Key points of investment:
The global advantage position of sun visors is stable and continues to drive business development. The company's core product, automobile sunshades, has long occupied more than 30% of the global passenger car market, and multiple businesses have combined cost control to achieve steady growth in profitability: 1) The company's revenue volume has grown steadily, the company's business supply of products such as sunshades and ceiling central controllers has steadily increased, and product value has also increased steadily. The company's revenue in 2020-2023 increased from 3,950 million yuan to 5.861 billion yuan. Net profit to mother increased from 393 million yuan to 654 million yuan; 2) The gross margin of the main business was affected by the price of raw materials There was significant fluctuation. Gross margin declined in 2020-2022 due to rising raw material prices, and gross margin rebounded rapidly in 2023 due to falling raw material prices, but the company's ability to control expenses steadily improved, and the sales+management+R&D expense ratio gradually fell from 13.61% in 2021 to 12.06% in 2023.
Automotive interior bicycle ASP is growing rapidly, and the product scalability is high. ① The interior industry continues to upgrade, providing good development opportunities.
The global passenger car interior market is expected to increase to 1344.7 billion yuan by 2026. ② The core processes of interior products are interconnected, and the company's core technology is homologous, which can provide technical support for business category expansion. ③ The company will expand the roof product line, increase the value of bicycles dramatically, and increase the ASP and market capacity of supporting products.
The overseas layout has a first-mover advantage, and overseas factories have already achieved profits. ① The company had an early overseas layout, accounting for more than 80% of overseas business. ② The synergy effect of integrating Motus is obvious, the global share has further increased, the company's overseas revenue has been rising year after year, and it has a first-mover advantage. ③ Overseas factories have been in operation for a long time, and the process and supply chain management have been fully integrated. They have all achieved profits and have a first-mover advantage.
Expand the assembly horizontally from a single component to open up a secondary growth curve. While maintaining the impressive production and sales ratio of its main products, the company actively expands product categories, accelerates the implementation of NEV interior support, and achieves business integration and growth: ① The steady rise in the market share of ceiling system products helps integrated business development; ② the roof and roof assembly product expansion project has been targeted by customers, and is expected to achieve steady growth in revenue and net profit after delivery, which is beneficial to the company's efficiency improvement.
Profit forecast and valuation: We expect the company's revenue for 2024-2026 to be $71.0/83.7/9.86 billion yuan, and net profit to mother of $90/10.0/1.18 billion, respectively, corresponding EPS of 0.54/0.61/0.71 yuan, and PE corresponding to the closing price of June 27, 2024 being 18/16/14 times. Referring to comparable company valuations, 22 times PE was given in 2024, corresponding to a target market value of 19.712 billion yuan. Compared with the current market value of +23%, coverage was given a “buy” rating for the first time.
Risk warning: Fuel vehicle sales decline, raw material prices fluctuate, exchange rate fluctuations, and new business expansion falls short of expectations.