Iat Automobile Technology Co.Ltd(300825) (300825)
China’s independent automobile design leader focusing on new energy vehicle design: as the first independent automobile design company listed in a shares, the company’s business has gradually expanded to the R & D and production of high-end parts of automobile power system in recent years. The R & D service capability of the whole industrial chain of vehicle design makes the company ahead of its Chinese counterparts in terms of revenue scale, per capita income generation and other indicators, and the leading position is stable. With the popularity of new energy vehicles and the entry of emerging vehicle manufacturers, the design demand for new energy vehicles has expanded rapidly, accounting for 82.69% of the revenue in 2021h1.
The demand for automobile design has increased rapidly with the frequent occurrence of new models: cars have been involved in many scenes such as high-speed, parking, charging and maintenance. Under the development of electrification and intelligence, they will become the next Internet traffic entrance. Leading manufacturers such as Huawei, Xiaomi and Baidu have entered the market one after another. With the competitive pressure of new forces and the implementation of double points policy, the rhythm of introducing new models by existing vehicle manufacturers is also accelerating. Under the superposition of the two, the scale of vehicle design and development market will usher in high growth. We expect that the number of new models will increase by 5% – 15% every year from 2021 to 2023, and the scale of global vehicle design market is expected to exceed 70 billion yuan in 2023.
Independent design mode stands out: compared with the mode attached to automobile production enterprises, independent design mode has sound enterprise management and higher incentive, and can give full play to the subjective creativity of technicians to a great extent. Compared with the model attached to auto parts manufacturers, independent auto design companies are more in line with the needs of Chinese consumers in design concept.
The company has abundant orders for vehicle design: the company has world-class forward-looking vehicle design ability, rich product database and patent reserves, has successfully developed nearly 300 a00-c vehicles, and its customers cover more than 60 mainstream vehicle manufacturers outside China. By April 2021, the company had accumulated new design R & D orders of RMB 1.856 billion in 2021. With the addition of outstanding orders with a stock of 428 million yuan, the total amount of design and R & D orders in hand by the company is nearly 2.3 billion yuan.
High growth of the company’s core parts business: the company is deeply engaged in vehicle R & D and has an in-depth understanding of automobile structure, key components and industry development trends. In order to accelerate the industrialization transformation, under the background that its own technology and customer accumulation are becoming mature, the company has gradually expanded to the field of core components such as engine, coupler and reducer in recent years. As of April 2021, the total revenue of the company’s spare parts sales orders is expected to be in the range of 3.5 billion-6.5 billion yuan. With the production of fixed value-added projects, the company’s core parts capacity and production efficiency are expected to be further improved, and the business will enter the fast lane of growth.
Investment suggestion: the company has one-stop vehicle design ability and has won orders for vehicle design and development and core parts from many vehicle manufacturers. With the production of fixed increase projects, the future revenue is expected to maintain high growth. We expect that the company is expected to achieve operating revenue of RMB 1.263 billion, 2.176 billion and 3.154 billion from 2021 to 2023, with a year-on-year increase of 53.79%, 72.34% and 44.95%. The net profit attributable to the parent company was 217, 317 and 501 million yuan, with a year-on-year increase of 94.94%, 46.93% and 57.48%, corresponding to EPS of 0.66, 0.96 and 1.52 yuan. Based on the closing price on November 22, 2021, the current market value of the company is RMB 11.406 billion, corresponding to PE of 52.39x, 35.66x and 22.65x from 2021 to 2023, which is lower than the average valuation level of comparable companies. The company is given a “buy” rating for the first time.
Risk tip: the promotion rhythm of new models slows down, the lack of core drags down automobile sales, the progress of raised investment projects is less than expected, and the progress of parts business is less than expected.
