Company Overview:
1) The company has been deeply involved in smart sensors for more than 20 years, laying out core businesses such as temperature sensors, pressure sensors and oxygen sensors, and has become a leading domestic enterprise. Temperature/pressure sensors are the company's main business, accounting for 49%/47% of revenue in 2023, respectively. In recent years, the company has successfully ranked among the suppliers of mainstream automakers and parts companies with its excellent product capabilities. At the same time, the company's forward-looking layout of torque sensors is expected to take advantage of the strong growth of the humanoid robot industry and help open up room for growth.
2) Performance showed a rapid growth trend, and net interest rates increased significantly. In 2018-2023, the company's revenue CAGR was 24%, and the net profit CAGR to mother was 48%, and the overall performance was beautiful; the company's gross margin maintained a high level of 30% to 35%, and the net profit margin showed a significant increase trend, from 4% to 11%.
3) The actual controller has a technical background, and the employee's shareholding shows the company's confidence. Wu Ruojun, the actual controller of the company, is from a technical background and graduated from Huazhong University of Science and Technology, majoring in electronic materials and components. He has been deeply involved in the sensor industry for over 30 years, with a shareholding ratio of about 35%. At the same time, the company has set up a shareholding platform for employees to provide long-term incentives for core personnel and demonstrate confidence in the company's development.
Temperature Sensors & Pressure Sensors:
1) Industry level: The Chinese market is growing rapidly, and foreign investment dominates. The sensor industry is at the 100 billion level. By category, China's pressure sensor/temperature sensor market is expected to reach 737/81.9 billion yuan respectively in 2024, and the CAGR is 13%/23% in 2019-24. Overseas leaders have outstanding first-mover advantages, technical advantages, and channel advantages, and occupy major domestic and foreign market shares, but domestic enterprises represented by Amperon are expected to accelerate domestic replacement through technological breakthroughs in segmented fields and significant cost performance advantages.
2) Benchmarking analysis: Benchmarking TDK and Sensata, the company can be expected to grow. Japan's TDK became a global giant in the field of temperature sensors through cross-border mergers and acquisitions, with sensor revenue exceeding 7 billion yuan; American Sensata became a global leader in pressure sensors through self-development+epitaxial mergers and acquisitions, with sensor revenue exceeding 17 billion yuan; after comparing the development history of TDK and Sensata, it can be found that Amperon's current development stage is similar to the technical infrastructure period of the first two. Since its establishment, the company has followed the path of independent research and development, and has sufficient endogenous growth momentum. It is expected that after completing technology accumulation, it will quickly open up room for growth through the horizontal and vertical expansion of the industrial chain.
3) Company highlights: Core technology breaks foreign barriers, and the customer structure continues to be optimized. In terms of technology research and development, the company's “ceramic capacitive pressure sensor” and “temperature-pressure integrated sensor” technology have broken foreign barriers, while the company continues to deepen the R&D of MEMS and glass micro-melt pressure sensors to consolidate its leading position. In terms of customer structure, the company has achieved a transformation from home appliance customers to mainly automobile customers. Since 2020, the top five customers have added BYD, Wanliyang and Lingyun shares in the automotive industry. Since this year, it has received orders of 430 million yuan+ from well-known domestic and foreign automobile manufacturers. Customer structure optimization lays the foundation for high-quality development of the company .
Oxygen sensors:
1) Industry level: Stricter emission standards drive market development, and there is plenty of room for domestic alternatives. Oxygen sensors are mainly used to detect oxygen content in engine exhaust emissions. With the introduction and implementation of the six national emission standards, the application of oxygen sensors in the automotive sector will continue to grow. In 2022, the global oxygen sensor scale will exceed 35 billion yuan, and the Chinese market size will exceed 5 billion yuan. Germany's Bosch accounts for the main share of the domestic automobile market, and there is plenty of room for domestic replacement.
2) Benchmarking analysis: Benchmarking Bosch, the company accelerated its catch up. Bosch is the inventor of automotive oxygen sensors, rich in products and leading in technology and quality. Compared to Bosch, Ampelon is a rising star. After ten years of refinement, it has achieved localization of key materials and strong technical autonomy; it has bound domestic and foreign auto parts manufacturers and major home appliance customers; its current revenue scale is only about 10 million yuan, and the potential for development is huge.
Torque sensors:
1) Industry level: In 2022, China sold 8,360 sets of six-dimensional force sensors, +58%, of which 4840 sets were sold in the robotics industry, accounting for more than 50%, or +63% year-on-year. According to estimates, humanoid robots are expected to add 10 billion dollars in market space for six-dimensional force sensors.
2) Company highlights: The company has independent MEMS chip design capabilities and has mastered mature glass micro-melting process technology. Combining the two technologies can effectively develop force sensors. The company has now set up a “force & torque sensor project based on micro-fusion technology”. The core products include multi-dimensional force sensors. The downstream is mainly used in industrial robots, collaborative robots, etc. Currently, it is in the product verification improvement and sample production stage, which will help the company develop a second growth curve.
Give it a “buy” rating. As the company's production capacity continues to climb, customer orders land smoothly, and downstream demand improves, we are optimistic about rapid growth in performance. The company's net profit for 2024-26 is estimated to be 1.09, 140, and 192 million yuan, profit side CAGR is 33%, and revenue side CAGR is 22%. According to the latest stock price, the corresponding PE is 36, 28, and 21 times, respectively. First coverage, giving a “buy” rating.
Risk warning: Production capacity falls short of expectations, downstream demand falls short of expectations, risks such as fluctuations in raw material prices, risk of deviations in industry size estimates, and the risk that public data used in research reports may be delayed or not updated in a timely manner