\u3000\u3000 Ikd Co.Ltd(600933) (600933)
Event: Recently, the company announced that it plans to sign the investment agreement (hereinafter referred to as the “agreement”) with the Management Committee of Anhui Hanshan Economic Development Zone, and plans to build the intelligent manufacturing project of three electricity system parts and auto structural parts of new energy vehicles in Anhui Hanshan Economic Development Zone by stages.
It is planned to build a production base in Anhui. The main products of the project are new energy three electricity system parts and automobile structural parts. The company’s total planned land under the agreement project is about 330 mu. The project is planned at one time and constructed by stages. The project plans to purchase new equipment or production lines such as fully automatic die-casting unit and processing and assembly unit for the production of aluminum alloy products and their supporting mold design and manufacturing, intelligent equipment design and manufacturing. The main products are aluminum alloy parts and automobile structural parts of new energy vehicle battery system unit, motor system unit, electronic control system unit, etc. In order to support the company’s follow-up projects, about 304 mu of land is reserved, and the reserved time shall not exceed two years from the date of implementation of the land index of the plot.
The company accelerated the expansion of new energy capacity layout to meet the needs of business development. The company’s current new energy capacity is mainly located in Ningbo No. 3 factory and some No. 5 factories. The new energy capacity under construction is Ningbo Intelligent Manufacturing Technology Industrial Park. We believe that the completion of Ningbo Industrial Park project and Anhui Hanshan project will enrich the company’s product structure, improve the company’s production capacity and help the company grasp the rapidly growing demand for new energy parts. In recent years, the company’s customer structure has been continuously expanded to new energy main engine plants based on large multinational auto parts suppliers. This project chooses to layout the production capacity in Anhui, which has multiple vehicle factories, which can improve the company’s response speed, enhance customer stickiness and effectively reduce the production and transportation costs of products, It is expected to help the company win new energy orders from local auto enterprises in Anhui.
Electrification is reshaping the pattern of aluminum die casting industry. According to the data of China Automobile Association, the penetration rate of Shanxi Guoxin Energy Corporation Limited(600617) vehicles in 2021 was 13.4%, which was 8 PCT higher than that in 2020. With the rapid development of new energy industry, relevant aluminum die casting products for electric vehicles are still in the process of upgrading and changing, which puts forward higher requirements for the development ability (capital + Technology) of suppliers, and is reshaping the pattern of aluminum die casting industry. Some enterprises that have been engaged in R & D for many years are expected to benefit and develop at the same time. In the current critical period of industry reform, many aluminum die casting enterprises are actively deploying new energy production capacity. We believe that the company has been deeply engaged in aluminum die castings for many years, and has strong competitiveness in small and medium-sized products such as steering, wiper, power and braking system. At the same time, it has the strength to expand its business to large and medium-sized new energy vehicles and intelligent products (see our in-depth report Ikd Co.Ltd(600933) (600933) in-depth report Series II: strength of transforming new energy 20211215). With the increase of orders and the implementation of new projects, expanding production capacity reserves will enhance the competitiveness of the company.
Profit forecast and investment rating of the company: the company’s current product expansion in the direction of new energy is smooth. After the completion of Ningbo Industrial Park project and Anhui Hanshan project, the company will expand the company’s new energy capacity reserve, meet the needs of business development and enhance the company’s competitiveness. We are optimistic about the expansion and volume of the company’s new energy products in the future. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 416 million yuan, 687 million yuan and 815 million yuan respectively, and the corresponding EPS will be 0.48, 0.80 and 0.95 yuan respectively. The closing price on February 10, 2022 corresponds to the PE value from 2021 to 2023, which is 38, 23 and 20 times respectively. Maintain a “strongly recommended” rating.
Risk warning: the sales volume of passenger cars is lower than expected; Rising prices of raw materials; Exchange rate fluctuations; Rising freight rates; The expansion of the company’s new products was less than expected.
