Volkswagen, Audi, Porsche, Chrysler and other well-known automobile brands. The company's in-car lighting products include LDM headlight controller and BMS battery management system, of which the latter has obtained the Wanxiang 123 project order letter in August 2021 and received 7000 million Porsche orders and 1.2 billion Audi orders. The company plans to complete one assembly line and one chip line of BMS in 2022, with an estimated annual output of 200000 sets. This LDM confirmation letter further demonstrates the company's R & D and manufacturing strength, and is of great significance for the long-term layout and development of the company's vehicle business.
Investment suggestion: the company's revenue in 2022 / 2023 / 2024 is expected to be 48.50 / 55.90 / 6.841 billion yuan, and the net profit is 3.33 2022E~2024E 4.67 / 689 million yuan, corresponding to 1.45 yuan per share in 2022E~2024E 0.70 pm, and the current stock price corresponds to 26.14 / 18.63 / 12.63 times earnings ratio. Debang Lighting as a leading company in the industry, the endogenous extension layout of vehicle business ushered in a good opportunity for development, and successively won a number of designated projects to maintain its holding rating.
Risk tips: raw materials, sea freight price increase risk; vehicle project landing is lower than expected; LED industry competition intensified.