Auto parts company with business all over the world: The company has been deeply involved in the auto parts industry for more than 30 years and has become the world's leading integrated automotive exterior supplier. The company is the world's largest supplier of aluminum battery cases and watch body structural parts. It has 4 product lines of plastic parts, metal and accessories, battery cases and aluminum parts, 5 major R&D centers, and more than 70 production plants. The business covers the world. It has customers in 14 countries on 3 continents, and serves more than 70 car brands. Since its development, the company has continuously expanded its rich product system, and formed a new product system including innovative products such as aluminum power battery cases, light-emitting grilles, and smart front faces through independent research and development.

Metal and trim, aluminum parts, and plastic parts are the company's three traditional main businesses: the company has a high market position in the auto parts industry. According to data from the China Automobile Association, from 2018 to 2020, the market share of the company's body trim and luggage racks ranked first in the country and number one in the world; radiator grilles ranked first in the country and third in the world; and aluminum battery boxes ranked second in the country in 2020. Ranked 86th in the 2020 Global Top 100 Auto Parts Suppliers list published by Automotive News.

Aluminum battery box parts are the main driving force for recent revenue growth: the company's 2021-2023 battery box business revenue is in line with the growth rate. According to our estimates, the company's global market share of battery cases increased from 2.1% to 13.3% in 2021-2023, an increase of 11.2 pcts. The company has large-scale production capacity for aluminum power battery cases and a global production capacity layout. Long-distance transportation of large components such as battery cases is not economical, and the company's implementation of “global nearby supply” has become a competitive advantage.

Actively develop intelligent products: The company has laid out three types of intelligent exterior system products: smart front face, rear door, and side door. The company is forward-looking to develop an integrated smart front face solution, integrating functions such as lighting, heating, transmission, and automatic cleaning; the company is also actively developing the field of smart car doors, including application scenarios such as intelligent entry and automatic opening; in addition, the electric side door system has also received mass production orders from a Chinese new energy brand.

Investment proposal: We expect the company to achieve operating income of 25.115/30.082/34.032 billion yuan and net profit to mother of 2.342/2.796/3.143 billion yuan in 2024-2026. The corresponding PE was 6.78/5.68/5.05 times, respectively, giving a “gain” rating.

Risk warning: orders for aluminum battery box parts fall short of expectations; industry competition increases risk; risk of downstream customer sales falling short of expectations; risk of exchange rate fluctuations.