Having been deeply involved in automotive interiors for more than 20 years, the roof assembly business has further opened up room for growth. Daimei Co., Ltd. has been deeply involved in the automotive interior parts field for more than 20 years. In 2022, the company's sunshield business had the highest market share in the world. The company has high-quality customer resources, including well-known automakers such as Bentley, Mercedes-Benz, and Audi. In recent years, the company has actively deployed new energy customers and has successively entered the supplier system of new domestic and foreign car companies with high growth potential, such as Tesla, Rivian, Ideal, NIO, and Xiaopeng.
The market share of the sun visor business is leading in the world, and the market share of the headrest business is rising steadily. The company's global market share of the sun visor business reached 45.88% in 2022, and its market share increased steadily year by year. The market position in this market segment ranked first in the world, with a strong competitive advantage. In 2018, the company completed the acquisition of the car sun visor business and assets owned by Motus, expanded the coverage of the company's customer system, and added European and American luxury brands and Japanese brand car enterprise customers. The company has established a strong customer relationship network in the field of sun visors, providing a unique advantage for expanding the headrest business. The global market share of the company's headrest products was 4.34% in 2022.
The roof assembly business increases the value of bicycles and opens up new room for growth. The company issued 908 million yuan of convertible bonds in 2023 for projects such as the Mexican automotive interior parts industry base construction project and the construction of 700,000 sets of roof products with an annual output of 700,000 sets. It mainly produces automotive roof system integrated products and automotive roof products. Among them, automotive roof system integrated products are mainly used in new energy vehicles. The value and relative gross margin of each product is higher than that of interior parts supporting traditional models, which is expected to further enhance the company's overall gross margin level. The company's product integration has been improved, and the transformation from the supply of individual components to the supply of assembly components has been realized.
Profit forecast: With the gradual implementation of production capacity for new products such as the company's roof assembly, the company's performance is expected to reach another level. We expect the company's net profit from 2023-2025 to be 7.6/9.5/1.18 billion yuan, corresponding to EPS of 0.60/0.75/0.93 yuan, and corresponding to the current stock price PE of 25.2, 20.2, and 16.3 times. First coverage, giving a “buy” rating.
Risk warning: NEV sales volume falls short of expectations, company capacity construction progress falls short of expectations, company project expansion falls short of expectations, etc.