Company profile: focus on the top decoration & the global leader of the sunshade panel of the seat system. The company specializes in car ceiling and seat system (non-whole chair) track (sunshade, headrest, armrest, ceiling and ceiling system, etc.). The sunshade business is the world leader, with a market share of 45.9%. Relying on the sunshade and headrest and handrail business, the company continued to grow in 12-19 years, with revenue of CAGR12-19.3%, essentially due to the company's leading global strategy, significant cost control ability and excellent overseas integration and management ability. the subsequent growth stems from: based on the homology of underlying process technology (injection molding, foaming, etc.) rubbings and assemblies (ceiling and ceiling system integration) ② added core customer volume (Tesla, Inc. globalization) and path replication (headrest, ceiling and other products copy sunshade customer expansion path).
Overall cognition: the global strategy is leading, the cost control ability is remarkable, and has the fully verified overseas integration and management ability. 1) Global strategic leadership: ① first entered the North American market with the help of North American GM; ② then acquired Motus integrated sunshade overseas market, and the integration achieved initial results; ③ currently starts the construction of a production base of Mexican roof system to further expand overseas production capacity, customer resources include world-renowned vehicle manufacturers and Tier1 suppliers; 2) strong cost control: ① integrated industrial chain to achieve high self-control rate of products ② Zhoushan low-cost factory contributes excess profits; ③ standardized product management achieves cost reduction of homologous products; 3) fully validated overseas integration and operation capabilities: high self-control rate and high Motus outsourcing rate, reduced cost of supply system switching; strong self-management ability and integration with the same industry chain to enhance certainty.
Industry analysis: the sunshade is stable, the headrest players are numerous and scattered, and the roof space is concentrated (especially in the North American market).
Space: it is estimated that the 25e sunshade / headrest / ceiling space is 472.2b for 87x208 and CAGR22-25cm, respectively. The space increases steadily at a large speed. Pattern: the global pattern of the sunshade is stable; the headrest players include seats and third-party headrest enterprises, and the players are numerous and scattered.
Growth logic: Tesla, Inc. globalization and North American three major customer path replication (quantity) overlay top decoration system assembly expansion (price).
Quantity dimension: 1) Tesla, Inc. 's share growth entered the company's top five customers, the globalization strategy Mexico factory is the first to grasp, the forward-looking overseas capacity layout gives the company a first-mover advantage, and the follow-up will be based on Tesla, Inc. to achieve category expansion and sales volume; 2) star products sunshade panels open the customer path (GM → Chrysler → Ford), high-value products such as ceilings and ceiling systems are expected to replicate. Price dimension: based on homologous process, sunshade panel (100,200) → headrest handrail (300500) → ceiling (800-1000) → top decoration system assembly (3k+) to achieve a significant improvement of ASP.
Investment rating: we expect the company to achieve an operating income of 62.0 million yuan in 2023-2025, with a corresponding growth rate of + 20.5%, 20.7% and 20.9%. Taking into account the short-term exchange rate changes, the downward trend of raw materials and the impact of long-term new business development, we adjusted the homed net profit from 8.5 / 11.1 billion to 1.24 billion yuan in 23-25 to RMB 1.05 billion. The corresponding growth rate is + 41% and "31%" 26%. Based on the closing price as of July 25, 2023, the company's current market capitalization is 23.6 billion yuan, corresponding to the PE of 29X, 23x and 18X respectively from 2023 to 2025, maintaining a "buy" rating.
Risk tips: exchange rate, freight and other overseas disturbance factors, North American car sales are not as expected, potential changes in North American interior pattern brought about by Mexican production capacity layout, the risk of deviation in industry size measurement, the public data used in the research report may have the risk of lagging behind or not updating in a timely manner.