Investment logic
Leading cold forging, a scarce target with high net interest rates. The company specializes in cold-forging auto parts, and can continue to maintain a net profit margin of more than 30% through accumulated technical experience. Mainly through 1.
Equipment improvements and updates, increased processing speed, and high utilization rate; 2. High material utilization rate; 3. The chairman's technical background has accumulated raw materials, equipment, molds, and processes throughout the processing and manufacturing industry chain, and many of them are innovative with patentable patents, so they have strong cost and quality advantages.
The increase in performance in 2024 is for battery terminals, and the lead screw is expected to expand in '25, and the low cost advantage opens up room for growth. According to the company's 2022 annual report and 2023 semi-annual report, the company is expanding cold forging technology in various automotive precision parts projects such as body stabilization systems, automotive electric drive transmission systems, and battery power system shells. Combined with the company's process accumulation and industrial chain adaptability, we expect the battery power system shell here to refer to the battery negative terminal. We expect shipments to reach 240 million tablets in 2024, corresponding to revenue of around 140 million yuan. Driven by new products such as battery terminals and automotive screws, it will open up room for growth as production capacity is gradually released.
The accuracy of cold-forged screws is C5 and can be improved. The company's cold-forged automobile screw products have already been molded. Humanoid robots are entering a stage of rapid iteration in technology and cost. Compared with the “turning and milling+grinding” process, the “cold forging+grinding” process has high efficiency and low cost characteristics. The accuracy of cold forging can reach C5 level. The use of superimposed grinding machines can stably process qualified humanoid robot roller screws. It is a suitable method for mass production of roller screws with high efficiency. The company covers technology research and development in the entire industrial chain of materials, molds, equipment, and products, and is expected to enter the industrial chain with greater cost and technical advantages when robots are deployed.
Profit forecasts, valuations, and ratings
The company's net profit due to mother in 2023-2025 is estimated to be 1.772/2.24/ 264 million yuan, respectively, and the corresponding PE is 16.5/12.7/10.7 times, respectively. Comparable to the 2023-2025 PE, the 2023-2025 PE was 19.8/15.2/11.5 times, respectively. Considering that the company is a leader in cold forging parts, with a net margin of more than 30%, and a robotic cold-forged screw option, the 2023-2025 CAGR was 24.1%, so the company was given 16 times PE in 2024, with a target price of 26.48 yuan for the first time, and a “buy” rating.
Risk warning
Downstream sales fall short of the expected risk, the expansion of new projects falls short of the expected risk, the risk of uncertain technology routes, the risk of humanoid robots falling short of expectations, the risk of executive holdings reduction, and the risk of exchange rate fluctuations.