Bethel Automotive Safety Systems Co.Ltd(603596) (603596)
The domestic automobile braking system is the leader, and its operation is stable. Founded in June 2004, the company is the leader of braking system in China. The main products include disc brakes Lightweight brake components and electronic parking brake system (EPB), at present, the main product focus is the one box brake by wire system that has been mass produced. Mr. Yuan Yongbin, chairman of the company, is an expert in the industry and holds 20.34% of the shares of the company. In recent years, the company’s revenue has maintained an upward growth trend. In the first three quarters of 2021, under the overall lack of core in the downstream automobile industry, it still achieved the synchronous growth of revenue and profit 。
China’s first mass-produced one box brake by wire system manufacturer. Relying on the technical accumulation in ABS and ESC products, the company developed the outgoing line control system in July 2019 and mass produced and assembled customers in the second half of 2021. As the only manufacturer of one box line control system in China, the R & D progress and technical level of the company’s line control products are higher than those of its Chinese counterparts. At present, the dynamic penetration rate of industry line control is very low, and more than 95% of the market share is occupied by traditional parts giants such as Bosch and Mainland China. We believe that the company is expected to achieve rapid rise with the ability of low cost and rapid response in the early stage of industry penetration.
Overseas customers helped the rapid growth of the company’s lightweight business. Under the background of the rapid penetration of new energy vehicles, the significance of vehicle weight reduction and energy consumption reduction is more prominent, and vehicle lightweight has also become the general trend of industry development. The company’s lightweight business started with supporting GM’s supply chain. At present, it is also deeply bound to GM. In the future, with the release of the production capacity of the Mexican base, it is expected to continue to expand the mainstream automobile enterprises produced in Mexico, so as to support the continuous growth of the company’s lightweight business.
Maintain the company’s “prudent recommendation” rating. It is estimated that the company’s revenue from 2021 to 2023 will be 3.587 billion yuan, 4.427 billion yuan and 5.384 billion yuan respectively, with corresponding EPS of 1.32 yuan, 1.67 yuan and 2.05 yuan respectively, and corresponding PE multiples of current stock prices of 48.45 times, 38.36 times and 31.21 times respectively. The revenue of the company’s main electronic parking and lightweight products is growing rapidly, and the future performance is uncertain. We estimate it according to the profit in 2022. The company is a scarce target in the smart car industry. As the first manufacturer of one box line control in China, it will benefit from the improvement of smart car penetration in the future. For comparable companies in the benchmark industry, we give the company a PE valuation of 40-45 times in 2022, with a corresponding reasonable valuation range of 66.80-75.15 yuan, maintaining the company’s “prudent recommendation” rating.
Risk tip: the production and sales of downstream vehicles are less than expected, the development of intelligent vehicles is less than expected, the expansion of new business is less than expected, the progress of new product R & D is less than expected, and the price fluctuation risk of raw materials.
