\u3000\u3000 Jiangsu Leili Motor Corporation Limited(300660) (300660)
1. Focus on the micro and special motor industry, and expand the growth space through M & A
The company is an international leader in micro and special motors. In the traditional household appliance micro motor business, through continuous extension and M & A, the company cuts into high boom tracks such as medical devices and new energy auto parts to achieve multi-dimensional development. In 2020, the revenue and net profit attributable to the parent company will be RMB 2.422 billion and RMB 273 million, and the CAGR will reach 10.63% and 4.27% in 16-20 years; 21q1-q3 revenue and net profit attributable to the parent company reached 2.146 billion yuan and 222 million yuan, with a year-on-year increase of + 25.47% and + 0.22%. The product structure was continuously optimized, the development bottleneck was successfully broken through, and the performance was good.
2. The domestic substitution of micromotor is accelerated, and the development prospect of downstream application is broad
Micro special motor industry: as the core component of equipment automation, micro special motor has rich downstream application scenarios. The output of China's micro and special motors has a global market scale of 250 billion, the import substitution has accelerated, and the industry has ushered in a period of strategic opportunities. Medical device industry: during the 14th Five Year Plan period, high-end medical devices are expected to benefit from policy stimulus and usher in rapid development. At present, the competition of medical devices in China is highly fragmented, with Cr20 of 14.20%, far lower than 54.40% in the world. The scale of China's medical device industry is expected to exceed 1.2 trillion yuan in 2025, and the CAGR will reach 14.47% from 2016 to 2025. New energy vehicle parts: the lithium battery thermal management system has switched from air cooling mode to liquid cooling mode. Liquid cooling products have been launched by Byd Company Limited(002594) , Contemporary Amperex Technology Co.Limited(300750) and other leaders. With the rapid penetration of new energy vehicles, the demand for electronic water pumps and other parts is rising. The market scale of electronic water pumps for new energy vehicles is expected to be 2.17 billion yuan in 2025 and 16.30% CAGR in 2020-2025.
Household appliance industry: from 2009 to 2011, stimulated by policies such as "home appliances to the countryside", the industry has entered the substitution cycle according to the service life of home appliances.
3. Advantages of the company: follow the example of the rise of foreign leading mergers and acquisitions, build an enterprise moat in multiple dimensions, and the company refers to the development path of global micro motor leaders, continuously expand external mergers and acquisitions, expand internally, and develop servo motors, so as to realize the closed-loop layout of industrial control field; Enter the field of medical devices and new energy vehicles and grasp the in-depth layout of domestic substitution cycle. The company continues to improve technology, bind core customers, and use equity incentive to improve team cohesion.
Profit forecast: We selected the listed objects in the same micro and special motor industry as the valuation reference, and calculated that the PE arithmetic average values of comparable companies in 2020 / 2021 / 2022 were 39.53/44.12/26.61x respectively. The current market value of Jiangsu Raleigh corresponds to PE of 24.85/26.27/19.38x respectively. We think there is still some room for improvement in the company's valuation. Therefore, we choose 26.61x in 2022 as the target valuation. The target market value is 9.312 billion yuan and the target price is 35.91 yuan. It is covered for the first time and given a buy rating.
Risk tips: the effect of external M & A, internal production expansion is less than expected, macroeconomic changes and periodic fluctuations in downstream industries, the technical iteration of micro motor industry is less than expected, the goodwill of M & A is subject to impairment risk, and there are recent changes in stock prices
