Main points of investment
A leader in automotive electronics with core competitive products. The company's main business includes electronic throttle pedals, shift controllers, electronic throttle and other core electronic components. Main customers: commercial vehicles (Sinotruk, Iveco, FAW, Weichai, Yuchai, etc.), passenger vehicles (SAIC GM, Great Wall, SAIC passenger vehicles, etc.), are domestic high-quality vehicle and engine enterprises.
The company has 68 items and interests, and is one of the drafting units of technical standards for electronic throttle pedal assembly, with strong technical strength.
In 2015, the revenue is 267 million yuan, the net profit is 38.47 million yuan, the scale is small, and the business focus gradually tends to the passenger car market.
With the centralized investment of new production capacity raised from 2017 to 2019, the company's future revenue and performance growth is expected to usher in greater flexibility, which is the electronic target of the small and beautiful growth core automobile.
Benefit from the rapid growth of the automotive electronics industry. Due to the impact of the upgrading of consumption and the improvement of energy saving and emission reduction requirements, automotive electronics and intelligence ushered in the rapid development, automotive electronic parts have achieved rapid growth. It is estimated that by 2020, the proportion of domestic automotive electronic vehicle cost is expected to reach about 50%, the market size is about 710 billion yuan, with an average annual growth rate of more than 15%, and the growth of car sales in the second year of senior high school.
Benefit from the huge room for import substitution. As the technology improvement and cost advantages are still significant, the localization rate of automobile core components continues to improve, and the potential of engines, airbags and so on has been very obvious. In the field of automotive electronics, which has high technical barriers, strong profitability and was previously monopolized by foreign giants, the domestic share is also increasing year by year; based on foreign investment, the share of joint ventures in the domestic automotive electronics market is still more than 50%. There is a lot of room for import substitution in the future.
Benefit from the concentrated deployment of new capacity in the next three years. By 2019, the production capacity of electronic throttle pedals, shift controllers and electronic throttle will increase by 144%, 294% and 1000% respectively, and the larger capacity growth will bring greater flexibility to the company's revenue and performance.
Investment suggestion: our company forecasts that the revenue from 2016 to 2018 will be 309 million yuan, 387 million yuan and 546 million yuan respectively. For the first time, the buy-A recommendation is given, with a 6-month target price of 62.00 yuan, equivalent to 5 billion market capitalization (PS:13 times) in 2017.
Risk tips: domestic car sales growth is weak; matching model sales are not as expected; raw material prices have risen sharply.