Investment highlight
Covering company No. 9 for the first time-UWD (689009) gives an outperform industry rating, with a target price of 86.00 yuan, corresponding to 7 times the valuation multiple of Pamp S in 2021. The reasons are as follows:
Technology + channel-based, continue to enable to broaden the product line, relay-driven growth. The company deepens the field of intelligent short transportation and service robot, gradually expands the product line, and forms the product matrix of electric balance vehicle / scooter, electric motorcycle / bicycle, all-terrain vehicle and intelligent service robot. We believe that technology is the core competitiveness of the company, and the high malleability and success of stock technology can endow all the products and form the core competitive advantage of the products. In terms of channels, the company relies on Xiaomi to quickly open its popularity, and continues to enhance its independent brand strength. In recent years, independent brands have gradually risen and their share has increased, which is conducive to future profit growth.
The balance car is robust, the personal demand drives the scooter to grow rapidly, and the electric motorcycle / electricity has contributed to the increment since the beginning. In terms of balanced cars, multi-application scenarios contribute to the steady growth of demand, and we believe that patent advantages will support the company to maintain its leading position. In terms of scooters, the gradual opening of road rights in Europe and the United States in the post-epidemic era is expected to stimulate the rapid growth of individual demand, and the company is expected to maintain a high market share by virtue of brand advantages under the stricter quality inspection.
On the electric motorcycle / electric power side, under the background of domestic demand growth, pattern improvement and overseas electric penetration, the company is expected to rely on outstanding intelligent advantages, rapid channel expansion and brand advantages brought by Segway to achieve rapid growth, and become the core revenue and profit contribution and growth drive.
The earlier card position intelligent service robot opens the space for long-term growth and valuation. Intelligent robots are widely used in industry and service fields. Distribution robots have a large market space, and we estimate that the output value is close to 100 billion US dollars. The company's existing business formation cash cow can support the continuous investment of the robot business, and as the first listed company, the company has advantages in financing channels and technology reserves.
At present, the volume of revenue from the robot business is relatively small, and we believe that with the maturity of the technology and the reduction in costs, the robot business is expected to open up long-term growth space and drive the valuation increase.
What is the biggest difference between us and the market? The growth of the company's revenue is externally reflected in the continuous expansion of product categories, while it is internalized into the accumulation of technical capability and its strong malleability, which continues to be realized until the improvement of product strength. On this basis, we are optimistic about the incremental contribution of the new category and the growth space of the forward-looking business.
Potential catalyst: the rapid growth of electric two-wheeler sales brings profit flexibility.
Profit forecast and valuation
We estimate that the EPS of the company from 2021 to 2022 will be 0.58 yuan / 0.90 yuan, respectively, and the CAGR will be 55%. Combined with the valuation method of pact S and SOTP, the target price of the company is 86 yuan, which corresponds to 7 times of pact S in 2021. It is currently trading at 5.4x 2021 Pamp S, with a target price of 20 per cent upside over the current share price.
Risk
Xiaomi is highly dependent on channels; the problem of electric skateboard rights; the intensified competition pattern of electric two-wheelers; and the potential demand fluctuations caused by the relatively high share of overseas income.