From turbocharger to diversified operation. The company started as an automobile turbocharger and is now a leading turbocharger for domestic commercial vehicles. In 2017, the company entered the field of photovoltaic and intelligent manufacturing through the acquisition of Heng Heng Technology to achieve multiple drivers. 18H1, the company's three core business turbochargers, photovoltaic equipment and photovoltaic modules achieved revenue of 1.6,1.2 and 130 million yuan respectively, accounting for 36.2%, 26.5% and 29.4% of revenue respectively. We expect the future: 1) supercharger: the automobile market remains stable, and the rail transit and shipping field is expected to become a new growth point; 2) photovoltaic equipment: with the continuous landing of new products and the resumption of high-speed growth of the photovoltaic market; 3) photovoltaic modules: the market order is full and is expected to be maintained.
Merger and acquisition of Heng Heng, deep ploughing photovoltaic field, laminator field leader. In terms of photovoltaic equipment, the company's subsidiary Heng Heng Technology products cover the entire photovoltaic module packaging line, including laminators, serial welders, stacking machines, framing machines and other equipment. Among them, laminating machine is the company's leading product, with a national market share of more than 50% in 16 years. According to the forecast of China Industry Information Network, the new installed capacity of the world from 2019 to 2021 will be about 11.3% CAGR. The installed capacity of 2021 will reach 140.4GW. With the landing of the company's new products, the sales of equipment products are expected to achieve rapid growth with the recovery of the market. In terms of photovoltaic components, SunSpark is a wholly-owned subsidiary of Hongheng Technology established in the United States in 2015, and there are currently full orders from SolarMax, GermanSolar and other customers. The company expects SunSpark's revenue to grow by 46.2%, 17.7% and 9.7% from 2018 to 2020, and its revenue is expected to reach 630 million yuan in 2020.
The business of turbocharger is growing steadily, and the prospect of layout intelligent manufacturing is bright. The company is the leader of domestic commercial vehicle turbocharger, and its products are mainly used for light trucks and heavy trucks. The company's main customers are Weichai Power, Yuchai Power, Great Wall Motor, Foton Automobile and other industry leading enterprises. We expect the company's turbocharger business revenue to maintain steady growth for two main reasons: 1) steady growth in the automotive business: we expect young card sales from 2019 to 2021 to maintain an average annual growth rate of 5%. Heavy truck sales are expected to maintain a high level of about 1 million vehicles. 2) Operation in other areas: rail transit, shipping and new energy vehicles are all expected to land or thicken their performance. In addition, the company's high-speed rail products have entered the supplier system of CRRC Group, which is expected to become a new performance growth point.
Investment advice:
The company is the leader of commercial vehicle turbocharger, through the acquisition of Heng Heng mastered a number of core technologies, successfully entered the field of photovoltaic and high-end manufacturing. In the future, with the expansion and landing of the company's new products, and the recovery of the photovoltaic market, the company is expected to enter a period of rapid growth. We estimate that the revenue from 2018 to 2020 will be 8.81,11.94 and 1.416 billion yuan respectively, the net profit will be 1.05,1.48,187 million yuan respectively, and the EPS will be 0.45,0.63,0.80 yuan per share respectively, corresponding to 31,22,17 times PE. The final weighted calculation of the company's target market capitalization of about 3.94 billion, corresponding to the share price of about 17 yuan, for the first time to cover the "buy" rating.
Risk tips: commercial vehicle production and sales are not as expected, photovoltaic installed capacity is not as expected, the company's new products and new customer expansion is not as expected.
