\u3000\u3000 Wuxi Longsheng Technology Co.Ltd(300680) (300680)
Endogenous growth + epitaxial expansion, EGR leader starts again
The company is a leader in EGR (exhaust gas recirculation system) industry. In recent years, it has carried out layout around the iron core of new energy motor and natural gas injection system, with endogenous + epitaxial two wheel drive and strong growth momentum. In 2018, the company acquired Weiyan precision and carried out precision parts business, with diversified revenue structure and steady expansion of products and customers. At present, the company has formed a trinity strategic layout of "internal combustion engine, new energy and fuel substitution", and new business has become an important engine of performance growth. We estimate that the company's revenue from 2021 to 2023 will be 932 / 1661 / 2140 million yuan, the net profit attributable to the parent company will be 103 / 196 / 269 million yuan, the EPS will be 0.51/0.97/1.33 yuan / share, and the corresponding PE of the current stock price will be 48.2/25.4/18.5 times. The "buy" rating will be given for the first time.
EGR has a leading market share, and the application field has been steadily expanded under the upgrading of emission standards
With the upgrading of national VI emission standards, EGR post-treatment technology is more widely used. The company's diesel EGR products are in a leading position in the industry and widely support commercial vehicle customers. It has occupied a high market share in the field of light diesel vehicles and developed rapidly in the field of heavy diesel vehicles. In addition to diesel engines, the company's EGR application field has steadily expanded to non road and gasoline engines. With the rapid development of the hybrid market, the company actively arranges the new energy extended range hybrid engine EGR, which is expected to be carried in hybrid passenger vehicles and open up a broad market space.
Strategic layout drives motor iron core, and capacity expansion ensures high growth
Under the wave of electrification, the drive motor industry is growing rapidly. Stator and rotor iron cores are an important part of the motor, accounting for 30% of the output value. The motor iron core of the company is matched with Volkswagen MEB, Weilai, Nissan Nissan, Guangzhou Automobile Group Co.Ltd(601238) and Dianka automobile through the United automobile electronic terminal. It has become a direct supplier of a foreign-funded electric vehicle enterprise and has been supplied since May 2021. In 2020, the company refinanced and invested in the construction of 1.2 million sets of motor iron core capacity. In November 2021, the company issued a non-public offering plan again. It plans to add 10 production lines and increase the input of motor iron core capacity.
The natural gas injection system is equipped with Bosch, and the growth of fuel substitution business can be expected
The company's natural gas injection gas rail assembly products directly support Bosch and indirectly support Weichai, Cummins and other main engine plants. In 2021, it entered small batch production, the production capacity continued to climb, and the growth of fuel substitution business can be expected.
Risk tips: the mitigation of core shortage is less than expected, the sales volume of commercial vehicles is declining, and the progress of customer development is less than expected
