We believe that turbocharging technology has gradually become the mainstream technology route of engine, and there is a broad growth space for gasoline engine turbocharger market in the future. Domestic independent brands after years of research and development reserves, product performance has been close to the level of foreign brands, the future has the prospect of import substitution, the company as a turbocharger independent brand leader will fully benefit. We predict that the EPS of the company from 2014 to 2016 will be 0.07,0.08 and 0.10 yuan respectively, and the corresponding share price PE will be 58 times, 50 times and 40 times respectively. Considering that the explosion period of gasoline engine turbocharger has not yet arrived, we give the company a "recommended" rating for the first time and suggest that we should pay close attention to the mass production process of gasoline engine turbocharger.
Domestic private turbocharger leader: the company is the largest independent brand manufacturer of turbocharger in China, which belongs to the Armament Group, and the major shareholder is Changan Automobile. The main products include turbocharger, engine valve, EMU cooling fan and so on. Customers include Yuchai, Weichai, Xichai and other mainstream engine manufacturers. Among them, turbocharger is the company's mainstream product, with sales of 650000 units in 2013, with a market share of about 11%, ranking NO.4 in the domestic market.
Turbocharger configuration rate continues to improve: the core role of turbocharger is to increase the air intake of the internal combustion engine to promote combustion more fully, so as to achieve the effect of power enhancement and energy saving and emission reduction. Benefiting from the continuous promotion of automobile energy saving and emission reduction policies, the domestic engine turbocharging configuration rate has increased steadily, and the overall domestic configuration rate is expected to be about 7% in 2013.
For diesel turbochargers, the turbocharging rate of medium and heavy diesel engines is relatively high (more than 90%), and the future growth mainly depends on the turbocharger of light diesel engines. At present, the turbocharger rate is only about 30%. It is expected that the upgrading of IV emissions will significantly increase the turbocharging rate of light diesel. For gasoline engine turbocharger, turbocharging has gradually become the mainstream technology route. The launch of Toyota and Honda turbocharger indicates that this technology has been recognized by the world's major automotive giants. Considering the increasingly stringent management of the average fuel consumption of passenger car enterprises, it is required that the average fuel consumption should be reduced to 6.9L/100km in 2015 and further to 5.0L/100km in 2020 to promote engine miniaturization and supercharging, which is an effective way for passenger car enterprises to take into account both power performance and energy saving and emission reduction. Nearly 60 supercharged models are on sale in 2013 and are expected to reach about 80 this year. With the increase in the number of models on sale, the supercharging rate of gasoline engines is expected to increase steadily.
Gasoline engine supercharger is the main focus of the company in the future: the research and development of gasoline engine turbocharger began in 2004, entered the AM market in 2009, and began to supply small quantities of OEM (mainframe factory) in 2013. The company already has a production capacity of 100000 gasoline engine superchargers and 200000 units under construction (expected to be put into production in 2016). It has begun to supply small batches of Xinchen in Mianyang, and is expected to supply small quantities of Changan and the Great Wall in the second half of this year.
The performance of the company's gasoline engine turbocharger is close to the mature product of BergWarner, and the existing automatic production line will provide guarantee for product consistency and stability, and the price advantage is expected to reach 10-15% after mass production in the future. We are optimistic about the development prospect of gasoline engine turbocharger for two main reasons: first, the gasoline engine turbocharger has a broad market space and is currently in the stage of rapid growth; second, the unit price and gross profit margin of gasoline engine turbocharger are higher than diesel turbocharger, and the batch production of gasoline engine turbocharger will inject flexibility into the company's profit growth in the future.
Risk hint: the automobile market has declined sharply; the promotion of gasoline engine turbocharger is lower than expected.
