The company focuses on the field of braking, actively expands the boundaries of capabilities, and has achieved steady growth in performance. The company started with mechanical braking products such as automobile disc brakes and brake calipers, grasped the development trend of intelligence and electrification in the automotive industry, and gradually developed intelligent electronic control products such as ABS, EPB, ESC, and WCBS. At present, the company's technical capabilities are widely recognized, and it has entered customer supply systems such as GM, Volvo, Ford, BYD, Ideal, NIO, Xiaopeng, and Cyrus. At present, the company's overall performance has maintained a steady growth trend. According to the company's 2023 annual performance advance announcement, the company expects to achieve operating income of 7.450 billion yuan to 7.857 billion yuan in 2023, an increase of 34.50%-41.84% over the previous year; achieve net profit of 881 million yuan to 957 million yuan, an increase of 26.09%-37.02% over the previous year.
Mechanical braking: Global development with broad prospects for growth. The company's mechanical braking products include disc brakes and lightweight brake parts. This is the company's starting business. The company's mechanical braking product revenue in 2022 was 2,661 billion yuan, accounting for 48.04% of the company's total revenue. Currently, the company has sufficient orders for mechanical braking products. In terms of disc brake business, as of 2022, the company has 148 disc brake research projects, including 51 new energy models; 73 new mass production projects, including 19 new energy models; and 156 new fixed projects, including 56 new energy models. In terms of lightweight brake parts, in October 2019, the company signed a supply agreement with GM. It is estimated that during the life cycle of the project, it will contribute more than 1.8 billion yuan in lightweight business revenue to Bethel, with excellent long-term growth capacity. Furthermore, the company is actively going overseas to seek more space for development. Since 2022, the company has been designated for many new overseas lightweight projects. The company's production line for the Mexican lightweight parts construction project with an annual output of 4 million pieces (Mexico Phase 1 factory) was put into operation in September 2023. Currently, construction of the second phase of the Mexican project is progressing smoothly, and production is expected to be put into operation by the end of 2024. We expect that with the successful commissioning of the first and second phase of the company's plant in Mexico, 2024 is expected to bring significant growth to the company's lightweight business.
Wire-controlled chassis business: Essential technology for intelligent driving. The company actively lays out line-controlled motion and wire-controlled steering services.
In terms of line control business, the company is the first supplier to mass-produce One-Box in China. It has a first-mover advantage, and the company has obvious advantages in terms of technology, so the company's market share is expected to continue to grow. According to the company's announcement, as of the end of September 2023, the company had 70 WCBS product research projects. From January to September 2023, 42 new designated projects were added to the company's WCBS products, and the company's line control products still have great potential for growth.
In terms of wire-controlled steering business, the company entered the steering field through the acquisition of Zhejiang Wanda. Zhejiang Wanda has accumulated a deep accumulation of steering systems. It produces 800,000 sets of various electric power steering column products per year, 2.5 million units/sets of steering gear and mechanical steering column series products, and supports many well-known OEMs. Currently, the company has switched to a system with plenty of targeted projects, which is expected to open up a second growth curve.
Profit forecast and investment suggestions: We believe that the wire-controlled chassis sector has a lot of room for growth. As a domestic leader in line control, the company has obvious technological leadership advantages. At the same time, the company actively lays out wire-controlled switching business, which is expected to open up a second growth curve. The company's revenue for 2023-2025 is estimated to be 76.90 billion yuan, 99.39 billion yuan, and 13.037 billion yuan, respectively. The corresponding net profit to mother is 8.75, 11.57, and 1,572 billion yuan, respectively, and the corresponding PE is 28.8, 21.8, and 16.0 times, respectively, covered for the first time, giving it a “buy” rating.
Risk warning: Vehicle demand falls short of expectations, raw material prices fluctuate, technology upgrades fall short of expectations, new project expansion progress falls short of expectations, and capacity construction progress falls short of expectations.