The customer structure is on the high end, and the technology leadership contributes to the company's performance growth.
1) the company mainly supplies micro-special motors to high-end customers around the world, and the market is all over the world. Research and development investment continues to increase to help the company's product core performance indicators to reach the international advanced level.
2) with the downward trend in commodity prices, corporate profitability is expected to enter the upward channel. The company's production and sales of all kinds of motors have increased steadily, and export sales have maintained sustained growth, focusing on opening up the domestic market. The company's main raw materials include silicon steel sheet, enamelled wire and other commodity prices downward trend, profitability is expected to enter the upward channel.
The company belongs to the field of high-end mechatronics has a broad prospect.
1) the domestic market for micro and special motors continues to grow, accounting for more than 70% of the global output. The global production of micro and special motors has reached 17.5 billion units in 2015, and is expected to increase to 23 billion units in 2020, with a CAGR of about 5.6% in 2015-2020.
2) the emerging field is in the ascendant, and the prospect of micro-special motor is broad. With the promotion of intelligence, automation and information in various fields, there are thousands of categories of micro-special motor products, which are widely used in a wide range of fields. At present, the most widely used field is the information industry, accounting for 29%.
3) the fund-raising projects are advancing steadily, and the production capacity expansion is expected to grow. The company's investment project is mainly based on the capacity expansion of single-phase cover-pole motors. after reaching production, the project will increase the production capacity of cover-pole motors by 8 million units per year, with a total production capacity of 3300 million units per year. The sharp expansion of production capacity shows that the company is optimistic about the growth of market demand in the future.
Layout intelligent manufacturing, gradually to industrial automation, artificial intelligence transformation and upgrading.
1) Servo system technology has become one of the supporting technologies of industrial automation. With the increasing maturity of AC servo system technology, the gap between supply and demand of servo motors continues to expand. In 2017, the domestic demand for servo motors reached 8.72 million, the output was only 4.58 million, and the gap between supply and demand reached 4.14 million.
2) for many years, the servo motor technology of the company has reached the level of similar products in Japan. The company began to develop servo systems in 2014. At present, the performance of the products has reached the level of similar products in Japan, and it has been put into mass application in automation equipment, industrial robots and 3C markets.
3) Measurement of servo system market space. We expect the size of China's servo system market to grow at a high growth rate. The market demand from 2019 to 2020 is 49.1 billion yuan.
4) starting from the electrode, the company has laid out the servo system and gradually transformed and upgraded to the fields of robot, industrial automation and artificial intelligence. The product strategy has a gradient and opens up the long-term market space.
Coverage for the first time, giving a "overweight" rating. We estimate that the company's net profit from 2019 to 2021 will be 124 million yuan, 156 million yuan and 197 million yuan respectively, and the corresponding PE will be 33, 27 and 21 times respectively. With the downward trend of commodity prices in recent years, the company's cost advantage is increasingly apparent, and profitability is expected to enter the upward channel.
In addition, the company laid out the servo system earlier, and gradually transformed and upgraded to the field of robot, industrial automation and artificial intelligence, the technology has the advantage of first mover, and the servo motor has been put into the market in large quantities, which is expected to become a new performance growth point of the company.
Risk hints: the risk of imposing tariffs on Sino-US trade; the risk of fluctuations in raw material prices; the risk of less-than-expected technological breakthroughs; the risk of intensified market competition; and the risk that the expansion of servo motor market is not as expected.
