\u3000\u3000 Zhejiang Asia-Pacific Mechanical & Electronic Co.Ltd(002284) (002284)
Event overview: on February 7, 2022, the company announced that it had recently received a supplier Nomination Letter from China First Automobile Co., Ltd. and would develop and produce the rear brake caliper assembly (with EPB) products of Hongqi new energy vehicle project as a parts development and production supplier of FAW; On February 8, 2022, the company announced that it had recently received a notice from a trading company in China that it had been selected as the supplier of ABS actuator (including acceleration sensor) for SUV models of a foreign customer.
Automotive electronics has won orders in succession, highlighting the competitive advantage of products and accelerating the trend of import substitution.
The company is one of the first enterprises to mass produce EPB products in China, with leading technical advantages and product competitiveness in the first echelon in China. Previously, it has been designated for many projects such as great wall, Zero run and Chang’an new energy. This time, it has won FAW Hongqi EPB orders, and the domestic substitution trend has accelerated; ABS products of the company take the lead in breaking foreign monopoly and have been designated by Chinese head independent brands such as great wall, Chang’an, Chery and Dongfeng. This time, we won overseas orders and competed with international leading enterprises on the same stage, highlighting the leading position of the company’s ABS products in China.
Basic brake and automotive electronic two wheel drive are expected to become “Bosch” in China’s braking field.
Take ABS / ESC as the mainstream, and finally upgrade to the international brake disc 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’s customer structure is high-quality, 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, realize the import substitution of core automotive electronic products, and become the “Bosch” in China’s braking field.
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 97 / 56 / 34 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 leading company in China’s braking industry, it is expected to enjoy a valuation premium and maintain the “recommended” rating.
Risk tip: the price fluctuation of raw materials leads to low gross profit margin, less than expected expansion of new products, exchange rate risk, etc.
