The company is the global leader of automobile cleaning pump, and its main business is automobile cleaning system and vehicle micro-motor. Under the trend of electric intelligence of automobile, the bicycle value of automobile cleaning system and vehicle micro-motor is increasing, which provides a new driving force for the industry. The company has been ploughing the micro-motor industry for many years and has established a stable supply relationship with downstream customers, and is optimistic about the further increase in the company's global share and the growth of bicycle matching value under the release of production capacity. as well as the improvement of profitability brought about by new technologies to reduce costs and increase efficiency and self-produced raw materials. We predict that the company's 2023Universe 2024Universe net profit in 2025 will be 2460.294 million yuan, giving the company 36 times PE in 2023, corresponding to the target price of 92 yuan, and giving it a "buy" rating for the first time.
Car micro-motor started, car cleaning system invisible champion. The company's predecessor, Hengshuai Micro Motor Factory, was established in 2001. At the beginning of its establishment, it focused on all kinds of automotive micromotors, and then gradually expanded from motors to downstream cleaning pumps and cleaning system products, and now it has grown into a global leader in automotive cleaning pumps. In 2022, the company's operating income was 341 million / 584 million / 739 million yuan, respectively, compared with the same period last year. The net profit of the company was 66 million / 116 million / 146 million yuan, and + 2%, 74%, 26%, respectively. Cleaning and micro motor are the company's two core businesses, accounting for 54% and 37% of revenue respectively in mid-2022. Through the Tier1 and Tier2 model, it supplies to BMW, Mercedes-Benz, North American new energy customers, ideal, Guangzhou Auto, Geely and other well-known car companies at home and abroad.
Cleaning business: the intelligent trend brings incremental demand, optimistic about the company's global share expansion and the release of new products.
The main products of the company's cleaning business are cleaning pump and cleaning system, which are supplied to international and domestic customers in Tier 2 and Tier 1 mode respectively. The traditional cleaning system mainly includes windscreen cleaning system and headlamp cleaning system, and the value of the bike is about 60 yuan. With the improvement of automobile intelligence and the evolution of ADAS grade from L2 to L4, there are higher requirements for the data quality and reliability of camera and lidar, which gives birth to a new demand for sensor cleaning system. The value of ADAS cleaning system per car is expected to reach more than 1000 yuan per car. The main points of the company's cleaning business are: 1) the company jointly develops the ADAS cleaning system with large international auto parts manufacturers, and with the listing of ADAS cleaning system products, the company is expected to enjoy the intelligent incremental demand market; 2) in the domestic market, with the rise of independent brands, the company supplies a complete set of cleaning systems to automobile companies as a Tier 1 supply, and the supporting value is expected to increase exponentially. 3) prospectively set up factories in the United States and Thailand, and the overseas market share is expected to continue to increase.
Micro-motor business: category expansion under the trend of electrification, new technology, raw material layout to enhance the cost advantage. Micromotors are widely used in automobiles. With the improvement of electrification and intelligence of automobiles, the category of automotive micromotors extends from the earliest starting motors to wipers, windows, seats, steering assistance, brake assistance and other links. The number of automotive micromotors is gradually increasing. Compared with fuel vehicles, new energy vehicles are more intelligent, the price of intelligent configuration goes down, and there is a greater demand for micromotors. The electrification of "four doors and two covers" is one of the new increments of automotive micromotors in the future. The company started as an automotive micro-motor, in the field of automotive micro-motor for many years, downstream bound to Stepiros and other Tier 1 international customers, enjoy the industry growth under the expansion of micro-motor categories; in addition, the company self-developed harmonic magnetic field motor new bottom technology, and supporting self-produced motor core magnetic materials, motor products are expected to reduce cost and increase efficiency.
Risk factors: automobile consumption is not as expected; the trend of automobile electrification and intelligence is not as expected; the progress of product research and development of downstream customers is not as expected; the cost of raw materials is rising; the progress of overseas factory construction is not as expected.
Profit forecast, valuation and rating: the company has been deeply engaged in the micro-motor industry for many years, has established a stable supply relationship with downstream customers, and is optimistic about the further increase in the company's global share under the release of production capacity and the growth under the increase in the value of bicycle accessories, as well as the improvement of profitability brought about by new technologies to reduce costs and increase efficiency and self-produced raw materials. We predict that the net profit of 2023, 2024, and 2025 will be 246, 244 million yuan, corresponding to 29-24-20 PE, and select the shares of auto parts, micro-motor industry company Sanhua Intelligence Control, Top Group, Best, Jiangsu Raleigh and Buke as comparable companies. The average PE multiple of the comparable company in 2023 is 36 times. We give the company 36 times PE in 2023, corresponding to the target price of 92 yuan, covering for the first time. Give a "buy" rating.