The company's products include gasoline cars and motorcycle EMS, electric cars MCU, VCU, hybrid vehicles EMS, VCU, MCU and GCU and t-box network connected automotive products. EMS products have high barriers, and the company is a domestic leader with strong R & D strength, excellent profitability, domestic replacement of core components and upgrading of the sixth grade, which is expected to quickly realize the expansion of products from "zero" to "one" in the field of passenger cars. The company's target track has 20x growth space relative to the current, we believe that the company has the fact that it is growing and has the possibility of sustained and rapid growth, has the potential of a dark horse, and is given a "highly recommended-A" rating for the first time.
The company has clear competitiveness in the subdivision track, and is the first place.
EMS is one of the key factors that determine the fuel consumption, emission, power and driving performance of the whole vehicle, and it is the core component of the engine system and the whole vehicle. The technical barrier is very high. For a long time, it has been monopolized by multinational manufacturers such as Bosch, mainland Germany, Japan Denso, Delphi and other multinational manufacturers, and has become one of the main bottlenecks restricting the autonomy of China's automobile industry. The company is the only two EMS localization target (the other is Oex, but the business scale, development trend and the company has a big gap), sub-sector leader, in the N1 gasoline vehicle field market share of more than 68%.
It is in a period of rapid growth and has a clear driving force.
In terms of growth, the net profit of the company in 2019, 2020, and 2021 is RMB 0.81 million, respectively, and the three-year CAGR is 84%. We expect the company's net profit in 2022, 2023, and 2024 to be 2.44, 3.55 and 495 million yuan, respectively, and the CAGR is 53% in three years. The company is in a period of rapid growth.
In terms of driving force, the external driving force is mainly the opportunity of localization of parts and components and the urgent implementation of RDE regulations in the sixth national emission standard, which forces multinational EMS manufacturers to squeeze out some projects to benefit the company from "zero" for the company's products.
Provide opportunities to "one". The internal driving force is mainly through technology-leading and cost-leading strategy, using high-tech barrier products to be compatible with low-tech barrier products, and expanding scale advantage through hybrid control system, so as to establish a cost advantage in the pure electric vehicle electric control system market.
Product expansion, track 20x expansion.
At present, the company's supporting models are mainly N1 models, cross passenger cars, large displacement motorcycles, off-road vehicles (matching ECU), the market space is about 4 billion yuan. In the future, the company's target market will be expanded to a full range of vehicles (except diesel vehicles), with a target market space of about 75 billion yuan.
Investment suggestion: it is estimated that the company's net return in 2022, 2023, and 2024 is RMB 355,495 million, yoy is 78%, 45%, and 39%, respectively, and the corresponding PE is 25.5X/17.6X/12.6X, respectively. We believe that the company has the fact that the company is growing and has the possibility of sustained and rapid growth, so the current company has high performance and price, has dark horse potential, and is given a "highly recommended-A" rating for the first time.
Risk tips: (1) Business expansion is not as expected. (2) the iteration of product technology is not as expected.