Leading domestic fuse companies have an advantage in new energy vehicles & wind storage. The company is the largest manufacturer of fuses in China, and has an advantage in high-end markets such as new energy vehicles, wind and solar storage, and telecommunications. In terms of market share: In 2019, the company's share of the domestic NEV fuse market was about 55%, and the global NEV power fuse market share was 20% +; the domestic market share for wind and solar storage was 15% +, and the global market share was about 5%. Covering downstream customers: ① Automakers: At present, domestic customers have basically covered major domestic brands of passenger cars and commercial vehicles. International customers have supplied Tesla, Daimler, Volvo, SAIC Volkswagen, SAIC-GM, etc. in batches.
② Scenery Storage & Communications: Major customers include industry leaders such as Sunshine Power, Ningde Times, and Huawei.
High-voltage fast charging brings demand for active protection, and the company's high-value products are expected to be released. In order to solve mileage anxiety and energy efficiency, high-voltage fast charging has become a mainstream trend, and various car companies have released 800V high-voltage platforms one after another, and high-voltage fast charging requires incentives for fuses to actively protect before failure occurs. The average price of excitation fuses is 80-100 yuan, which is 3-4 times the average price of traditional power fuses. The company's incentive fuse products are expected to benefit from the rapid increase in the penetration rate of high-voltage fast charging models, and high-value products are expected to rise in volume. We expect the new energy vehicle fuse market to reach 3.891 billion yuan in 2025, and the 2023E-2025E CAGR will be 20.10%.
It has successively won large orders from overseas, and the overseas layout has been steadily developed. In August 2023, the company announced the establishment of wholly-owned subsidiaries in Singapore and subsidiary companies in Thailand and the United States to further expand overseas markets.
In October, the company announced a world-exclusive order for high-voltage products (1000VDC) and B-type orders for low-voltage products (70VDC) for a project of a leading German car company. The contract amount is expected to fluctuate between 900 and 1.2 billion yuan, and SOP is expected to begin in May 2025. The company has broad scope for overseas development, and overseas revenue is growing steadily.
Investment advice: We expect the company to achieve operating income of 1,099/15.31/2.015 billion yuan and net profit to mother of 2.25/3.28/440 million yuan in 2023-2025. The corresponding PE was 39.96/27.37/20.44 times, respectively. It was covered for the first time, and a “gain” rating was given.
Risk warning: increased industry competition, new energy vehicle industry policy changes, excessive customer concentration