A high-quality standard that is deeply involved in the field of micromotors
Based on micromotor technology, the company gradually expanded its products into the field of automobile cleaning and thermal management.
From 2017 to 2022, the company's revenue CAGR was approximately 19.7%.
Micromotors expand application scenarios, and domestic substitution continues to advance
The improvement in automotive functional configurations provides incremental application scenarios for micromotors. We expect a cumulative increase of about 20 micromotors in the fields of intelligent closure, smart cockpit, and braking systems. By 2026, China's automotive micromotor market size will be about 22.9 billion yuan, and the CAGR will be about 12% from 2022 to 2026. We judge that the market share of domestic micromotor companies is expected to increase, and domestic replacement will gradually be achieved: 1) the penetration rate of independent brands will continue to increase, reaching about 56% in 2023; 2) Compared with overseas competitors, domestic micromotor companies have advantages such as cost performance and quick response speed.
ADAS cleaning is gradually becoming the standard for smart driving, and the Blue Ocean market needs to be explored to improve smart driving levels and increase sensor usage. According to KPMG, the number of sensors for L4-L5 level autonomous driving is about 23 to 42. External sensors are easily affected by dust, rain and snow, which interfere with normal operation and clarity, so active sensing cleaning systems may become standard for autonomous driving. Leading OEMs are scrambling to launch ADAS cleaning products to accelerate the commercialization process. According to Polaris MarketResearch, the ADAS cleaning systems market will reach approximately $4.4 billion in 2032. The company has a forward-looking layout in the ADAS field, and related products will be tested one after another in 2023. We expect ADAS cleaning systems to become one of the company's important growth drivers in the future.
Strong cost control and binding high-quality customers to improve the global production capacity layout on the product side. The company continues to enrich its product matrix based on micromotor technology, and implements platform-based and standardized strategies to reduce costs and increase efficiency. On the technical side, forward-looking, lightweight and cost-effective harmonic magnetic field motor technology successfully developed roller motors for use in the logistics field. On the manufacturing side, by extending the industrial chain, we will gradually develop our own production of key materials and reduce outsourcing costs.
The client strategically binds world-class tier 1 suppliers and OEMs, and actively promotes overseas base construction in Thailand and the United States to help the company further open up overseas markets.
Investment advice
We expect the company's revenue for 2023-2025 to be around 960, 12.4 billion yuan, and 1.59 billion yuan, respectively, or +30%, +29%, and +28% year-on-year, respectively. Net profit attributable to mother was approximately RMB 2.0, 260 million, and 350 million yuan, respectively, or +38%, +32%, and +33% year-on-year, respectively. The current stock price corresponds to PE at 30, 22, and 17 times, respectively. Considering the continuous expansion of incremental application scenarios for automotive micromotors, the customer terminal penetration rate continues to increase, the growth path is clear, and the first coverage gives a “buy” rating.
Risk warning
Supporting customer sales fell short of expectations; new product expansion fell short of expectations; raw material prices rose; risk of exchange rate fluctuations.