The company is a domestic automobile design leader, with “turnkey” vehicle R&D capabilities and automotive powertrain design and manufacturing capabilities. The company was founded in 2007. Its main business includes automobile design, platform architecture development, prototype trial production, intelligent platform development and supply chain management, covering the entire automotive development industry chain, and has complete “turnkey” capabilities. The company's automobile design revenue accounts for about 10% of the domestic market and is in a leading position among independent third-party design companies.
As an independent automotive design supplier, the company will fully benefit from the expansion of the new energy industry as the disruptive impact of the pandemic is eliminated. The company has developed nearly 400 models of fuel vehicles and new energy vehicles, covering a variety of models from sedans (A00 to C), SUVs, MPVs to commercial vehicles, and cooperates with more than 80 customers at home and abroad. The post-pandemic era will fully benefit from the expansion of the new energy industry. New impetus for the automotive design industry: 1) A new round of brand warfare catalyzes the launch of new models; 2) The new energy model development process is gradually maturing, with more emphasis on platform-based development to shorten the vehicle development cycle; 3) Under the price war, the launch of more new models has become the main means to enhance the competitiveness of car companies.
Expand the boundaries of the automotive design business, anchor the Tier 0.5 position, and enter the overseas automotive design blue ocean market. The overseas new energy market also belongs to the blue ocean market. As an independent third party design company, the company cooperates with many well-known car companies, endorses a variety of mature full-process model development experience, and has deeply accumulated research on overseas regulations and standards. At the same time, a forward-looking layout design team in Europe, America, Japan and other regions will help the company undertake and implement overseas automotive design projects.
The volume of the parts business opened up a second growth curve. The company has extensive technical reserves and has developed various automotive power system components such as electromagnetic DHT, all-in-one electric drive assemblies, and V6 engines. Among them, the electromagnetic DHT has the advantages of fast response time and high operating efficiency compared to other traditional clutch DHTs. The 22H2 has been assembled into Wuling hybrid models one after another, helping the company's performance continue to grow with the release of hybrid models such as Wuling Star.
Profit forecasts and investment ratings: The domestic and foreign NEV markets continue to explode, and the company will fully benefit. At the same time, the number of powertrain components, electromagnetic DHT, and multi-in-one powertrains, are being released one after another, contributing to the second curve. We expect the company's revenue for 2022-2024 to be 10/17/2.4 billion yuan respectively; the net profit of the mother is 0.87/2.12 (+143%) /3.26 (+54%) billion yuan respectively, and the corresponding EPS is 0.17/ 0.42/ 0.65 yuan respectively. First coverage, giving a “recommended” rating.
Risk warning: The prosperity of the automotive industry is declining; the performance of the hybrid market falls short of expectations; the penetration rate of new energy falls short of expectations; the price war reduces profits; and the pace of OEMs' new model launches falls short of expectations.