Main points of investment:

For the first time, the "overweight" rating was given, with a target price of 64.4 yuan. Different from the market's understanding of Weidi Automotive Electronic system provider, we believe that the company already has a certain scale of data resources at the bus end, which has laid a solid foundation for the company to develop solution platform business in the future. it is expected to enter the field of intelligent driving from the perspective of intelligent product upgrade and data platform. It is estimated that the net profit of the company for 16-18 years is 0.89 billion yuan, respectively, and the corresponding EPS is 0.74 billion yuan and 0.79 billion yuan respectively. With reference to the average price-to-earnings ratio of 69 times for the automotive electronics and smart car industries, and considering the upward flexibility brought about by the layout of the company's automotive electronics industry, Weidi shares are given a target price of 64.4 yuan (corresponding to a price-to-earnings ratio of 87 times 2016) and a "overweight" rating.

CAN bus system card data bus, intelligent driving potential target. Weidi Co., Ltd. is a leading provider of automotive electronic products in China, and its products include four series: CAN bus and sensors. Among them, CAN bus plays two major roles in intelligent driving electronic system: ①, as the core of vehicle data information distribution, realizes in-vehicle network communication and intelligent control. As the interface and communication platform of automobile data information sharing, ② realizes the interaction between automobile and external environment (including other vehicles, traffic facilities, etc.). We believe that after years of R & D and sales of car body electronic products and the accumulation of overall solution projects, the company has mastered a certain scale of data resources at the bus end, which has laid a solid foundation for the company to carry out solution platform business in the future. Combined with the development trend of the company's CAN bus control system and intelligent driving technology, the company's entry into the field of intelligent driving may lie in two aspects: intelligent upgrading of ① products: expansion from the breakthrough point of improving vehicle performance, safety and handling to intelligent driving; and ② data platform: the use of big data interconnection and cloud computing technology to actively develop to the direction of vehicle networking platform.

Catalyst: epitaxial layout of automotive electronics industry.

Core risk: the progress of industrial layout is not as expected.