技术优势显著，实现90%模具自制，成为首个量产无边框密封条的内资企业。公司具备较强的工装模具和专用设备开发能力、产品整体配套方案的设计能力和同步开发能力，拥有多项与核心技术有关的专利，实现90%生产模具自研，缩短新产品开发和制造周期。公司成为首个量产无边框密封条的内资企业。Investment summary
Deeply involved in the field of automobile seals for 30 years, it has become a leading domestic investor, and has a stable equity structure to help steady development. The company was founded in 1994 and has focused on the automotive seal industry for 30 years. It is a leader in the automotive seal industry in China. The company has a wide range of product segments and supports domestic automobile manufacturers such as FAW-Volkswagen, SAIC Volkswagen, Dongfeng Nissan, Geely Automobile, and Changan Automobile.
Total revenue for the first three quarters of 2024 was 0.842 billion yuan, +14.61% YoY, and net profit to mother 0.129 billion yuan, +33.24% YoY. The company is currently a state-owned holding enterprise in Taizhou. According to the agreement, the equity structure will be stable for the next five years to provide support for high-quality development.
It has significant technical advantages, and has achieved 90% self-production of molds, making it the first domestic-funded enterprise to mass-produce frameless seals. The company has strong tooling molds and special equipment development capabilities, design capabilities for overall product support solutions, and simultaneous development capabilities. It has a number of patents related to core technology, achieved 90% self-research on production molds, and shortened the development and manufacturing cycle of new products. The company became the first domestic-owned enterprise to mass-produce frameless seals.
Profitability is significantly superior to peers, and cost control capabilities are outstanding. The company is located in Xianju, gathering many outstanding talents in the sealing strip industry, with low labor wages and a stable employee structure; the company's tooling and mold production rate is above 90%, and the product yield is higher than the industry average; the management efficiency is high and the cost side is strictly controlled. 2024H1's gross sales margin was 31.14% and the net sales profit margin was 16.47%. During the same period, the gross sales margin of Shenwan Auto Parts Division was 18.89%, and the net sales profit margin was 5.66%.
There are plenty of on-hand orders, and most of them are new energy orders, contributing to steady revenue growth. According to the company's 2024 interim report, the total number of new projects undertaken by 2024H1 exceeds 20% of the full year of 2023, the vast majority of which are new energy vehicle projects. At the same time, the company expects to double the number of new designated projects in 2024 over the same period last year, laying a good foundation for rapid future development.
Investment advice
First coverage, giving a “buy” rating. The company's net profit for 2024-2026 is expected to be 0.189/0.241/0.304 billion yuan, respectively, +25.08%/+27.65%/+26.20% year-on-year, respectively.
The corresponding PE price for November 6, 2024 was 17.91X/14.03X/11.12X, respectively.
Risk warning
The risk of market fluctuations in the automotive industry; the risk of a sharp increase in the size of fixed assets; the risk of fluctuations in the supply and price of raw materials; the risk of declining capacity utilization and gross margin fluctuations.
