DeLian Group: domestic leading enterprise of automotive chemical raw materials and chemical products: the company is a large group company specializing in automotive series chemical products. The main business covers the three modules of automobile fine chemical manufacturing, automobile sales service and automobile maintenance, which is a large group complex integrating production, research and development, sales, trade and logistics, and is the leader of domestic automotive chemical raw materials and products industry. Since its establishment, the company has gradually developed and has five large production bases, which are located in Changchun, Shanghai, Foshan, Chengdu and Qingdao.
Actively open up new energy customers, the company's revenue and return net profit are growing against the trend: as the leader of the subdivision industry, the company has achieved continuous growth in 2017-2019, with revenue growing from 3.145 billion yuan in 2017 to 3.851 billion yuan in 2019. the net profit of returning to the mother increased from 1.54 yuan in 2017 to 218 million yuan in 2019. The company cooperates strategically with many international chemical giants, and the rich sources of middle and high-end technologies and basic raw materials provide a product basis for opening up more downstream vehicle factory markets. The company has successfully become a stable supplier to more than 50 downstream automobile factories, including FAW-Volkswagen, SAIC-Volkswagen, SAIC-GM, brilliance BMW, Beijing Mercedes-Benz, BYD, Changan Ford and Guangzhou Automobile Group. At the same time, it has opened up a number of new energy vehicle customers, such as Tesla, Inc., NIO Inc. Automobile, Baiteng Automobile, Weima Automobile and Singularity Automobile.
Adhesives and antifreeze highly benefit from electrification, the value of the car has doubled, opening up the space for five years of rapid growth: electric vehicles will usher in resonance at home and abroad this year, and the trend of automobile electrification is a major boon for adhesive and antifreeze manufacturers. We predict that the antifreeze market will achieve sustained and rapid growth in the next five years, and the compound growth rate of passenger car antifreeze market will reach 8.57%. At the same time, it is estimated that in the next five years, the compound growth rate of electric vehicle adhesive market will reach 34.30%, and that of passenger car adhesive market will reach 8.90%.
PACK silicone gel for battery is expected to be popularized, and the value of adhesive for bicycles is further improved: thermal conductive adhesive is needed for power batteries. Thermal conductive adhesive mainly includes epoxy resin thermal conductive adhesive, silicone thermal conductive adhesive and polyurethane thermal conductive adhesive. Among them, the thermal conductive silicone gel has the best comprehensive performance, which has previously mainly met the power cooling requirements of electronic circuits. Considering the increment of battery PACK silicone gel, we believe that the adhesive market space driven by electric vehicles will further expand, and the adhesive market space will increase from 6.346 billion yuan in 2020 to 10.272 billion yuan in 2025, and the compound growth rate will increase to 10.11%.
The automotive aftermarket business has entered the harvest period: by the end of 2019, the company has completed a total of 2 self-operated flagship stores, developed more than 230 regional partners and more than 20000 cooperation mode service contract stores. With the transformation of the company's automotive aftermarket business, efficiency has been effectively improved in the past three years, with benefits of-24.6758 million yuan,-19.8685 million yuan and-4.4139 million yuan respectively in 2017, 2018 and 2019, indicating that the business scale has been successfully expanded with the business transformation. the expansion of business scale has effectively improved the profitability.
Profit forecast and investment advice: considering the long-term benefit of the electrification trend to the company's business and the smooth progress of the company's automotive aftermarket business, we predict that the company's income from 2020 to 2022 will be 40.49,46.53 and 5.242 billion yuan respectively, and the return net profit will be 2.64,3.42 and 414 million yuan respectively, and the current market capitalization corresponds to the PE level of 20.65,15.98,13.19X respectively. We select the parts that also have a great improvement in the value of new energy vehicles, including Top Group, Sanhua Group, Huayu Automobile, Chunsheng Electronics, Kodali, Xusheng shares, and so on. We calculate that the PE of 12 comparable companies from 2020 to 2021 is 36.83,28.99X respectively, which is much higher than the current valuation level of Deluitte Group. From the perspective of the company's historical valuation, the average valuation of the company over the past five years is 31.15X, which is also a big improvement compared with the current valuation level. If we choose 32X in 2020 as the target valuation, the target market value of the company is 8.48 billion yuan, and the corresponding target price is 11.23 yuan.
Risk tips: the epidemic leads to the risk of demand decline, customer concentration risk, raw material price fluctuation risk.
