Incident: On May 29, the company announced that it received a designated development notice from the car company Celis to supply smart cockpit display products for its new models. This targeted project is expected to be mass-produced and delivered within 2025, and the project life cycle is 3 years.
Following Quanjie M9 and then starting the Celis collaboration, Huawei continued to break through the company's previous projection screen supply for the Genesis M9 and received good market feedback. The company's first fixed-point model, the Wenjie M9, entered an intensive mass production and delivery period in March 2024. According to Hongmeng Zhixing's official announcement, the Wenjie M9 has only been on the market for 136 days, with a cumulative total of more than 80,000 units. The company's automotive business has also entered the expansion period from 0-1:24Q1 automotive business revenue has reached 50 million yuan.
It is expected that new models of Wenjie will continue to be equipped with Guangfeng products, and the scope of cooperation will continue to break through. The company has once again been selected for the Questionnaire series of vehicles, which we believe shows:
① The logic of in-vehicle projection products continues to be recognized by leading manufacturers, and it is expected that the number of brands that will follow suit will continue to increase in the future.
② The verification period has passed, and the speed at which subsequent products are loaded is expected to accelerate. With the previous generation of cooperative experience, the speed of delivery of the new plan is expected to increase. Referring to the official announcement in May 24, mass production and delivery is expected in 25 years (compared to the previous generation of products that received a fixed notice from Cyrus in January 23 and officially launched in December 23), future automotive business revenue breakthroughs will enter a period of acceleration.
③ The price segment for cooperative products is expected to be further opened. Previously, the M9 was asked to position the flagship high-end, and the new partner model is expected to cover more mainstream people. We expect the new in-vehicle projection solution to mature with experience in mass production, etc., and the cost side is also expected to be further intensive, boosting the gradual penetration of the company's products from high-end customers into multiple price segments, and further opening up long-term space.
New categories such as All-in-One headlights continue to expand, and the automotive blue ocean can be expected in the future. In addition to cockpits, the company also has good reserves in the fields of headlights and HUDs. In April, the Beijing Auto Show Company unveiled the world's first all-in-one all-in-one laser headlight, which integrates various functions such as high beam ADB headlights, color changing temperature headlights, fog lights, ground information display, car cinema, etc., to reduce the total cost of the system and meet diverse needs. We look forward to the launch of new targets such as car lights and HUDs in the future, and continue to broaden the scope of automotive optics business.
Investment advice: buy ratings
The company already has 7 high-quality front-loading stations, and the fixed locations are expected to continue to expand this year. Looking ahead to 24, the profit quality of the company's traditional 2B and 2C businesses will be further improved compared to 23, while the growth curve of the automotive business continues to accelerate, and the business trend continues to improve. We expect the company's 24-26 profit of 150, 290, and 380 million (24-25 years ago's value of 150 to 30 million), corresponding to PE51, 27, and 20x. Maintain a buy rating.
Risk warning: Vehicle performance falls short of expectations, the downstream boom in C-side business fluctuates, and short-term R&D investment increases