Report summary:
Global leader in the sun visor business. The business focuses on car roof decoration and seat system tracks (including sun visors, headrests, armrests, ceilings and roof systems, etc.), and the traditional main business has maintained steady growth. 1) The company is a global leader in the sun visor industry, accounting for more than 40% of the global car sun visor market, of which the North American sun visor market share accounts for more than 80%, far surpassing other suppliers. The sun visor market concentration is high, and the competitive pressure of Daimei's sun visor business is low, and the overall revenue level also changes with the global car market production and sales situation. In 2022, the company's sun visor business revenue was 3.66 billion yuan, accounting for 71% of the company's total revenue; 2) Headrest and ceiling central controllers are Daimei's other two major business segments. Among them, the headrest business revenue is relatively stable, and the ceiling central controller business has grown rapidly in the past two years. In 2022, the roof central control business revenue was 415 million yuan, up 108% year on year, accounting for 8% of the year's total revenue.
The roof business opens up a new growth curve for Daimei. In recent years, Daimei has gradually expanded its business to ceiling integrated products with higher bicycle value. According to the company's announcement, the value of Daimei's roof bike is about 700 yuan, and the bicycle value of the roof integrated system product is 4,000 yuan. The main players in the roof market include Antolin, IAC, Hexi Industrial, Huayu Automobile, etc. For the North American and domestic roof markets, Daimei raised 908 million yuan in capital through the issuance of convertible bonds to build a Mexican interior industry base project and a domestic Zhoushan roof product project. After completion of construction, it will spread to North America and China to supply high-quality customers such as Tesla, Ford, and GM. Among them, the Mexican project can achieve annual production of 300,000 sets of roof systems and 600,000 sets of roof products after delivery. At present, Daimei has obtained a target of close to 50% of the planned production capacity, and future production can be expected.
Core business growth path: Supporting major customers in North America, relying on partnerships such as sun visors, etc., and entering roof systems to increase bicycle support value. Overseas markets have accounted for more than 80% of Timey's revenue for a long time. In 2018, Dimei entered the North American and European markets through the acquisition of Motus, establishing supporting supply relationships with many automakers around the world. In 2022, Tesla, the world's electric vehicle leader, became the 5th largest customer of Dymax, accounting for 6.8% of revenue. In the future, in conjunction with the construction of a roof system project in Mexico, Daimei is expected to deepen cooperative relationships with North American OEMs such as Tesla, GM, Ford, and Chrysler, enhance bicycle support value, and open up more room for growth.
Profit forecast and rating: The company's net profit for 2023-2025 is estimated to be 745/8.98/1,074 million yuan, corresponding to EPS of 0.59/0.71/0.84 yuan, respectively, and a price-earnings ratio of 27/22/19, respectively. Give a “buy” rating.
Risk warning: downstream customer sales volume falls short of expectations, roof business development falls short of expectations