A high-quality supplier of stamping and welding parts, the customer range is constantly expanding, and the structure continues to improve. The company was founded in March 2004 and listed on the Shanghai Stock Exchange in 2017. The company's main business is the development, production and sale of automobile stamping and welding parts. After 20 years of development, it has become one of the few professional manufacturers of automobile stamping and welding parts in China that can simultaneously provide large-scale support for commercial vehicles and passenger cars. From a product perspective, the company's main products are stamped and welded parts for car bodies and chassis, accounting for more than 80% of total revenue; from a regional perspective, the company has achieved location advantages in East China and coverage throughout the country through investment; from a customer perspective, the company's customers include well-known passenger car and commercial vehicle manufacturers. Among them, JAC and Chery are the company's top two customers. At the same time, along with the company's continuous expansion of downstream customers, the customer concentration gradually declined and the customer structure continued to improve.

Actively invest in the die-casting parts industry to further expand business and product categories. As an important vehicle energy saving and emission reduction method, lightweight technology can reduce vehicle weight under conditions that meet vehicle safety and cost control. It is an inevitable requirement for both traditional fuel vehicles and new energy vehicles. Aluminum alloy is one of the commonly used lightweight materials. The amount of aluminum contained in cars and bicycles is increasing year by year, and the coverage categories are constantly expanding. Integrated die casting was first proposed by Tesla and mass-produced. With its advantages such as high production efficiency and low cost, it provides a new model for automobile weight reduction and aluminum alloy applications. Facing the rapid growth of the new energy industry and the iterative development of industry technology, the company increased R&D investment and product development efforts, entered the field of integrated die-casting starting in 2022, and introduced high-end R&D talents to establish an integrated die-casting division to further study the integrated die-casting aluminum alloy molding process, and simultaneously promote a full set of forward-looking technical demonstration research and partial trial production. Furthermore, the company plans to raise capital to invest in integrated die-casting projects by issuing shares to specific targets.

Downstream customers have entered a period of upward sales, and the company is expected to continue to benefit. JAC's sales have been stable in recent years, and exports have improved its sales structure; Chery has become a leading autonomous car company, achieving rapid sales growth through exports, and new energy is also rapidly being deployed, and hybrid and pure electric dual lines are being promoted; at the same time, both car companies have joined the Huawei Smart Choice Model and joined hands with Huawei to enter the middle and high-end new energy markets. As an important supplier to the two car companies, downstream demand will increase as sales increase, which is expected to drive the company's revenue to continue to grow.

Profit forecast and rating: The company's net profit for 2024-2026 is estimated to be 1.64 billion, 2.26 million yuan, and 283 million yuan, EPS of 0.81, 1.11 and 1.39 yuan, respectively, and PE of 17.26, 12.53, and 10.01 times, respectively. First coverage, giving a “buy” rating.

Risk warning: downstream demand falls short of expectations, raw material prices rise, new business development falls short of expectations