Main points of investment:
Yunyi Electric is a domestic automotive rectifier and regulator leader. The company's main products are intelligent power controller products, including automotive rectifiers, regulators, high-power diodes, etc., for many years in the high-end passenger car market, in the domestic OEM market, overseas AM market has a considerable share.
The upgrading of automobile consumption and independent rise is a major trend of the industry. The upgrading of household consumption is the long-term driving force for the structural optimization of the automobile industry. The competition situation of China's automobile industry is strong in the early stage of joint venture and weak in autonomy; since 2009, independent brands have benefited from the wave of SUV consumption, and formed a differentiated competition pattern with joint ventures by deeply digging structural opportunities and cooperating with the new car cycle of popular styles, and continue to develop medium-and high-end models to seek long-term development.
Consumption upgrade opens the blue ocean of parts and components, and the intelligent power controller is expected to benefit significantly and double the market capacity. Driven by the upgrading of automobile consumption, the electronic, intelligent and energy-saving trend of new cars is clear, and this new cycle is expected to significantly drive upstream parts to enjoy the dividends of import substitution and export, and the new blue ocean is opening; among them, the intelligent power controller is expected to usher in the opportunity of diversified application scenarios and product optimization and upgrading, and the market space is expected to double upward from 10 billion yuan in the future.
The company's controller is in the process of upgrading LIN bus products and is optimistic about the volume and price of the next 2-3 years. The company's main business controller is at the inflection point of upgrading in subdivided areas. At present, the company has a mature product "LIN bus controller", and the new products have entered the mainstream supply chain. We expect that the company is expected to double the value of its main products, benefiting from this round of consumption upgrading. With the launch of more new models from 2017 to 2018 and the sinking of LIN bus products to 150,000 yuan models, the proportion of new products is expected to increase to 20% and 30%. At the same time, the price reduction of raw materials, vertical integration and product structure optimization will also help the main industry of the controller to welcome the honeymoon period of volume and profit, and contribute to good profit elasticity.
Emerging business has entered the track of mass production and is the source of power for long-term growth. New business areas such as high-power diodes, wipers and new energy vehicle control systems have gradually expanded the scale of mass production since 2017, further helping to thicken profits.
Profit forecast and investment advice. It is estimated that the corresponding EPS of the company from 2017 to 2018 will be 0.18,0.24 yuan, and the closing price PE on April 26, 2017 will be 57 times and 42 times respectively. With comprehensive reference to the relevant targets of A-share auto parts, the average dynamic PE of comprehensive comparable companies in 2018 is 36-55 times. Considering that the upgrading of the company's main business products and the launch of new business are in the initial stage, the major trend is determined and the future growth is superior, giving the company 50 times the dynamic PE in 2018, with a target price of 12.00 yuan and maintaining a "buy" rating.
Risk hint. The prosperity of the automobile industry fluctuates. The project progress of high-power diodes, intelligent wipers, motor and control systems of new energy vehicles is lower than expected.