L3+ automatic driving vehicle standard vehicle integrated navigation is expected to become a major trend: China L3+ L3+ automatic driving vehicle, such as Xiaopeng P7 and Wei Lai ET7, uses the integrated navigation vehicle (navigation GNSS+ inertial navigation IMU) to achieve high-precision positioning. Vehicle integrated navigation is a satellite positioning system that relies on receiving satellite signals to position navigation, and does not rely on external information. The inertial positioning system which can work independently is integrated. It has the advantages of high positioning accuracy, multi scene applicability and high reliability. We believe that L3+ automatic driving vehicle equipped vehicle integrated navigation is expected to become a major trend.
By 2025, the market scale of the global vehicle integrated navigation industry is expected to reach 14 billion yuan, and the CAGR from 2021 to 2025 will reach 43%. According to our calculation, the market scale of the global and Chinese vehicle integrated navigation will be about 33 / 1 billion yuan respectively in 2021; By 2025, the market scale of vehicle integrated navigation in the world and China will be about 14 / 5.7 billion yuan respectively, and the CAGR from 2021 to 2025 will be 43% / 54% respectively;
FuPan Haikang, Dahua and Trimble, how to look at the elements of enterprise competition: vehicle integrated navigation is a subdivision track under the traditional satellite positioning industry. The traditional satellite positioning and security industries are ICT industries. The change of “technology + product” runs through all cycles of the industry, while Trimble Both Haikang and Dahua, security companies, are the leaders left after the industry cycle.
Through the resumption, the three have the same development path: enter the market with the breakthrough of technology, obtain the first mover advantage → change of technology + products, transform to a solution provider, continuously expand new customers while improving product ASP → digital transformation, develop in the direction of AI cloud, and the enterprise gradually becomes a platform.
There are two key reasons for the success of the three: 1) excellent track: the track of satellite positioning and security industry is long enough, the downstream demand is non standardized, the product has the opportunity of rapid iteration (hardware → complete solution → software and service), and the leader can continuously improve the ASP of the product; 2) Company level: build barriers between technology and scale – continuous R & D investment and scale bring technology leadership and cost leadership, so that products can realize rapid iteration; Foresight and strong execution of the management – foresight is manifested in accurate layout, and strong execution is the key to completing the breakthrough of upstream and downstream.
Compared with the security industry and traditional satellite positioning industry, the vehicle integrated navigation industry has many similarities: 1) high barriers to entry; 2) The demand difference of downstream car enterprises / models + large domestic substitution space of upstream device layer, and “positioning technology + integrated navigation products” have the opportunity of rapid iteration;
Combined with the successful experience of the three leading enterprises, how to look at the competitive elements of enterprises: 1) have the ability of development and mass production; 2) Key customers; 3) Technology + product iteration to reduce cost and keep up with downstream requirements.
Investment suggestion: Chinese vehicle integrated navigation manufacturers can be roughly divided into two categories – manufacturers that cut into the vehicle field in the traditional satellite positioning field (such as Shanghai Huace Navigation Technology Ltd(300627) , Guangzhou Hi-Target Navigation Tech Co.Ltd(300177) , Chihiro position) and “allincar” vehicle positioning and navigation manufacturers (such as Daoyuan electronics and Beiyun Technology), In these two lines, we are optimistic about Shanghai Huace Navigation Technology Ltd(300627) (development capacity + key customers + GNSS technical advantages + strong executive power of the management) and guided remote electronics (development and mass production capacity + key customers + inertial navigation technology advantages).
Risk warning: the development of L3 + automatic driving is not as expected; The penetration rate of on-board integrated navigation is lower than expected; Upstream raw material price rise risk; The calculation is subjective and for reference only.
