Autel Intelligent Technology Corp.Ltd(688208) (688208)
Global automotive intelligent diagnosis industry leader, product line and market expansion. Founded in 2004, the company started with automotive diagnostic products, developed and formed five core systems, which were deeply applied to the company’s main products, established the advantages of the company’s products in compatibility, diagnostic efficiency, diagnostic accuracy, R & D efficiency and use experience, and built a competitive barrier. The performance of the company’s products can be comparable to the first tier manufacturers in the global automotive intelligent diagnosis industry, such as shinaibao and Bosch. In the development process, the company closely follows the development trend of digitization, intelligence and new energy in the automotive industry, focuses on the automotive aftermarket, and constructs a series of Automotive comprehensive diagnosis products TPMS (tire pressure monitoring system) series products, ADAS (advanced driving assistance system) series products and related software cloud services, and launched new energy series solutions in 2021. In terms of market expansion, the company’s sales network has covered North America, Europe, China, Asia Pacific, South America and imea More than 70 countries or regions around the world, including India, the Middle East and Africa, have initially formed an integrated global marketing network. Generally speaking, the top product performance and global sales system in the industry help the company to be a leader in the global automotive intelligent diagnosis industry.
The multi-point flowering of the business line promotes the rapid development of the company. In terms of digitization, the company’s intelligent diagnosis products are iterated and superimposed with the development dividend of the Chinese market, with a good development momentum in the future. In 2020, the company launched the third generation of automotive intelligent diagnosis products. Compared with the second generation products, the performance and function of the third generation products have been significantly improved, and the price has also been greatly improved. The third generation products have been successfully promoted in the North American market and European market, which has become an important driving force for the company’s performance growth. In addition, with the increase of the average age of cars in the Chinese market and the rapid expansion of auto repair chains, the development of China’s third-party maintenance market will accelerate. The company’s diagnostic product business can be expected to develop in China’s third-party maintenance market in the future. In terms of intelligence, the company laid out sensors and grasped the development opportunity of automobile intelligence. According to our estimation, in 2025, the market scale of TPMS sensor will exceed 30 billion yuan, and the market scale of millimeter wave radar will exceed 50 billion yuan. The company’s intelligent product business has great room for development in the future.
Develop a new energy product line to comply with the trend of new energy for automobiles. Automobile new energy is an inevitable trend, and the global sales of new energy vehicles are growing rapidly. A series of tools required for the maintenance of new energy vehicles are different from fuel vehicles, which brings a new vehicle maintenance tool market. The company has grasped the post market pain point of new energy vehicles and launched the new energy integrated product solution of “diagnosis, inspection, charging and storage”, including new energy vehicle diagnostic instrument, battery testing product, charging and discharging motor, lithium battery balance maintenance tester, sealing tester, and new energy charging pile. According to our estimation, the business space of the company’s new energy diagnostic tools is in the order of 10 billion. With the implementation of the company’s charging pile business in the future, it will bring greater imagination space for the development of the company.
Profit forecast and investment suggestions: we expect the company’s EPS from 2021 to 2023 to be 1.12 yuan, 1.64 yuan and 2.37 yuan respectively, and the PE corresponding to the closing price on December 23 are about 71.0, 48.5 and 33.6 times respectively. The company is a leader in the global automotive intelligent diagnosis industry, and belongs to the first echelon of the global automotive intelligent diagnosis industry together with Bosch and snib. The company grasps the development trend of the automotive industry and actively expands its product lines. Many product lines such as automotive intelligent diagnosis tools, TPMS products, ADAS products, software cloud services and new energy products are facing development opportunities. At the same time, the company actively expands the market and has initially established a global marketing network. We are optimistic about the future development of the company and give it a “recommended” rating for the first time.
Risk tips: (1) product iteration is not as expected. Strong product iteration ability is an important part of the company’s product core competitiveness and the key for the company to maintain its product competitive advantage. If the company’s product iteration is not as expected in the future, there will be a risk that the market competitiveness of the company’s products will be reduced and the company’s future development will be affected. (2) The market expansion is not as expected. At present, the company’s sales network has covered more than 70 countries or regions in the world such as North America, Europe, China, Asia Pacific, South America and imea (India, the Middle East and Africa), and has initially formed an integrated global marketing network. However, if the market development of the company’s newly developed regions is not as expected, the expansion of the company’s global marketing system will be affected. (3) The business development of new energy products is not as expected. Following the development trend of new energy in the automotive industry, the company has launched a digital integrated solution of “diagnosis, inspection, charging and storage” for the new energy market. If the future market acceptance of the company’s new energy products is lower than expected, there will be a risk that the business development of the company’s new energy products will not meet the expectations.
