\u3000\u3000 Zhejiang Asia-Pacific Mechanical & Electronic Co.Ltd(002284) (002284)
Event overview: on January 26, 2022, the company released the performance forecast for 2021. During the reporting period, the annual main business revenue increased by about 24% year-on-year. Among them, the net profit attributable to the parent company in 2021 is expected to be 63 ~ 73 million yuan, with a year-on-year increase of 285.1% ~ 346.23%. It is estimated that the net profit attributable to the shareholders of the listed company after deducting non recurring profits and losses will be 4 million yuan to 14 million yuan in 2021, with a loss of 48.5223 million yuan in the same period of last year.
Performance meets the turning point of high level, and the king of automobile braking returns
As a leading company in China’s automobile braking industry, the company has formed a development strategy based on basic braking and continuous breakthroughs in electronic products. The basic brake has been recognized by mainstream brands such as Volkswagen, great wall, Chang’an, GAC and SAIC, with high-quality customer structure. Since 2017, the company’s profit has been under pressure due to the downward cycle of the automobile industry, the rise of raw material prices, the company’s positive expansion of customers against the trend of capital expenditure and product upgrading and transformation. The net profit attributable to the parent company in 2019 / 2020 was -98 million yuan / 16 million yuan. As the peak of capital expenditure has passed, the industry cycle has recovered, the pressure of depreciation has eased and new orders from new customers have been placed, the improvement of the company’s capacity utilization has driven the profit margin to be more flexible. After continuous R & D investment, the company’s automotive electronics business began to enter the harvest period. The revenue of electronic products accounted for 11.7% in 2021h1, an increase of 350% over 2015. Now it has obtained several project fixed points of head independent brands such as great wall, Chang’an and Zero run. It is expected that the “demonstration effect” of the head of independent car enterprises will accelerate the continuous landing of electronic products and new orders, promote the continuous optimization of the company’s product structure and significantly improve the profit margin. The 6 billion basic braking capacity planned by the company in the early stage has been basically completed, and major customer breakthroughs have been made in automotive electronic products, helping the company’s net profit attributable to the parent company in 2021 to reach 63-73 million yuan, with a year-on-year increase of 285.1% ~ 346.23%. As a leader in the field of automobile braking, the turning point of high-level profit has come, and the King returns in 2022.
Basic brake and automotive electronic two wheel drive, the company has entered a new round of rapid growth
Automotive braking products are the core safety parts, and the requirements for product quality control and manufacturing process are high. Based on the basic braking (brake disc), upgrade the automotive electronics (ABS / ESC / EPB) upward and finally upgrade to brake by wire (IBS), which is the development path of mainstream braking enterprises in the international market. The company’s high-quality and extensive customer structure in the field of basic braking and many years of stable mass production and supply experience provide an important entry point for its further upgrading to line control. As the first enterprise to develop and produce ABS in China, the company has a variety of automotive electronic products to achieve large-scale mass production of China’s core independent brands. At present, the company has carried out close cooperation with core independent brands such as FAW, Dongfeng, great wall, SAIC, Geely and Chang’an, as well as core new power auto enterprises such as Zero run automobile, and its products continue to be recognized by customers. Independent brands are rising in an all-round way and their share continues to increase. The company is expected to achieve “accompanying growth” with independent brands and realize the import substitution of core automotive electronic products. For many years, the company has focused on the field of automotive braking, basic braking and dual wheel drive of automotive electronics business, which is expected to achieve import substitution, and drive the company’s performance to achieve high-quality growth in the next 3-5 years.
Investment suggestion: it is estimated that the company will achieve a revenue of 3.45/41.9/5.47 billion yuan and a net profit attributable to the parent of 0.70/1.22/199 billion yuan from 2021 to 2023. The current market value corresponds to 99 / 57 / 35 times of PE from 2021 to 2023. The company’s automotive electronic products continue to be in large quantities, and its performance is expected to return to a record high level. As a leader in China’s braking industry, it is expected to enjoy a valuation premium and maintain the “recommended” rating.
Risk tips: raw material price fluctuations lead to low gross profit margin expectations, new product expansion is less than expected, exchange rate risk, etc.
