Event comment
On October 20, 2023, the company issued an announcement on the voluntary disclosure of customer development notifications. Lingdian Electric Control recently received a "notice on the Development of spare parts" from the engine Power Research Institute of Anhui Jianghuai Automobile Group Co., Ltd. According to the contents of the document, the spare parts assembly scheme provided by the company has been tested and verified that its performance meets the project requirements and informs the company to accelerate the relevant work of mass production product development.
Jianghuai / Guangzhou Automobile Development notice, technical strength and product quality have been recognized to further develop the Zengji electric vehicle market. From 2023 to October 23, the company's incremental motor controller (MCU) received a development notice from the Power Research Institute of the engine Branch of Anhui Jianghuai Automobile Group Co., Ltd. and the Automotive Engineering Research Institute of Guangzhou Automobile Group Co., Ltd., indicating that the relevant projects have passed the testing and verification stage and entered the stage of mass production, and the company's technical strength and product quality have been affirmed by customers. Further improve the market competitiveness of the company. Customers hand over the added program motor controller to our company for development, which is of exemplary significance in the industry and plays a positive role in promoting the company's transformation to electrification and opening up new customers.
The logic of volume and price rise of add-on electric vehicle products is highlighted. (1) quantity: the sales volume of new energy vehicles in China reached 6.887 million in 2022. Under the policy support and market demand, more and more car companies begin to develop incremental electric vehicles, the production technology tends to mature, and the product advantages gradually appear. Sales of add-on electric vehicles are growing, successfully exceeding 100000 in 2021 and doubling again to more than 250000 in 2022, an increase of about 1.3 times over the same period last year, accounting for an increasing share of total sales of new energy vehicles, accounting for 3.6 per cent in 2022. From January to September 2023, sales of mixed models reached 1.807 million, up 83 per cent from a year earlier, while sales of pure electric models totaled 4.468 million from January to September, a year-on-year growth of only 24.9 per cent, according to the China Automobile Association. According to the statistics of the Federation of passengers, by August 2023, domestic car companies have launched a total of 23 new plug-in cars (including add-on programs), which are much faster than ordinary hybrid models and are almost the same as new fuel cars. (2) Price: the whole vehicle control system of incremental electric vehicle is mainly composed of incremental range engine control unit (EMS), generator control unit (GCU), drive motor control unit (MCU), power battery management unit (BMS), vehicle control unit with augmented range coordinated control (VCU) and CAN/CANFD network communication system. According to the company's prospectus, the ratio of engine or car to EMS is 1:1. The ratio relationship between hybrid electric vehicle and EMS, VCU is 1:1, and according to the number of motors used, the ratio relationship between pure electric vehicle or hybrid vehicle and MCU is 1:1 or 1:2. Therefore, compared with traditional automotive products, the total value of the company's incremental electric vehicle products is expected to increase.
Investment advice: we maintain the original forecast that the company's operating income from 2023 to 2025 is expected to be RMB 9.24 12.24, with a growth rate of 29.8%, 32.5% and 43.8%, respectively, and its home net profit is RMB 0.85, 1.59 and 350 million, respectively, with a growth rate of 27.1%, 87.1% and 91.1%, respectively, and the corresponding PE is 48.9pm, 26.1 and 13.7 respectively. Considering the scarcity of Lingdian electronic control in the domestic engine management system market, with the continuous deepening of the development strategy of the company's customers' transformation to passenger cars and product electrification transformation, the company's engine management system is expected to usher in a simultaneous rise in volume and price. superimposed on the future of the company's fuel injector production line and vehicle networking business is expected to become the company's second growth pole, laying a solid foundation for the company's sustained growth, maintaining and buying-A.
Risk tips: the risk of decline in industry profitability caused by the downward price of products; the risk of lack of supporting system of core components; macro-environmental risk.