Company Overview: Automobile Drivetrain & Aerospace Dual Main Business Drive: 1) Automobile Transmission: Revenue is about 90%, including synchronizers and differentials, and subsequent expansion of motor shafts and main reduction gears. 2) Aerospace: structural parts and special aerospace valve pipelines. The shareholding structure is stable, and the actual controller holds a total of 28.49% of the shares. Early synchronizer development was stable, and the current entry into aerospace and the layout of differentials and motor shafts contributed incrementally.
Overall perception: The industrial layout is complete, team trust is strong: 1) The industry layout is complete: the company has process capabilities for the whole process from raw material furnace casting, blasting, machining, heat treatment to online inspection, as well as the ability to make tools and molds, which is conducive to shortening the delivery cycle, reducing procurement costs, and improving profitability; 2) Strong team trust: the core team has worked and held shares in the company for many years, management is loyal and energetic, and the actual controller and management have a high level of trust and tacit agreement.
Industry analysis: Electrification promotes gear outsourcing, domestic substitution of differentials is accelerating, new energy is more demanding on gears, and gear outsourcing is becoming a trend: 1) the old production capacity of traditional OEMs is difficult to switch in the short term; 2) New forces do not have the ability and experience to invest in heavy gear assets in the short term. Synchronizer: The transmission keeps the speed of gears in each gear close when shifting gears. Bicycles are 270-570 yuan, with an estimated market space of 8 billion dollars in 25, with a compound growth rate of 10%. Mainly from overseas and foreign investors, domestic substitution has basically been achieved at home. Differential: Under cornering and special terrain, different wheel speeds are allowed on both sides. A single set is 200 yuan, 1 to 3 bikes. The estimated market space of 7.4 billion in 25 years is 7.4 billion, with a compound growth rate of 1%. The concentration is high. In the early stages of domestic precision forging, precision forging and Haoneng are currently working together to accelerate domestic substitution.
Recommended logic: Synchronizers have poor perception and differentials have reached an inflection point, and the aerospace business is growing: 1) The main synchronizer business has steadily increased slightly.
The market believes that bundled fuel vehicles are declining, and there is a big difference in perception: 1) Passenger cars: the increase in DCT share offsets the decline in total volume and is generally stable; 2) Commercial vehicles: commercial vehicles are recovering, AMT penetration continues to increase, and export business is growing. 2) The differential incremental inflection point has been reached. Supply side: active investment in production capacity, planning 5 million units in 25 years and 10 million sets in 30 years; demand side: new electrified production capacity, high quality new energy customer structure; revenue side: the project enters a crawling cycle, revenue in '22 +209.76% compared to year 22; profit side: hydropower labor dividends & industrial chain integration advantages, stable net interest rate of 18%. 3) Incremental options for motor shafts and main reduction teeth. Further vertical expansion along the transmission system based on process and customer homology. 4) Aerospace growth is steady. The acquisition subsidiary Hao Yiqiang performed brilliantly, revenue grew steadily, and profit margins were high.
Investment rating: We expect the company's revenue in 23-25 to be 21.60/28.10/3.770 billion yuan respectively, with a year-on-year growth rate of +46.77%/+30.09%/+34.16%; achieving net profit of 24.3/394/633 million yuan, with a year-on-year growth rate of +15.12%/+61.92%/+60.59%, corresponding to the EPS of 0.62/1.00/1.61 yuan, corresponding to the current PE of 15.2/9.4/5.8 times, taking into account the company's aviation The space business continues to soar, and the number of differentials has been increased one after another, covered for the first time, and given a “buy” rating.
Risk warning: The prosperity of the global automotive industry fell short of expectations; the growth of the new differential business fell short of expectations; the recovery of commercial vehicles fell short of expectations; the gross margin of the automobile business fell short of expectations; and the aerospace business fell short of expectations.