\u3000\u3000 Hanwei Electronics Group Corporation(300007) (300007)
Event: the company announced that Hanwei Electronics Group Corporation(300007) increased the capital of Xinli Automotive Electronics Co., Ltd. by 50 million yuan with its own funds. After the capital increase, the company accounted for 18.16% of the registered capital of Xinli electronics after the capital increase, and further expanded the business of automotive electronic air sensors.
Cooperation and collaboration will open up the market of on-board gas sensors, and the competitiveness is expected to be further enhanced in the future
This investment conforms to the company’s future strategic development plan, helps the company open a new industry track for air sensor applications, and further improves the company’s gas sensor industry chain. At the same time, the cooperation between the two sides can realize complementary advantages: the quality of the investment object is excellent, there are mainframe car factory customers / orders / channels, and Hanwei has core sensor devices and technologies. After the completion of this investment, the sensor company under Hanwei Electronics Group Corporation(300007) will be the supplier of electronic air products for Xinli electronic automobile, It can provide core sensor devices and technical support for the development of both sides in the field of automotive electronics. Xinli electronics’s three-year performance commitment: the revenue of 22-24 years is 194 million yuan, 410 million yuan and 520 million yuan respectively, and the net profit deducted is 6.88 million yuan, 25.84 million yuan and 42.35 million yuan respectively. The competitiveness of Hanwei Electronics Group Corporation(300007) on-board gas sensors is expected to be further enhanced in the future.
Sufficient fixed-point and high-quality electronic resources can be established in the future
Xinli technology, the controlling shareholder of Xinli electronics, started with traditional automotive interior parts and molds, has been deeply engaged in the automotive industry for more than 20 years. With profound technology accumulation and mature sales channels, Xinli technology has developed into a leading enterprise in the industry. Xinli technology injects the automotive electronic business into Xinli electronics and Hanwei Electronics Group Corporation(300007) injects the investment into Xinli electronics. Xinli Electronics will mainly engage in the R & D, production and sales of automotive electronic air products (carbon dioxide detection, dust detection, AQS, anion generator, fragrance and other products). At present, it has won the project fixed-point of many automobile enterprises outside China, such as great wall, Weilai, air conditioning international, ideal, Geely, Nanfang Int’l, Dongfeng, Valeo, GAC Toyota, Xiaopeng and other mainstream brands. From 2022 to 2027, the total number of designated products is about 34.11 million, including PM2.5 million 5 the total number has reached more than 12.77 million, more than 7.4 million negative ions, more than 12.78 million fragrance systems and more than 1.16 million AQS systems, and fixed points have been successively converted into orders and began to be delivered to vehicle enterprises. Become the benchmark of China’s automobile electronic products in the future.
In the medium term, the advantageous fields are expected to benefit deeply, and the sustained and rapid growth can be expected in the future
After the gas / fire explosion in China, industrial safety / gas and other safety are expected to rise to rigid demand. The gas monitoring market space in the catering industry is considerable, and the original penetration rate is low. Due to the requirements of the safety law, it may increase significantly in the short term. The market space brought by it will not be digested in the short term, and the cycle is expected to be at least 2-3 years, As the leader of gas sensor, the company’s related products are expected to benefit deeply. There are also opportunities for domestic substitution in industries and other fields. The company has been shortlisted for four consecutive times in the framework procurement bidding of Sinopec in 2021-2022, and has achieved excellent results in the top two in the five bid sections. At the same time, the company has also been shortlisted for CNOOC for the first time this year, which can continue to grow rapidly in the future.
In the long run: benefiting from the double carbon goal and the penetration of Internet of things in all walks of life, the company’s new products and new fields open up long-term growth space
In the current environment, the company’s main performance drivers are: 1) the penetration of Internet of things from all walks of life accelerates the release of sensor demand; 2) The new work safety law drives the consensus of safety rigid demand, and the company has broad market space in advantageous fields; 3) Low carbon emission reduction, “double carbon” goal brings long-term benefits to the company; 4) The process of localization substitution is accelerated, and the products usher in more market opportunities; 5) Intelligent upgrading in consumer areas such as home / vehicle improves the company’s product demand.
Profit forecast and investment suggestion: with the advent of the era of Internet of things, all industries in the whole society are facing intelligent and digital development opportunities, which will drive the demand for front-end sensors and instruments. At the same time, the company will layout the Internet of things application business and make efforts at the front-end Internet of things and instruments, and the space is expected to be gradually opened. Considering the upstream price rise and the uncertainty of chip supply, the estimated net profits of the company for 21-23 years are adjusted to 270 million yuan, 380 million yuan and 500 million yuan respectively (the original values are 280 million yuan, 400 million yuan and 520 million yuan), corresponding to 20 times PE in 22 years, and the “buy” rating is reiterated.
Risk tips: intensified competition in the Internet of things industry, tension in upstream chips and risk of price rise of raw materials, management risk brought by group operation, impact of covid-19 epidemic, possible failure to achieve expected investment income, etc
