The company's leading position is stable, and the chassis business prospects are broad: the company has now established a relatively complete customer system. In 2022, the market share of the company's steering gear rack products was as high as 50%, and the market share for shock absorber piston rods reached more than 45%. The auto parts industry has high technical barriers, the relationship between automakers and parts suppliers is highly sticky, and the company's leading position is stable. According to the forecast of the Gaiser Automobile Research Institute, the domestic passenger car line control chassis core system market will reach 65 billion yuan in 2026, and the CAGR will reach 35.4% in 2026. Based on the domestically produced wire-controlled chassis to replace acceleration, the linear braking system components of the company and Bosch have passed the inspection, accumulated experience in online chassis products, and sought more order opportunities in the fields of wire-controlled suspensions and wire-controlled brakes.
The lightweight market has broad prospects, and the company's profit margins are large: Lightweighting is the general trend of automobile energy saving and emission reduction, and aluminum alloy is one of the best lightweight materials at this stage. The company's core aluminum forging technology is at the forefront of weight reduction for new energy vehicles. According to CMGROUP analysis and combined with automobile sales, the amount of aluminum used in domestic automobiles is expected to reach 6.96 million tons in 2025, and the aluminum alloy market is expected to reach 278.4 billion yuan, and the company's aluminum forging business will fully benefit. China's lightweight automobile market is fiercely competitive, and entry barriers are high. Large amounts of capital and technology are needed to develop and produce lightweight materials and components. In 2023, the company's lightweight business revenue was 0.127 billion yuan, up 182.12% year on year, with a market share of about 0.035%, and there is plenty of room for growth.
The planetary roller screw may open a second growth curve: the planetary roller screw is the core component of humanoid robots. It is difficult to process, the localization rate is low, and the barriers are high. Screws have a similar structure to steering gear racks. As a leading steering gear rack company, the company has the ability to lay out planetary roller screw products. The company's R&D team has formed a set of highly specialized and systematic processes and production plans in precision machining, grinding, raw material conditioning, surface heat treatment, flaw detection, and straightening.
Investment suggestions: The company's chassis business is growing steadily, and weight reduction increases profits; humanoid robots have a large space and may open up the company's second growth curve. We expect the company to achieve operating income of 2.298/2.64/2.966 billion yuan and net profit of 0.061/0.115/0.171 billion yuan in 2024-2026, corresponding to PEG 4.7/0.6/0.7, respectively.
Risk warning: Fluctuations in the macro environment and risk of global economic uncertainty, price reduction pressure and rising raw materials in vehicle competition, falling short of expectations in the industrialization of humanoid robots, risk of equity pledges, and freezing of major shareholders' shares.