Deeply involved in the metal processing industry, and the new energy structural parts business is growing rapidly
The company has been deeply involved in the metal processing industry for nearly 20 years. In the early stages, it mainly produced automotive stamping structural parts, and gradually entered high-growth scenarios such as NEV structural parts, battery boxes, and optical storage structural parts after 2019. We expect the NEV structural parts market to grow rapidly (with NEV structural parts and battery boxes growing 22%/19% year-on-year in 24/25). The company maintains deep cooperation with leading downstream customers in various sectors, and is expected to share the industry's growth dividends. We expect the company's net profit to be 4.07/6.12/777 million yuan respectively. Referring to the consistent expectations of the company Wind, the 24-year average PE is 13 times, giving the company 13 times the reasonable PE in 24 years, corresponding to the target price of 44.67 yuan. For the first time, coverage is given, and a “buy” rating is given.
New energy vehicle structural parts: Collaboration with mold business, deep cooperation with GAC Aian and other customers. NEV stamping dies and structural parts are the company's core business. The company has long been deeply involved in the metal processing industry, mastered various metal forming technologies, and the mold business is highly collaborative with the NEV structural parts business.
The company's products include lightweight body structural parts and components, precision parts for heat exchange systems, chassis system components, etc. New energy vehicle sales are growing rapidly, driving the company's structural parts business growth. We expect the domestic NEV stamping structural parts market to maintain rapid growth in 24/25, with a year-on-year increase of 22%/19%. The company has long-term stable cooperation with leading domestic NEV companies such as GAC Aian and BYD, and has maintained good cooperative relationships with world-renowned auto parts companies such as Faurecia, Benteler, Valeo, Mahle, and Yanfeng.
Battery case: Integrated drive product upgrade, and a cooperation agreement was reached with battery leader Ningde Times to reduce the weight of power battery structural components. Among them, the battery case is a key component to achieve weight reduction. Battery integration technology such as CTP has spawned continuous iteration of battery case materials and metal connection methods, and manufacturing process requirements continue to improve. We expect the domestic power battery case market to exceed 80 billion yuan by 2025, with a year-on-year increase of 22%/19% in 24/25. The company has mastered molding processes such as extrusion and stamping, as well as advanced connection processes such as FDS and FSW. The products are recognized by leading domestic battery companies such as Ningde Times, BYD, and Guoxuan Hi-Tech, and the customer resources are excellent; it also signed a cooperation agreement with battery leader Ningde Times to deepen structural parts cooperation in the battery case field.
Optical storage structural parts: The boom in the downstream market is expected to drive rapid growth. The company actively lays out the development and production of products such as photovoltaic inverter structural parts and energy storage cabinets. According to BNEF forecasts, the number of new PV installations worldwide will reach 574 GW in 2024, or +29% over the same period last year. We expect the world's new energy storage capacity to reach 69.27 GW in 2025, and the year-on-year growth rate of new installed capacity in 2024/2025 is expected to reach 36.2%/20.6%. The company covers high-quality customers at home and abroad, such as Huawei, Enphase Energy, and Ningde Times. The growth of the downstream photovoltaic and energy storage market is expected to drive the growth of the company's structural parts business.
Risk warning: Sales of new energy vehicles fell short of expectations, increased competition in the industry led to declining profitability, and fluctuating raw material prices.