A small giant with a precise structure, the laptop business has ballast stone attributes. The overall development of Chunqiu Electronics in the past was based on structural component modules and related precision molds. In an environment where the notebook industry supply chain continues to win out of the fittest, it has steadily grown into a leader in the domestic notebook precision structural parts industry in a purely endogenous manner.

In the past, regardless of the industry's downturn or demand growth cycle, it has shown ability and resilience to surpass the industry average. In 2022, global laptop shipments have basically fallen back to the state before the pandemic, and the overall competitive pattern has not changed significantly. The probability that subsequent demand will fall further is extremely low. In the face of a relatively “steady” downstream demand, the company's laptop business is expected to play the role of a ballast stone in performance.

The trend of weight reduction for new energy vehicles is clear, and magnesium alloy structural components are facing good opportunities for development. The shift from traditional fuel vehicles to new energy vehicles has made range a major concern for users. Weight reduction is one of the key solutions. In order to achieve unregulated weight reduction, structural material upgrading has become a key method. Using magnesium alloy as structural parts can effectively reduce the vehicle's own weight; of course, in many application scenarios, physical performance advantages other than density are also expected to be fully exploited. In the field of new energy vehicles, the penetration rate of magnesium alloy structural parts and the value of bicycles are expected to increase simultaneously in the future. At the same time, the magnesium-aluminum price ratio is expected to come close to replacing the sweet spot, laying a good foundation for the development of magnesium alloy structural parts.

Magnesium alloy structural components are expected to experience rapid penetration, and the spring and autumn electronics harvest period is approaching. Currently, the production processes for magnesium-aluminum structural parts are mainly cold chamber die casting and semi-solid state injection molding. Compared with semi-solid injection molding, the advantages of the two are clear. Chunqiu Electronics is one of the few domestic enterprises with semi-solid state injection molding process capabilities in China. Currently, the company has made gains in the field of instrument panels/central control screen structural components, and will actively deploy large markets such as CCB beams and motor housings in the future. New performance growth is already taking shape.

Investment advice: The company's net profit for 2022-2024 is estimated to be 156 million, 208 million and 332 million yuan respectively. The current stock price corresponding to PE is 235, 17.6, and 11.0 times, respectively, and is valued 15 times that of 2024. The corresponding target price is 11.34 yuan/share, covered for the first time, and given a purchase rating.

Risk warning: (1) Laptop shipments declined further; (2) the penetration of magnesium alloy structural components of new energy vehicles fell short of expectations.