[Core Conclusion] We believe that the profitability of the company's original business is improving. Considering the rapid development of the aluminum alloy lightweight business and the continuous breakthroughs in the humanoid robot screw business, we expect the company's net profit to be 0.79/1.18/179 million yuan in 2024-2026, and the company's 2024/04/23 stock price corresponding to PE is 69/46/30 times, respectively. First coverage, giving a “buy” rating.
[Report Highlights] Trying to answer market concerns: 1) Can the company's performance be improved? 2) Can the screw business achieve a breakthrough? We believe that with the restoration of industry prosperity and the rapid growth of the company's new business, the company's profit margin is expected to increase. Screw products are homologous to the company's chassis parts business in terms of technology, and the company is expected to stand out on the screw track.
Main logic #1：底盘零部件及商用车空压机稳中有升。 The company ranks first in market share in the domestic steering gear rack and shock absorber piston rod industry. At the same time, the company has maintained a leading position in the field of commercial vehicle air conditioning compressors in recent years. As automobile production and sales increase steadily and commercial vehicles enter an upward cycle, the company's chassis parts and commercial vehicle air compressor business is expected to maintain a steady upward trend.
Main logic #2：铝合金轻量化业绩处于高速增长期。 The company achieved revenue of 127 million yuan from lightweight aluminum alloy in 2023 (+182% year over year), and gross margin increased significantly to 10.37% from 0.37% in 2022. With the continuous expansion of aluminum alloy lightweight product categories and customers, we think this business may become a new growth pole for the company.
Main logic #3：丝杠与原有底盘零部件在工艺上具备同源性。 The company has been deeply involved in the automobile chassis parts industry for more than 20 years. The accumulated production process is highly homologous to the production process of screw products. The company's R&D team has formed a complete set of processes and production plans in the corresponding precision machining, grinding, tempering of raw materials, surface heat treatment, flaw detection, and straightening. The company is actively cooperating with customers to develop screw products related to humanoid robots. We believe that the company is determined to enter the humanoid robot industry chain and is expected to fully seize the good opportunities for the development of the humanoid robot industry.
Risk warning: the risk of insufficient domestic automobile consumer demand, the profit of the aluminum alloy lightweight business falling short of expectations, and the development of the humanoid robot industry falling short of expectations