A comprehensive solution provider for aluminum die-casting, with a dual focus on communications & automobiles, rapidly increased in scale in 18-22. Established in 2001, it has gone through two important strategic transformations and layout to form a dual automotive & communication die-casting business. Over 20 years, it has developed into a comprehensive aluminum die-casting solution provider with the capabilities of the entire industry chain. It can provide customers with complete integrated services from simultaneous design and development to assembly and inspection. It is a supplier to OEMs such as Tesla & BYD and major communication equipment vendors such as Ericsson & Huawei. The company's revenue continued to grow rapidly in 2018-2022, with revenue of about 30% CAGR.

Overall perception: Drastic transformation, strong customer capabilities, forward-looking technical layout 1) The transformation was drastic, fast, ruthless, and accurate: actively adjusted the business structure to enter passenger cars in the early stages of establishment and entered the joint venture with a military warrant; in 2005, they seized Ericsson's opportunity to find suppliers in China and entered the communications field.

2) Strong ability to dig deep into customers: Ericsson from millions to 1 billion, Huawei from telecommunications to cars, Tesla from overseas to domestic

3) Deeply cultivate the industrial chain+maintain high R&D to form one-stop capabilities and technology layout prospects

Automobile business: Accelerating the transformation of new energy sources, categories & customers driving sharp price increases: from electric drive systems to battery systems, integrated die-cast body & battery case category expansion to achieve increased bicycle value: ① Supporting leading domestic and foreign forces (BYD, Tesla) and simultaneously expanding other new energy customers; ② Proven customers have the potential to dig deep into Tesla's internal market share, globalization, and platformization; ③ The new business layout penetrates the early integrated die-casting field.

Communications business: 5G switching & customer expansion & globalization are driving increased volume. The current penetration rate of 5G is only 21.3%. At the end of 2022, the number of 5G base stations in China was only 2,312 million. At the end of 2022, the number of 5G base stations in China was only 2,312 million, and 5G acer stations needed at least 8.85 million stations, and there is still plenty of room for growth. The company's current customers in the communications field are Huawei and Ericsson, the world's top two main equipment companies. Overseas plant construction plans are expected to further increase the supporting share of existing customers and expand new customers simultaneously.

The company is leading the industry in the field of die-casting parts for 5G base stations and is expected to seize more growth.

Profit forecast: Revenue of 2022-2024 is expected to be 3.17 billion yuan, 4.06 billion yuan and 4.87 billion yuan, with year-on-year growth rates of 39%, 28%, and 20% respectively, and net profit of the mother's net profit of 220 million, 280 million yuan, and 399 million yuan, with year-on-year growth rates of 126%, 27% and 35% respectively. PE corresponding to 22-24 was 26X, 21X, and 15X respectively. It was covered for the first time and gave a “buy” rating.

Risk warning: New energy sales fall short of expectations, new customer development falls short of expectations, new business progress falls short of expectations, raw materials have risen sharply, public information used in research reports may be delayed or not updated in a timely manner, etc.