Turbocharger accessories leader, revenue-profit steady growth. The company is committed to the auto parts industry, mainly engaged in turbocharger key parts research and development, production and sales, the main products are turbocharger exhaust valve components, turbine shell and intermediate shell and other parts. With a revenue of 631 million yuan in 2019, the company is the leading enterprise of turbocharger exhaust valve in the world.
At the industry level, turbocharging still has room for growth in the long run, and accessories faucets are expected to benefit. Since 2020, the carbon emission regulations of various countries have begun a new round of tightening. China and the European Union respectively require that the fuel consumption level of passenger vehicles be reduced to 5L/100km and 3.8L/100km in 2020. Low emissions and low fuel consumption have become the general trend of automobile development in the future. Turbochargers are the core configuration for fuel vehicles to reduce fuel consumption and improve economy in the future. as of 2019, the permeability of domestic turbochargers is about 50%. Compared with Europe, there is still room for improvement of 25-30PCT, corresponding to the global / domestic market, there is still 4.7% and 9.8% compound growth space in the next five years. The company is a leading company in the sub-industry of exhaust valve components, with an estimated global market share of about 11%, deeply bound to global first-class suppliers, and is expected to benefit first.
The company's capacity expansion, new business mass production, the future performance of steady growth can be expected. 1) at present, Wuhan Huapei has reached the scheduled state of use in July 2019, and its production capacity has reached 7 million pieces by 2019, including 6.5 million pieces of exhaust valve products, 400000 pieces of VTG products and 100000 pieces of exhaust system products. In the future, with the further climbing of production capacity, the new production capacity will reach 14.5 million pieces, accounting for 66.8% of the existing production capacity in Shanghai and Nantong. 2) since 2019, the VTG project signed with BorgWarner and the exhaust system project signed with Virginia have gradually entered the period of mass production. In addition, the company also has fixed-point gains in new energy, braking systems and other fields. Sufficient production capacity and new orders will provide a strong driving force for the company's performance growth.
Investment advice. As the global leader of turbocharger accessories, the company has high quality customers and sound operation. In the future, with the resumption of the company's Wuhan investment project and the gradual mass production of the company's VTG, exhaust system and other new business, the growth momentum is sufficient. It is estimated that the company's net profit from 2020 to 2022 will be 0.77,1.04,127 million yuan respectively, corresponding to 50.8,37.5,30.8 times of PE. It will cover for the first time and be rated as "overweight".
Risk hints: industry sales may be affected by the epidemic or fall short of expectations; the company's new project mass production schedule may fall short of expectations; fund-raising projects may fall short of expectations.
