occurrences
On December 20, 2023, the company announced that its wholly-owned subsidiary Dechang Technology received Nexteer North America's designated notice for the EPS motor project. According to the customer plan, the life cycle of the fixed-point project is 10 years, and the total sales volume over the life cycle is estimated to be about US$143 million, and mass production will gradually begin in May 2025.
It once again broke through leading automotive systems manufacturers. The second curve continued to expand. Since 2021, the company's automotive EPS motors have now been selected by major customers such as ZF, Jetstar, Tongyu Technology, and Shanghai LiKrypton. This has once again won the designation of Nexteer (North American) EPS motors, further verifying the competitiveness of the product. As of 2023H1, some of H1's one-box wire-controlled motor projects have been successfully mass-produced, and the EMB electromechanical braking project A prototype has been developed and passed vehicle verification by OEMs, which can meet the application requirements of L3 and above autonomous driving scenarios. It is expected that the future will further leverage vehicle side growth through technical advantages. Since 2022, the company has announced a total of 9 designated projects for major customers, contributing a total revenue of about 2.82 billion yuan throughout the life cycle.
Household appliances have grown steadily as a whole, and robots have built a third growth curve, and the marginal repair trend of the vacuum cleaner business is clear; diversified small household appliances expand category+expand customers, from early single strong TTI binding to strategic cooperation with HOT and SHARK, and the category has expanded from a single floor cleaning to hair care and electric/outdoor tools. New projects in collaboration with Shark are expected to gradually be implemented to promote the steady growth of the company's home appliance business as a whole. In addition, in October 2023, the company and 5 other companies including Yubi Chuan jointly established the National Innovation Center for Humanoid Robots. It already has technical reserves related to torque motors. It is expected that domestic production will replace high-end overseas motors and build a third growth curve for the company.
Investment suggestions: The growth path is clear, covering the first time, giving “buy” rated home appliances to grow steadily, zero steam is resilient, and the company can grow safely in the short to medium term under two-wheel drive; the robotics business further opens up room for growth. It is expected to achieve revenue of 29.0, 34.4, and 3.97 billion yuan in 2023-2025, up 49.8%, 18.3%, and 15.4% year-on-year, and achieve net profit of 3.5, 4.0, and 470 million yuan, and 16.7%, 15.0%, and 17.8% year-on-year increases. First coverage, giving a “buy” rating.
Risk warning
The expansion of the automotive business fell short of expectations, the cost of raw materials increased dramatically, and macro-demand fell short of expectations.