Key points of investment
Joyson Electronics increased its holdings of Xiangshan shares by a total of 6.6037 million shares through bulk transactions. On December 16, 2023, Joyson Electronics increased its holdings of Xiangshan shares by a total of 6.6037 million shares through bulk transactions, accounting for about 5% of the total share capital of listed companies. Prior to this change in equity, Joyson Electronics held 10.60 million shares of the company, accounting for 8.03% of the company's total share capital. After this change in equity, Joyson Electronics held 17.2037 million shares of the company, accounting for 13.03% of the company's total share capital.
In the past six months, Joyson Electronics has taken two steps to increase its holdings in Xiangshan
On July 17, 2023, some of the company's shareholders, Mr. Cheng Tiesheng, Deng Jiehe, Ms. Gao Lufeng, and their co-actors signed a “Share Transfer Agreement” with Joyson Electronics. The total company shares held by them were transferred to Joyson Electronics through an agreement transfer. The transfer price was RMB 31.00 per share, and the total transfer price was RMB 329 million. The share transfer was registered on August 14, 2023. As of December 14, 2023, Joyson Electronics is the company's second largest shareholder.
The company's revenue is growing rapidly, and the performance of the new energy strategy transformation is strong. The company's main business includes auto parts business and weighing equipment business. In 2022, it achieved revenue of about 4.8 billion yuan and deducted non-profit of about 156 million yuan. About 85% of the business revenue comes from the auto parts business. The products include intelligent charging stations and in-vehicle charging and distribution products in the fields of air management systems, luxury smart accessories, and new energy charging and distribution systems. In the first three quarters of 2023, the company achieved revenue of 4.149 billion yuan, +22.28% year-on-year, net profit of 141 million yuan, +62.11% year-on-year, and net profit of 146 million yuan after deducting non-net profit of 156 million yuan, +62.74% year-on-year. In recent years, the company has accelerated the transformation of its new energy strategy. By the end of 2022, the total life cycle order amount of the company's new energy business was nearly 15 billion yuan, growing strongly, and it has plans to expand the production capacity of its overseas factories (such as Mexico) to support the rapid development of new energy and related products overseas business, injecting new momentum into its future development.
The dual main line of luxury interior+new energy has strong certainty. We believe that the company has a dual main line of luxury interiors and new energy, and the driving force for continuous growth is strong. Specifically, 1) Traditional customer stability is strong. Traditional customers of the company's interior parts expect global vehicle sales to increase by about 7.2%, and brand recognition is high globally. 2) New customers in the interior business are gradually expanding, and the company provides air management systems for new car companies such as NIO and Ideal. With the upgrading of domestic brands, the company's share of domestic interior customers is expected to further increase. 3) There have been two breakthroughs in new energy going overseas, and the number of customers supporting charging piles and charging and distribution business for domestic OEMs has increased. The CE certification for TUV European charging piles going overseas and the UL certification for CSA American standard charging piles have been passed one after another, which is expected to help the company open up the overseas charging pile market.
Profit forecasting and valuation
The company's revenue for 2023-2025 is estimated to be 57.18, 75.39, and 8.718 billion yuan, and net profit of 1.99, 2.67, and 349 million yuan, corresponding to current PE 23.25, 17.30, and 13.24 times, maintaining the “buy” rating.
Risk warning
There is a risk that the sales volume of traditional OEMs will decline, and the risk that the development of the new energy business will fall short of expectations.