The company is an industry leader in the field of home appliance parts segmentation, with a global market share of over 1/4. Through mergers and acquisitions into the field of photovoltaic modules, it has achieved a development strategy based on the home appliance parts business and led by the new energy business. The company's photovoltaic module business has begun to gradually expand, additional production capacity continues to advance, and plans to enter the energy storage sector. Performance growth can be expected.
Investment highlights:
The company's market share of starters and thermal protectors led the market, and revenue growth was steady: the global market share of the company's core products (starters and thermal protectors) in the home appliance sector was about 29%. It led the industry in terms of revenue scale and profitability, and its leading position was stable. Currently, the global market size of refrigerators, freezers and other household appliances is stable, and the high-end transformation of the home appliance industry and the development of emerging home appliances are expected to drive the company's basic market to remain stable. At the same time, the company's home appliance business segment continues to expand its product categories. For example, temperature controllers have benefited from the development of small household appliances, and the business scale has steadily increased in recent years.
The company entered the field of photovoltaic modules, and the production capacity expansion plan progressed steadily: from 2021-2022, the company gradually took control of Fuller New Energy and entered the field of photovoltaic modules. Fuller New Energy currently has a production capacity of 1.5 GW/year. The proposed new 2 GW high-efficiency photovoltaic module project is expected to be completed and put into operation by the end of 2023. It is planned to expand the PV module production capacity to 5GW in the future. At the same time, the company has sufficient orders in hand, and customers at home and abroad continue to expand. With the gradual release of production capacity, the scale of the company's photovoltaic business is expected to increase rapidly.
The downstream application field of the company's motors has expanded to new energy sources and has received orders from BYD: Zhejiang Electric, a subsidiary of the company, focuses on the fields of small and medium-sized motors and micromotors. The company has strong technical strength, extensive product applications, and high brand awareness. In 2022, the company successfully entered BYD's supply chain and expanded its business in the field of new energy.
Cooperation with Changfeng Intelligence is expected to gradually enter the field of energy storage: the company has now reached a strategic cooperation with Changfeng Intelligence to promote the energy storage business, which is expected to further increase the company's new sources of profit growth.
Profit forecast and investment suggestions: We expect the company's revenue from 2023 to 2025 to be 3.245 billion yuan, 4.708 billion yuan, and 6.350 billion yuan respectively, with year-on-year growth rates of 66%, 45%, and 35% respectively. The net profit of the parent mother is 179 million yuan, 206 million yuan, and 270 million yuan respectively. The corresponding PE (as of June 1) is 23X, 20X, 15X, covered for the first time, and given a “buy” rating.
Risk factors: PV module prices falling short of expectations, new energy customer expansion falling short of expectations, construction of new production capacity falling short of expectations, large fluctuations in raw material prices, etc.