Hengdian Group Tospo Lighting Co.Ltd(603303) (603303)
Key points of the report:
China’s leading general lighting service provider, layout new field of vehicle lighting
Hengdian Group Tospo Lighting Co.Ltd(603303) products cover three categories: civil lighting products, commercial lighting products and vehicle products. While establishing long-term and stable cooperative relations with well-known enterprises such as Philips and Panasonic, we actively expand overseas business. Our products are exported to more than 70 countries and regions around the world, and the number of products exported ranks second in China. While actively increasing the market share in the field of general lighting, the company has gradually expanded to the field of vehicle lighting and vehicle controller, and is committed to becoming a first-class enterprise in China’s vehicle parts industry.
Benefiting from the scale growth of the LED industry and the intensification of merger and integration, the market share of the company is expected to increase
In 2021, the penetration rate of global LED lighting products is expected to reach 66.0%, the market scale is expected to reach 808.9 billion yuan, the penetration rate of Chinese market is expected to reach 79.5%, and the market scale is expected to increase to 582.5 billion yuan. With the intensification of merger and integration in the industry, the company is expected to increase its market share by virtue of its product R & D and manufacturing advantages in the future.
The recovery of overseas demand and the relief of shipping pressure help the company’s products go to sea
The company’s export business is the main source of income. The shortage of shipping capacity in 2021 has a negative impact on the export of products. In the future, with the recovery of overseas market demand for the company’s lighting products, the relief of shipping pressure and the decline of shipping costs, the company will usher in a performance inflection point, and the products are expected to accelerate to sea.
Pay equal attention to both endogenous and extension, and the company continues to layout its vehicle business
The product R & D and production experience accumulated by the company in the field of general lighting has laid the foundation for the company to enter the vehicle business. The company’s on-board business is mainly divided into two parts: lamp controller (LDM) and battery management system (BMS). Among them, LDM business achieved a revenue of 90 million yuan in 2020 and continued to break through the orders of Japanese head main engine manufacturers; BMS business has made significant progress this year, and has won the fixed point of Wanxiang 123 project, the leader of power battery, which mainly supplies German head automobile brands. At the same time, the company acquired Shanghai liangqin and Wuhan liangxinpeng and established a subsidiary to obtain Bangzhi control, so as to comprehensively strengthen the industrial resource layout in the field of vehicle business.
Investment advice and profit forecast
The leading position of general lighting was consolidated, and the vehicle business continued to contribute revenue. In the future, with the acceleration of the company’s lighting products to the sea and the mass production of on-board controller products, the company is expected to usher in the continuous growth of performance. We estimate that the operating revenue of the company from 2021 to 2023 will be RMB 5.076 billion / RMB 6.050 billion / RMB 6.966 billion respectively, with a year-on-year increase of 12.61% / 19.19% / 15.14%. From 2021 to 2023, the net profit attributable to the parent company was 388 million yuan / 491 million yuan / 733 million yuan respectively, with a year-on-year increase of 13.40% / 26.57% / 49.28%. The corresponding EPS from 2021 to 2023 are 0.80/1.01/1.50 respectively, and the corresponding PE of the current stock price are 21.5/17.0/11.4 times respectively. The “buy” rating is given for the first time.
Risk statement
LED market competition intensifies risk, shipping cost fluctuation risk, and vehicle project landing is less than expected risk
