Consumer electronics business is stable, in-depth expansion of automotive electronics, new energy vehicle business. Founded in 1989, the company has focused on the R & D and production of electronic connectors for decades, while maintaining steady revenue growth in the two basic sectors of home appliances, consumer electronics and automotive electrical systems. strategic development of new energy vehicle electronic and electrical systems and vehicle charger business.
Meida Electric Appliance is deeply involved in the European automobile market, and the car charger has entered the harvest period. Under the requirements of Europe's strict carbon emissions regulations, car companies accelerate electrification, and the European electric vehicle market is expected to achieve high growth. Since the acquisition of Meta System S.p.A. (Italian Meida) in 2015, the company has set foot in the field of automotive electronics and car chargers. After supplying the original BMW, the company has successively entered European first-tier car companies such as PSA and Porsche, with strong competitiveness.
Actively open up customers and have sufficient orders on hand. Meida Electric is deeply involved in the European automotive market, early involved in the new energy vehicle charger OBC business, early products supporting BMW. Technically, the power coverage of the products ranges from 3.3KW to 22KW, which can meet different charging needs. at present, it is the only mass-produced high-power 22KW vehicle charger in the world. Customers, the company positioning high-end, mainly to the European market, has achieved to BMW, Porsche, Volkswagen, PSA, Dongfeng, Geely and other supplies. Among them, the company's core customer PSA (which sells 3.1 million vehicles in Europe, accounting for 80 per cent of the total) will face a huge fine of 5.4 billion euros in 2021 if it meets 18-year emission standards under Europe's strict carbon regulations. According to our estimates, the global sales of 2020 PSA will be 142200 / 210500 vehicles respectively in 2021 to meet the emission requirements, and the company as a core supplier will benefit significantly.
Meida has been put into production in Chongqing and the release of production capacity has been accelerated. The production capacity of Meida vehicle chargers in Chongqing is planned to be 1 million. At present, the first phase (400000) has been put into production, and the second phase is under construction. Considering that Chongqing Meida is superior to European factories in cost control, it will benefit from the release of downstream customer demand as capacity is released in the future.
The competitive advantage of connectors in key areas is outstanding, and Keshiderun and Liuzhou Shuangfei boost automotive electrical business. As the leading manufacturer of domestic household appliance connectors, the company maintains a leading position in the domestic consumer electronics connector market. As one of the top three Chinese connector manufacturers with international competitiveness, our products rank high in sales in the fields of computer, commerce, retail, education and so on. After the acquisition of Liuzhou Shuangfei and the joint venture Keshiren, the products entered the high-end automakers Beijing Mercedes-Benz, FAW Audi, Volvo and so on. At the same time, as the core customer of FAW-Volkswagen in the automotive wiring harness, the company's revenue in the automotive electrical field is growing rapidly, with revenue of 2.319 billion in 2018, a year-on-year increase of 59.38%. With the growing demand for high-voltage wiring harness for new energy vehicles, the company is expected to usher in new opportunities in automotive high-voltage wiring harness.
Investment advice: the company focuses on connectors, consumer electronics growth is robust, new energy chargers aim at the European market, supply PSA, BMW and other international first-tier car companies, will benefit from the European market volume, while automotive electronics business is sound, high-voltage wire harness has become the core supplier of Volkswagen MEB platform. We estimate that the company's 2020-2021 net profit will be 436 million yuan, 551 million yuan, corresponding to a valuation of 1510 million times, covering for the first time and giving an overweight rating.
Risk hints: downstream demand is lower than expected risk, industry competition intensifies risk, capacity release is less than expected risk, exchange rate fluctuation risk, goodwill impairment risk.