Key points of investment
Next Friday (August 25), a company listed on the Main Board, “Regway Shares” made an inquiry.
Rewei Co., Ltd. (603075): The company is deeply involved in the field of electric heating components, and downstream covers scenarios such as civilian appliances, commercial appliances, industrial equipment, and new energy vehicles. The company achieved revenue of 1,456 million yuan/1,802 billion yuan/1,687 million yuan respectively in 2020-2022, YOY was 8.91%/23.83%/-6.41%, with a compound annual growth rate of 8.07% of three-year operating income; achieved net profit of 114 million yuan/232 million yuan/242 million yuan, YOY was in that order of -33.88%/102.71%/4.30%, and a compound annual increase of 11.82% in three-year net profit. In the latest reporting period, from January to June 2023, the company achieved operating income of 824 million yuan, an increase of 1.75% over the previous year, and realized net profit of 118 million yuan, an increase of 15.58% over the previous year. According to preliminary forecasts, the company is expected to achieve net profit of 200-220 million yuan from January to September 2023, a change of 19.82%-31.81% over the same period last year.
Investment highlights: 1. The company has outstanding scale advantages in the field of heating components for civilian appliances, and the production of electric heating components ranks among the top three in the world. The company has 4 manufacturing bases in China and 1 base in Thailand, and provides nearly 100 million electric heating products to the market every year. It has now established a scale advantage in the field of electric heating components for residential appliances. The production of electric heating components in 2019-2021 ranked in the top three in the global electric heating element production share, with a global market share of 5.83% in 2021. The company's products are cost-effective, and are widely used downstream in various fields of kitchen appliances, clothing care appliances, bathroom appliances and HVAC appliances. After a long period of intense cultivation, the company has accumulated a large number of high-quality customers in the electric heating field, including well-known domestic and foreign electrical appliances companies such as Midea, Samsung, Haier, Delong, Archilic, Panasonic, Bosch, Electrolux, Vaillant, and Whirlpool. 2. The expansion of electric heating element technology into the field of heat management for new energy vehicles is expected to contribute to the company's new growth. Under the trend of electrification, the value of automobile thermal management systems and bicycles is gradually increasing, and the market prospects for thermal management systems for new energy vehicles are broad. The company is gradually expanding the application field of thick film electric heating elements to high-pressure liquid heaters for heat management systems for new energy vehicles. The revenue of electric heating components for new energy vehicles is growing rapidly, from 289,500 yuan in 2020 to 606294 million yuan in 2022. Currently, the capacity utilization rate is full (188.05% in 2022).
The company has established a good relationship with BorgWarner, a world-renowned auto parts supplier, with smooth batch delivery, and has entered the supply chain of first-tier major automakers such as BMW, Daimler, Volkswagen, and Geely through it.
Comparison of listed companies in the same industry: Considering business and product types, Dongfang Electric and Sanhua Intelligent Control were selected as comparable listed companies of Rewei Co., Ltd.; judging from the comparable companies mentioned above, the average revenue scale in 2022 was 12.583 billion yuan, and gross sales margin was 23.12%; comparable PE-TTM (arithmetic average) was 31.78X; in comparison, the company's revenue scale was lower than the average of comparable companies in the industry, and the gross margin was higher than the average of comparable companies in the industry.
Risk warning: There is still a possibility that companies that have begun the inquiry process will not be able to go public due to special reasons; company content is mainly based on the content of prospectus and other public information; there is a risk that the selection of listed companies in the same industry is not accurate enough; there may be interpretation deviations in the selection of content data. The specific risks of listed companies are shown in the text.