Incident Overview: On May 16, 2023, the company's subsidiary Beijing Tuxun Fengda Information Technology Co., Ltd. received targeted notifications from FAW Toyota Motor Co., Ltd. and GAC Toyota Motor Co., Ltd. Tuxun Fengda will provide maps, navigation products and customized development services for some models mass-produced and marketed by FAW Toyota and GAC Toyota starting 2024. The specific sales volume and sales amount depends on the sales volume of models with relevant functions that are mass-produced and marketed by FAW Toyota and GAC Toyota.
Zhiyun's business continues to advance, and receiving large orders reflects the company's strength. The company received targeted notifications from FAW Toyota and GAC Toyota this time, which fully demonstrated the company's core competitiveness in the fields of maps and navigation. The company uses a closed loop of “chip+data+algorithm” to create leading high-precision maps. The high-precision maps have successively been targeted by important strategic customers such as BMW, FAW Hongqi, and Great Wall. Multiple projects have entered the mass production period, effectively supporting the implementation of L2+ advanced driving assistance functions and the demand for autonomous driving functions above L3. At the same time, the company actively expanded human-robot co-driving products, achieved mass production at SAIC Roewe, and obtained the designation of companies such as Dongfeng Passenger Vehicle. As can be seen, receiving orders from FAW Toyota and GAC Toyota this time is another reflection of the company's strength. According to Hexun.com data, Toyota sold 1,9406 million vehicles in the Chinese market in 2022, and the implementation of this cooperation will also bring benefits to the company's map navigation business. As a result, the company is leading the map to create “autonomous driving on a map”, and the map has become one of the important cores of the company's autonomous driving layout; at the same time, it has cooperated with dozens of car manufacturers and suppliers, including Ford, to provide compliance plans for the entire process, from prototypes to mass-produced vehicles.
Smart driving, smart chip, and smart warehouse are making concerted efforts, and there are long-term development prospects in the era of intelligent driving. 1) Smart driving:
In 2022, the company successively won cooperation orders for L2 class intelligent driver assistance system software and hardware integrated solutions for L2 intelligent driver assistance systems for some models from a leading domestic NEV company B, and an L2 intelligent driver assistance system software and hardware solution. In 2022, smart driving software and hardware integrated products signed mass production orders and shipped them out one after another. The smart driving business achieved revenue of 130 million yuan, revenue increased 20 times over the previous year, and the company's important strategic transformation achieved significant success. 2) Zhixin: SoC chip sales remained number one in the rearview market in 2022, and automotive-grade MCU chips continued to break through. The cumulative shipment volume has exceeded 30 million units. The products cover mainstream domestic and foreign automakers and Tier 1 suppliers. The sales volume of MCU chips remained number one among domestic 32-bit automotive MCUs, and the growth rate of Zhixin's business reached 43% in 2022. 3) Smart Cabin: Passenger car networks have received orders from many car manufacturers, and commercial vehicle networks continue to cooperate with China FAW, Dongfeng, Sinotruk and other companies. The execution of the Toyota order this time will also help expand the company's smart cabin business.
Investment advice: The company's high-precision maps, compliance, autonomous driving and other businesses are at a critical stage of development. The order landing further highlights the company's own strength and is optimistic about the company's long-term development prospects. The company's net profit for 2023-2025 is estimated to be 0.51/241/485 million yuan respectively. The corresponding PE is 527X, 110X, and 55X respectively. The company has an important card advantage in the field of autonomous driving. Important orders continue to be placed, short-term fluctuations do not change long-term expectations, and maintain the “recommended” rating.
Risk warning: There is uncertainty about changes in industry sentiment; the new technology research and development process falls short of expectations.