Wuling Automobile: deeply bound GM Wuling. Wuling Automobile is a leading manufacturer of commercial micro-engines and auto parts in China, and has the qualification to produce electric trucks, mainly engaged in the manufacture and sales of auto parts, engines and special purpose vehicles. The revenue of 20H1 reached 5.71 billion yuan, a decrease of 7.1% compared with the same period last year. The net loss of the company was 290 million yuan, and the 19H1 was 10 million yuan. The controlling shareholder of the company is Guangxi Automobile, which accounts for 60.6%. Guangxi Automobile holds 5.8% of SAIC GM Wuling, the largest customer of the company. The company is deeply bound with SAIC GM Wuling and will maintain a good relationship of coordinated development.
Spare parts: benefit from the hot sales of magic car, the performance ushered in the inflection point. In July 20, Wuling Hongguang MINIEV went public, and its sales increased month by month. Wuling Hongguang MINIEV has competitive advantages in product positioning, price, sales channel and marketing, and benefiting from policies such as going to the countryside and restricting the use of low-speed electric vehicles, we think that Wuling Hongguang MINIEV may fill the 54.85 billion yuan (20 years) low-speed four-wheel electric vehicle market, and sales are expected. Wuling Motor exclusively supplies Hongguang MINIEV electric drive axle, and we estimate that the income of thickening parts and components in 21 years is 72million to 1.66 billion yuan. At the same time, the company layout new energy parts business, and contact Great Wall, Geely, BYD and other independent brands to expand business coverage. In addition, the Federation of passengers predicts that China's passenger car retail sales will grow by 8% in 21 years compared with the same period last year. We believe that the company's spare parts business will benefit from the improvement of the prosperity of China's automobile industry.
Special-purpose vehicle: the card seat high-quality track, the effect waits for the flower to bloom. Wuling Motor can produce 100 different types of special cars according to customer needs, including sightseeing cars, golf carts, minivan transporters, electric cars, school buses and so on. The income of the special purpose vehicle division of 20H1 is 2.33 billion yuan, which is basically the same as that of 19H1. The sales of special purpose vehicles are 53000, a decrease of 13.1% compared with the same period last year. Among them, the sales of modified freight vehicles account for the highest proportion (50,000, 95%), and the sales of new energy vehicles are 1900, an increase of 72.7% over the same period last year. We believe that the increase in sales of new energy vehicles has led to the price of the company's bikes. 20H1 bicycle revenue increased by 16.0% year-on-year to 44,000 yuan per vehicle. We believe that the company's special purpose vehicle business is expected to continue to grow, mainly because:
1) the share of policy-driven electrification in the field of commercial vehicles is gradually expanding, 2) the company continues to launch competitive new models, and 3) the high-quality racing track of card seats-electric logistics vehicles, we expect that the company's new energy vehicle sales in 21 years will reach 10 million to 11 million, thickening the company's revenue by 540 million to 6.5 million yuan.
Profit forecast and valuation. We forecast that the company's 20-21 year net return profit will be-0.7 billion yuan, giving the company 35-40 times PE in 21 years, and the corresponding reasonable value range is 1.68-1.92 yuan per share, which is 2.02-2.30 Hong Kong dollars per share according to the conversion of 1 Hong Kong dollar = 0.83 yuan.
Risk hint. Competition in the new energy vehicle market intensifies; car sales decline under the influence of the epidemic; the effect of policy implementation is not as expected; industry competition intensifies.