Main points of investment:
Product integration promotes the increase of unit price, and R & D reserves the new generation technology company's main products are the first, second and third generation automobile hub bearing units, covering the current major medium-and high-grade passenger vehicles and commercial vehicles. Application brands include Mercedes-Benz, BMW, Audi, Ford and so on. The hub bearing has been developing towards integration for a long time, gradually integrating more components from one generation to the third generation, and the unit price increases synchronously. At the present stage, with the accelerated pace of vehicle production upgrading in China, the third generation products will become the mainstream trend, and the change of product structure will bring more market space. The company pays attention to research and development, products are different from the domestic homogenization of the ordinary market, mainly for Europe and the United States in high-end after-sales market. The layout of the technical reserve of the fourth to sixth generation products in advance will help the company to quickly adapt to the lightweight market demand in the future.
Independent brand + accessories chain entered the overseas sales, the domestic OEM market layout company currently mainly through the after-sales market to sell products, after-sales accounts for more than 90% of the total revenue structure, of which the overseas part accounts for more than half. The company maintains good cooperative relations with foreign independent brand manufacturers such as Huimen, Youpisheng and GMB, and foreign import traders such as WJB and MPA, and enters American auto parts chains such as AutoZone, NAPA, Advance with the help of traders and independent brand manufacturers, the company has more room for overseas after-sales revenue growth in the future. In the domestic OEM market, the company has obtained the mass production project of Southeast Automobile and further planned cooperation with joint venture manufacturers; while in the domestic after-sales field, the company has steadily promoted negotiations with regional dealers. Based on the growth of car ownership in China, the company is expected to open the domestic after-sales market with the help of multiple sales channels.
IPO raised funds to expand production and focused on research and development, and was optimistic about future product structure upgrading. The company was listed on the gem of the Shenzhen Stock Exchange on September 8, 2017, with a net fund-raising of 957.594 million yuan after deducting related fees. The funds raised will mainly be used to expand the production capacity of automobile hub bearing units and technical research and development projects. Among them, the 3.6 million capacity expansion project meets the growing demand of the overseas middle and high-end after-sales service market, and lays the capacity foundation for the development of the domestic market. The technology R & D project carries on the upgrade research and replacement research on the basis of the company's existing products, so as to reserve the technical basis for the next generation products. We believe that this fund-raising investment project will bring about an improvement in production, sales and product quality in the short term, and promote the upgrading of the company's product structure.
Earnings forecast and investment rating: it is estimated that the company's earnings per share in 2019 will be 3.40, 4.14 and 5.04 yuan, respectively, and the corresponding PE will be multiple of 26-21-17, respectively. For the first time, the company will be given an "overweight" rating.
Risk tips: the risk of rising raw material prices; the risk that the business income of major overseas customers is not as expected; the risk that the cooperation between domestic supporting manufacturers is not as expected; and the risk that the fund-raising project is not as expected.
