This report is read as follows:
Suoling shares released its three quarterly results for 17 years, and its performance growth accelerated. Under the background of the gradual release of self-driving huge industrial space, the layout of "hardware + communication module + vehicle networking" and the strengthening of ADAS algorithm and sensor research and development are expected to further enhance the company's card position advantage. Maintain the overweight rating and lower the target price to 26.17 yuan.
Events:
The performance growth is in line with expectations and the overweight rating is maintained. Suoling Q1-Q3 achieved revenue of 956 million yuan, an increase of 51.30% over the same period last year, and a net profit of 108 million yuan, an increase of 77.82%. It is estimated that the net profit for the whole year will be 145 million-176 million yuan, an increase of 90% over the same period last year. Due to the slightly lower-than-expected progress of Sanqi and British Card Consolidated tables, we downgraded the company's EPS in 2017-2019 to 0.42 (- 0.02) / 0.59 (- 0.04) / 0.82 (- 0.06), and still reduced the target share price to 26.17 (- 1.25) yuan based on 62.3 times PE in 2017, maintaining the overweight rating.
Internal and external efforts, performance growth into the acceleration period. The driving force for the growth of the company this year comes from: 1) Sanqi and Yingka began to merge with Q2, with a 17-year commitment of 50 million yuan and 12 million yuan respectively; at the same time, 95% of Hang Sheng's equity transfer was completed, and Q4 began to merge. 2) the revenue ratio of the preloading business to the parent company for the whole year is expected to exceed 70% (about 40% in 16 years), and the profitability and performance certainty are greatly improved. Among the car factories, Zhongtai and Fiat are expected to contribute more than 400 million orders in 17 years.
The acquisition of Hang Sheng to improve the layout of the front installation market. Hangsheng Electronics has long maintained cooperation with domestic first-tier commercial vehicle manufacturers such as Yutong and Sinotruk, with a market share of more than 20%. With the help of Hangsheng's channel resources, the company is expected to break the barriers to entry of commercial vehicle front-line supplier system, infiltrate the business field from passenger vehicles to commercial vehicles, and open up a broad market space for commercial vehicle electronics.
Focus on the huge intelligent market, intelligent cockpit products support future performance flexibility. As a prelude to self-driving, the market demand for intelligent cars has begun to release, and the company has invested 50 million in the construction of liquid crystal instrument production line to consolidate its leading position in the intelligent cockpit field. The unit price of LCD dashboard is 5000-6000 yuan, and the gross profit margin is more than 40%, which is much higher than that of traditional CID products (the average price of the latter is about 1200, and the gross profit margin is about 20%). The improvement of intelligent cockpit penetration is one of the core driving forces of the company's future performance growth. As the company's main customers, domestic automakers have more innovative genes, and the development of the industry is expected to exceed market expectations.
Risk hint: the industry competition aggravates the risk, and the intelligent cockpit infiltration progress is not up to the expected risk.
