Key points of investment

(1) “Entering a narrow door, traveling a long way”, a leading supplier in the automotive energy storage business, the global production capacity layout has improved. Since its establishment, Yap Co., Ltd. has been deeply involved in the automotive energy storage system circuit, and the automobile fuel tank business has maintained the third largest market position in the world and number one in the country for a long time. The company produced the first plastic fuel tank in China, and is also one of the first auto parts companies to “go global” in China. It has established 25 production bases and 7 engineering technology centers in 11 countries on 4 continents. In recent years, the company's revenue scale has remained above 8 billion yuan, and the share of overseas revenue has remained around 40% year-round.

(2) The driving force for growth comes from the increase in the unit price of core products and the expansion of overseas business. The company has deep technical reserves and high-quality customer resources. Currently, it covers many international automobile manufacturers such as Volkswagen, Audi, and GM, as well as domestic automobile manufacturers such as FAW, SAIC, and Changan. The company has developed YNTF, a two-piece fuel tank blow molding process with the world's advanced level? The product has strongly promoted revenue and performance growth. Along with higher unit prices, hybrid fuel systems adapted to hybrid vehicles and using Y-EMTS technology will be concentrated in mass production and delivery for some time to come, which is expected to drive the iteration and optimization of the company's customer structure and hedge against the negative impact of the decline in sales of traditional domestic fuel vehicles.

Currently, the trend of electrification in the global automobile market outside of China is slowing down. The company has global production capacity allocation capabilities. It has transferred surplus domestic production capacity to emerging markets. Waiting for overseas business to expand, the company's “going overseas” strategy is expected to enter a second harvest period. In addition, the company is actively implementing product portfolios and differentiation strategies to reserve momentum for future transformation, and develop new businesses such as battery cases, hydrogen storage systems, and thermal management.

(3) It has the potential for continued high dividends. The company has maintained continuous dividends since its listing in 2018. The cumulative amount of cash dividends implemented in 2018-2023 reached 1.642 billion yuan, with a dividend financing ratio of 2.35 and an average dividend rate of 61.1%. The difference between the company's net operating cash flow and capital expenditure has gradually widened in recent years. Monetary reserves have become more and more abundant, reaching 2.1 billion yuan in 2024. The balance ratio has declined markedly since 2019. The scale of future capital expenditure is expected to be manageable. The above factors support the company to continue to maintain a large dividend ratio.

Profit forecasts and investment advice

The company's 2024-2026 revenue is estimated to be 8.706/9.235/9.704 billion yuan, net profit to mother is 0.542/0.613/0.712 billion yuan, corresponding EPS is 1.06/1.20/1.39 yuan/share, and the corresponding PE price is 12.6/11.2/9.6 times, respectively.

Assuming that the company's 2024 dividend rate can maintain the average since listing, according to our 2024 profit forecast, the current stock price corresponds to a dividend rate of 4.85%, which has high dividend investment value. Raise the company to a “buy” rating.

Risk warning

The international trade environment has deteriorated, automobile sales have fallen short of expectations, and the price war in the automobile market has intensified.