The world's leading motor company, endogenous epitaxial helps diversified layouts

The company was founded in 1984, with motor electronic control as its main business. By integrating the brands and technical advantages of overseas companies with the manufacturing cost advantages of domestic companies, the company has gradually achieved a leading position in the industry in the fields of overall high-voltage drive solutions, drive motors for new energy vehicles, high-end and ultra-high-end household motors, vibration motors, etc., and shipments have grown steadily. In 2024, the company is expected to enjoy the dual policy dividends of equipment trade-in and flying cars from 0-1. We expect the company's net profit to be 11.42, 13.34, and 1,544 billion yuan in 2024-2026, corresponding to the current share price PE of 15.3, 13.1, and 11.3 times. Considering the company's high barriers to the high-voltage motor business, strong profit stability, and obvious advantages in the aeromotor business card position, 2024 is expected to benefit from the equipment replacement cycle. Coverage for the first time will be given a “buy” rating.

The policy side encourages low-energy motors. In February 2024, the company is expected to benefit from the equipment replacement cycle. In February 2024, six departments including the National Development and Reform Commission indicated the energy efficiency level of products and equipment as an important technical basis for energy efficiency reviews of fixed asset investment projects; in March, the State Council issued the “Action Plan to Promote Large-Scale Equipment Renewal and Consumer Goods Trade-In”, which proposed the renewal and technological transformation of energy-using equipment in key industries such as steel, non-ferrous, petrochemicals, chemicals, building materials, electricity, machinery, aviation, ships, textiles, electronics, etc. Through innovative designs such as motor performance optimization, iron core efficiency, copper wire reduction, and chassis weight reduction, the company leads the industry in motor energy efficiency, and is expected to fully benefit from the equipment replacement cycle.

2024 is the first year of the low-altitude economy, and 2024 is expected to be the first year of the low-altitude economy under the dual catalysts of policy and industry. In 2019, the company began to lay out aeromotor products. In 2021, the company reached a strategic cooperation with COMAC and took the lead in preparing airworthiness standards for motors; in 2022, the company and COMAC jointly developed an aeronautical electric power system; in 2023, the company's 70KW high-power aeronautical electric power system was tested by experts from the Ministry of Industry and Information Technology, making it the only electric power system company selected in the “2023 Top 20 Leading Companies in China's Low-Altitude Economy”. The company has a clear first-mover advantage in the flying vehicle motor business layout, and is expected to fully enjoy the dividends of mass production of flying cars from 0-1.

Risk warning: The eVTOL industry's airworthiness progress falls short of expectations; industrial motor prosperity falls short of expected risks.