Announcement: the company announced that Xiangyou pump, Changan Automobile Union and Dongjia Intelligence are based on the recognition of all parties' professional technology and development planning. the three parties will jointly build the ecological chain of intelligent networking and intelligent driving system through technical cooperation, technology development and equity investment, so as to promote the smooth development and completion of intelligent travel projects, and specially sign a memorandum of cooperation on intelligent travel.

Dongjia Intelligence helps to build the ecological chain of intelligent driving test, and the domestic supporting equipment of EPS business continues to advance. The cooperation among the three parties is mainly focused on intelligent networking and the ecological chain of intelligent driving system: Changan Automobile Union supplies Changan CS55 smart model, Changan EV460 or other Changan new energy models in batches, and provides open services for self-driving agreements and related technical services. Xiangyou pump and Dongjia Intelligence are responsible for providing and applying its executive layer control unit ECU as well as installation and debugging on Changan series vehicles, and are expected to provide electric oil pumps, electric pumps and other parts to the above new energy refitted vehicles in the future. At present, the three parties will start the opening and restructuring of the self-driving platform of the first DEMO car, and complete the upgrading of the intelligent driving technology of the vehicle as soon as possible, and after confirming that it has obtained the closed test license in Hainan Province, start the work of mass expansion of the intelligent driving fleet to 50 vehicles, so as to realize the multi-scene application and iterative upgrade of the intelligent driving system in Robotaxi, Shuttlebus, unmanned bus and unmanned streetless cars.

Hainan Dongjiang Intelligence has completed industrial and commercial registration, intelligent driving test base and intelligent travel project have been carried out steadily. In 2020, the company jointly established "Hainan Dongjiang Intelligent Technology Co., Ltd." with Dongjia Intelligence and other partners, and used the company as the carrier to enter Yazhou Bay Science and Technology City, Sanya City. work with the people's Government of Yazhou District of Sanya City to build "Intelligent driving Test Base and Intelligent Travel Project in Yazhou District of Sanya City". The current project is also progressing smoothly. This also means that the company's EPS application and intelligent driving test are expected to continue to achieve good results.

Generally speaking, the company has a solid position in the main business of traditional pumps, abundant new orders on hand, and the accelerated development of Dongjia intelligent EPS business.

① commercial vehicles: diesel pump business continues to upgrade, into the United States Cummins, Caterpillar Inc, Scania, John Deere and other overseas leaders, as well as high-end horsepower generator sets, ship power and other high-end supply system, is expected to 2022-2023, the net income increment is expected to reach 400-500 million yuan. ② passenger cars: transmission pump business new customers Toyota Motor Corp (new energy), PSA, Changan Qingshan; oil pump business into Geely, Japanese Nissan, American Ford, France Peugeot Citroen and other global joint venture supporting system, and high value-added variable displacement engine oil pump put into production to promote the unit price up, is expected to 2022-2023, the net income increment is expected to reach 400-500 million yuan. In short, the company's main business in the context of import substitution acceleration, including Geely, Souter Transmission (Sany Group) and many other orders, looking forward to 2022-2023, in-hand orders corresponding to the new revenue of 8-1 billion yuan. ③ Dongjia intelligent EPS control system business accelerated development. With the breakthrough of domestic self-driving in 2021, EPS as the executive side will fully benefit. Due to the slow response speed in the cooperation between the system of foreign manufacturers and the executive end, it can be predicted that the executive end will be replaced by domestic suppliers with technical strength and response speed. Yilida is the leader of domestic EPS, and has been broken through by Changan Automobile, Dongfeng Xiaokang and other customers to obtain the supplier qualification of some foreign manufacturers such as Volkswagen Group and French Peugeot. At present, Dongjia Intelligence is mainly equipped with EPS control system, intelligent driving promotes EPS upgrade + import substitution acceleration, and its EPS business is expected to rise in volume and price.

Maintain earnings forecasts and buy ratings. The operating income of the maintenance company from 2021 to 2023 is predicted to be 17.2,21 and 2.52 billion yuan, and the corresponding net profit is estimated to be 2.3,2.8 and 330 million yuan, corresponding to 18,15,13 times of PE. Continue to recommend and maintain the buy rating.