\u3000\u3000 Dongguan Yiheda Automation Co.Ltd(301029) (301029)
Focus on automatic parts and build an intelligent and digital one-stop supply platform
As a leader in China’s FA automation parts industry, the company has developed a fa factory automation parts product system covering 176 categories, 1404 sub categories and more than 900000 SKUs. In the past three years, the compound growth rate of net profit was 65%, the average gross profit margin was 43.1%, and the performance and profitability were greatly improved. The downstream industry structure of the company is scattered, and the total revenue of 3C, new energy and automobile industries accounts for about 54%. The company has a one-stop procurement platform for FA automation parts, which integrates informatization and digitization into the traditional production and manufacturing process, and continuously deepens and promotes the integration and service empowerment of automation equipment parts manufacturing industry with informatization and Internet.
High growth track, low penetration rate and large domestic substitution space
In 2023, the market scale of FA automation parts in China is expected to reach 139.3 billion yuan. In 2020, the scale of China’s automation market was 189.4 billion yuan, of which China’s FA parts accounted for about 55% of the total automation, and the market scale of FA automation parts was about 100 billion yuan. According to the prediction of industrial control network, the market scale of China’s automation equipment is expected to reach 253.2 billion yuan in 2023. Assuming that the proportion of FA automation parts in the overall automation market remains relatively stable in the future, the market scale of China’s FA automation parts is expected to reach 139.3 billion yuan in 2023, with an annual compound growth rate of 12%, and the industry market space is huge. The accelerated penetration of industrial automation is the general trend. Benefiting from the vigorous development of 3C, new energy, automobile and other industries, the downstream demand is expected to continue to be strong.
One stop service platform is the only way for the development of automation parts industry in the future. China’s automation parts industry is scattered and the product quality is uneven, which reduces the efficiency of automation production. Centralization and platform are the development trend of manufacturers in the future, which will better serve China’s automation industry. The market share of non-standard products in China’s FA automation parts industry is about 40%, and the standardization of non-standard parts will become the transformation direction of products in the future.
Mismi still occupies a large market in China, and there is a large space for domestic brands to replace imports. The company’s main competitor is Mismi (China), and Mismi of Japan is the one-stop supply leader of global automation parts. From 2019 to 2020, its market revenue in China was 3.5 billion yuan and 3.3 billion yuan respectively; The net profit is 1.5 billion yuan and 1.1 billion yuan; The total number of customers is 300000; There are 26.7 million kinds of dealers’ products, which still have market advantages, and there is a lot of room for domestic brands to replace in the future. Dongguan Yiheda Automation Co.Ltd(301029) will fully benefit from industry growth and import substitution dividends to improve market share.
The company’s five product strategies enhance its core competitiveness, with an obvious trend of industry concentration and strong growth momentum
Product width, single product depth, delivery speed, research and development height and quality accuracy are the five core product strategies of Dongguan Yiheda Automation Co.Ltd(301029) . The company is positioned as a long tail customer, and its core service object is the automation equipment engineer with pricing ability. At present, the products covered by the company only account for about 6% of the whole category of parts. In the future, with the expansion of categories, the penetration rate still has great room to improve. It is expected that the product coverage rate of the company is expected to reach 10% in 2025.
Profit forecast and valuation
It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 400 / 580 / 810 million, with a year-on-year increase of 48% / 45% / 40%; EPS is 1.12/1.62/2.26 yuan, corresponding to 70 / 48 / 35 times of PE. “Buy” rating is given for the first time.
Risk tips
The prosperity of the industry fluctuates greatly; Intensified market competition; New product R & D and marketing are not as expected
