Events:
On March 23, 2018, the company released its 2017 annual report. In 2017, the company achieved a total operating income of 642 million yuan, an increase of 19.79% over the same period last year, and the net profit attributable to shareholders of listed companies was 141 million yuan, an increase of 28.35% over the same period last year. At the same time, the company expects the net profit attributable to shareholders of listed companies to be 27.6155 million yuan to 34.5194 million yuan in the first quarter of 2018.
Main points of investment:
With the intelligent upgrade of the product, the third generation LIN bus intelligent power controller is expected to grow. The company is a leading enterprise of automotive intelligent power controller in China, mainly engaged in automotive rectifiers and regulators, customers basically cover domestic independent brands, with a market share of more than 20%. Affected by the decline in the growth rate of downstream car production and sales in 2017, sales were 7.9382 million and 9.7347 million respectively, compared with 4.79% and 10.77% last year (17.64% and 32.70% respectively in 2016). In recent years, due to the company's increased intelligence and information upgrading of its main products, the average sales price of products has increased slightly, with a gross profit margin of 35.98%, a steady increase over last year. The intelligent power controller of the company has been upgraded obviously, from the first generation single function and the second generation multi-function control to the third generation LIN bus intelligent power controller, realizing real-time communication with ECU (driving computer), which can accurately match the electricity demand with the automobile output electricity consumption, and achieve the effect of energy saving and emission reduction. The price of the LIN bus intelligent power controller is twice that of the second generation multi-function intelligent power controller, and it is only 50% of the average price of similar products in the market. The product performance-to-price ratio is obvious. At present, the sales volume of the LIN bus intelligent power controller accounts for about 10%, and it is expected to increase by 5% in the future. Therefore, in the long run, the LIN bus intelligent power controller is expected to become a new growth point for the company's product structure adjustment and profit improvement.
The fund-raising project has been postponed and the short-term performance is under pressure. In 2016, the company raised 550 million yuan in a private offering for the high-power automotive diode expansion project, the new energy vehicle motor and control system industrialization project and the enterprise testing and test center project. however, due to a variety of factors affecting the actual construction of the project lagged behind expectations, after careful study, the company extended the scheduled useful time of the high-power automotive diode expansion project from the end of 2017 to the end of 2019. The industrialization project of motor and control system for new energy vehicles and the project of enterprise testing and test center have also been postponed for one year to the end of 2018. High-power automotive diode as the core component of automotive rectifier, a large number of domestic small and medium-sized automotive rectifier manufacturers do not have high-power automotive diode production capacity, most of the market is occupied by foreign capital. Originally, the completion of the company's high-power diode expansion project is expected to enable the company to expand to export under the condition of meeting the domestic demand of its own rectifier, so as to achieve import substitution and bring a profit growth of 100 million yuan to the company. However, the delay in the progress of the fund-raising project and the slowdown in the growth rate of domestic car sales have put some pressure on the company's 2018 performance.
Accelerate the expansion of intelligent motor control system, diversified development of products. In order to comply with the development of automobile electrification and intelligence, the company has actively laid out the motor and control system, which has been put into trial production in a small batch and put into the electric vehicle market. The intelligent wiper motor and control system have been successfully verified by the core customers BYD Automobile, Changan Automobile, Shanghai Automobile, BAIC Yinxiang Automobile, BAIC Foton Automobile and other vehicle factories and realized the batch supply of core components. In the future, the company will further develop a series of products such as intelligent window motor and control system and intelligent seat motor and control system to enrich the company's intelligent motor and control system product line. At that time, the company will form a diversified development pattern of automotive electronic control products dominated by intelligent power controllers and supplemented by intelligent motors and control systems.
Profit forecast and investment suggestion: the company subdivides the leader of China's automotive power controller, and the improvement of the sales share of the third generation LIN bus intelligent power controller is expected to improve the company's product structure and open up the company's long-term profit space. The progress of the fund-raising project has been delayed and the growth rate of downstream car production and sales has slowed down, affecting the company's performance in the short term. We estimate that the company's EPS from 2018 to 2019 will be 0.17,0.20 yuan per share, respectively. Combined with the closing price of 6.21 yuan per share on March 23, 2018, the corresponding PE will be 36.13 times and 31.77 times, respectively.
Risk factors:
The sales of downstream supporting models declined and the market expansion fell short of expectations, the construction of high-power diode projects did not meet expectations, and the construction of motor control system projects did not meet expectations.