Key points of investment
Next Wednesday (March 6), a new stock “Xing Desheng” will ask for a quote on the main board.
Xing Desheng (603344.SH): The company is mainly engaged in R&D, production and sales of micro motors and related products. The products are mainly used in the field of cleaning appliances represented by vacuum cleaners. In 2021-2023, the company achieved revenue of 2,311 billion yuan/1,808 billion yuan/2,057 billion yuan respectively; YOY was 39.91%/-21.77%/13.76%, and the three-year compound annual growth rate of revenue was 7.58%; net profit to mother was 172 million yuan/187 million yuan/198 million yuan, YOY was 24.43%/8.24%/6.07%, and the three-year compound annual growth rate of net profit to mother was 12.62%. According to the company's management's preliminary forecast, the company is expected to achieve operating income of 370 million yuan to 420 million yuan in 2024Q1, a change of 2.48% to 16.33% over the same period of the previous year; net profit attributable to owners of the parent company was 33 million yuan to 38 million yuan, a change of 5.31% to 21.27% over the same period last year.
Investment highlights: 1. The company is a global core enterprise in the field of micro and special motors for vacuum cleaners, leading market share and obvious scale advantages. The company entered the field of micro motors in 2004 and is one of the first domestic enterprises to enter professional vacuum cleaner micro motors. After nearly 20 years of hard work, we have accumulated a stable core customer base in the field of clean appliances represented by vacuum cleaners. The products are widely used in well-known domestic and foreign terminal brands such as Bisheng, Shark, Chuangke Group, Electrolux, Patek, Panasonic, Hitachi, Philips, LG, Midea, Delmar, Covos, Xiaomi, and Stone Technology. According to estimates in the prospectus, the company's household vacuum cleaner main suction motors accounted for 27.01% of global sales in 2022, and the scale advantage was obvious. 2. The company has proactively deployed DC brushless motors for new household cleaning appliances with higher added value; micro motors are showing a brushless development trend, and the company plans to strengthen expansion in emerging fields and expand production capacity through fund-raising projects.
Compared with traditional motors, DC brushless motors have the advantages of high efficiency, noise and low maintenance costs, and have gradually become mainstream as downstream requirements for energy saving and low noise increase. On the one hand, the company proactively laid out DC brushless motors for new household cleaning appliances in 2015, and acquired Xingdesheng New Energy in 2018 to expand the battery pack business. Currently, the “three in one” layout for DC brushless motors is basically formed; during the reporting period, the price of the company's DC brushless motors was about twice that of traditional motors, and the gross margin was about 10 percentage points higher than traditional motors. As downstream demand for brushless motors increases, the proportion of the company's DC brushless motor products may increase, helping to increase its contribution to profitability. On the other hand, with the technical experience and cost advantages accumulated in the past in the field of DC brushless motors for vacuum cleaners, the company established an automotive motor and industrial fan division in 2022 to enter the corresponding market. At the same time, according to the prospectus, the company plans to gradually expand into other application fields such as personal care motors and robot motor drive systems on the basis of consolidating existing fields. In line with the development of the company's brushless DC motor business, the company plans to add 30 million brushless motors and control systems and 5 million battery packs through a fund-raising project.
Comparison of listed companies in the same industry: The company is mainly engaged in R&D, production and sales of micro motors and related products, and selected Jiangsu Raleigh, Collier, Lake Electric, and Xiangming Intelligence as comparable companies for Star Desheng.
Looking at the comparable companies mentioned above, the average revenue scale (TTM) of the industry is 3.196 billion yuan, the comparable PE-TTM (excluding extreme value/arithmetic average) is 25.95X, and the gross sales margin is 24.15%; in comparison, the company's revenue scale and gross sales margin are lower than the average of comparable companies in the industry.
Risk warning: There is still a possibility that companies that have begun the inquiry process will not be able to go public due to special reasons; company content is mainly based on the content of prospectus and other public information; there is a risk that the selection of listed companies in the same industry is not accurate enough; there may be interpretation deviations in the selection of content data. The specific risks of listed companies are shown in the text.