The world's leading intelligent manufacturing system service provider. The company's predecessor was founded in 1993. In 2021, it was restructured and acquired Paslin in the United States, and the main business was transformed into industrial automation system integration. After the overall divestment of the real estate business, it fully focused on intelligent manufacturing. The company focuses on automated automotive welding production lines and continues to expand automation projects in the non-automotive industry. Currently, customers include many internationally renowned automakers and tier-1 component suppliers in the automotive sector, as well as warehousing automation customers such as internationally renowned retail companies in the non-automotive sector, which have high customer barriers. 86% of the company's revenue in 2022 came from the North American market; it has manufacturing bases and R&D centers in Detroit, Changchun, Shanghai, Chengdu, and Saltillo, Mexico; the core team has rich industry experience and a high proportion of technicians.
The US NEV market under the Inflation Reduction Act's subsidy policy: 1) The Biden administration's inflation reduction bill was passed in August '22, providing important fiscal incentives for the NEV sector and speeding up the adoption of electric vehicles in the US by providing tax incentives. 2) The US NEV sales CAGR is expected to reach 42% in 2024-2026, and the penetration rate is expected to reach 25% in 2026. 3) The penetration rate of the US NEV market increased from 2.2% in 2020 to 9.1% in 2023. Mainly due to the low production capacity of car companies and the lack of basic equipment such as charging stations, the market penetration rate is growing slowly. By the end of 2022, there were a total of 128,000 charging stations for new energy vehicles in the US, and the US plans to invest 5 billion dollars to improve charging facilities, with the goal of completing the construction of 500,000 charging stations by 2026. At the same time, automobile manufacturers such as Ford and GM are currently implementing production expansion plans. Among them, Ford's Ohio plant is expected to be put into use in 2025, and these factors are expected to improve in the long run.
Leading welding technology, strong competitiveness in the NEV equipment market, expanding non-automotive businesses, and promising results.
1) The automobile manufacturing industry is one of the largest application fields for industrial automation integration. The company is deeply involved in the industrial robot system integration industry, leading the world in technical levels such as automotive structural parts welding, robot connections, and white body welding for new energy vehicles. 2) The company has successively completed the design and construction of their first electric vehicle production lines for Tesla and Rivian, and is actively cooperating with strategic customers such as Ford, GM, and Toyota in the welding manufacturing of new energy vehicles.
3) The company actively applies its expertise and technology in the field of automobile manufacturing to non-automotive industries such as warehousing and logistics, new energy, environmental protection equipment, etc., and has launched a series of innovative automation solutions including automated three-dimensional warehouses and intelligent material handling systems. 4) The company's net profit for the first three quarters of 2023 was 119 million yuan, with a year-on-year growth rate of +216.16%; a stock incentive plan was announced in 2023, binding executives and core cadres. According to the performance assessment target, the company's net profit for 2023-2026 should not be less than RMB 2.1/2.5/30/360 million yuan.
Investment advice: Considering the continued boom in the US NEV industry, combined with the Biden administration's administration goals and Marklines forecasts, the US NEV sales CAGR is expected to be 42% in 2024-2026. Furthermore, the company is actively expanding businesses such as intelligent logistics and speeding up cooperation with Chinese car companies. Therefore, the company's net profit for 2023-2025 is estimated to be RMB 211/2.82/360 million, respectively, corresponding PE of 15/11/9 times.
Covered for the first time, with a “recommended” rating.
Risk warning: Continuity of the US NEV subsidy policy; the US government's trade policy; new business development falls short of expectations