Huada Automotive Technology Corp.Ltd(603358) (603358)
Investment logic:
The company’s traditional stamping business benefits from the recovery of the industry and the development of new energy vehicle customers. The customer structure dominated by joint venture brands is expected to enjoy more industry dividends. At the same time, the company actively develops the new energy vehicle market, the battery box binds high-quality customers, grows rapidly, and lays out the integrated die-casting field, opening space for subsequent growth.
Stamping parts: benefiting from the recovery of the industry and the steady development of new energy customers.
Since the fourth quarter of 2021, the degree of core shortage has been gradually alleviated, and the industry has entered the recovery stage. With the gradual improvement, the industry will enter the inventory adding stage. At that time, auto parts enterprises will benefit significantly. At the same time, from the perspective of the structure of automobile enterprises, the joint venture brands are more seriously affected by the lack of core, and the joint venture brands dominated by Honda, Toyota and Volkswagen are expected to significantly benefit from the recovery of the industry. At the same time, the company actively expands new energy customers and supplies products to Tesla and other leading OEMs, which is expected to benefit from the rapid development of new energy customers.
The battery box business is developing rapidly and the layout is integrated in the die casting field.
The company’s Jiangsu Hengyi has entered the field of battery boxes for new energy vehicles. Its downstream customers cover Contemporary Amperex Technology Co.Limited(300750) , Yutong Bus Co.Ltd(600066) , Xiaopeng automobile and other customers. It continues to develop GAC new energy, SAIC, Byd Company Limited(002594) Toyota and will build a production capacity of one million sets. At the same time, the company plans to acquire new materials of AVIC and expand to the field of integrated die casting by taking advantage of Beihang’s technical advantages in the field of lightweight. Hangda new material has low-pressure die-casting, differential pressure die-casting, high-pressure die-casting and other die-casting processes. The company will apply the existing processes of Hangda new material to promote the implementation of integrated die-casting. According to the company’s plan, the company is the first to implement the integrated casting of low-pressure die casting and differential pressure die casting, which is mainly used in battery box and rear axle assembly of new energy vehicles, and the subsequent high-pressure die casting will enter the body die casting.
Investment advice
We estimate that the company’s EPS from 2021 to 2023 will be 0.81 yuan, 1.05 yuan and 1.43 yuan respectively. The first coverage is given a “buy” rating.
Risk statement
Macroeconomic downturn; Risks such as lower than expected mass production of new process reserves.
