Demand side: 1) global connector: looking back on 2021, with the restart of the global economy and the superposition of a series of economic stimulus measures of various countries, the connector industry is growing rapidly. It is expected that the global connector sales will increase by 24% ~ 25% year-on-year in 2021, Industry BB value (order / shipment) reached 114 million yuan, delivery cycle reached 13 weeks, and the industry boom reached a new high. Looking forward to 2022, it is expected that the global connector sales will increase by 7% ~ 8% in 2022. 2) automobile connector: looking back to 2021, thanks to the acceleration of automobile electrification and intelligence, China's high-voltage connector and high-speed connector market reached 6.63 billion yuan, an increase of 141% and 81% respectively. Looking forward to 2022, China's high-voltage connector market is expected to increase by 141% and 81% The market of connectors and high-speed connectors reached 9.4 billion yuan and 5.5 billion yuan, an increase of 43% and 55% respectively. It is estimated that in 2025, China's high-voltage connector and high-speed connector market will reach 20.6 billion yuan and 12 billion yuan, and the five-year CAGR will be 50% and 46%. In the long term, China's high-voltage connector and high-speed connector market will reach 51.5 billion yuan and 24 billion yuan.
Supply side: 1) global connector: in 2019, the top 10 global automobile connector manufacturers were mainly American and Japanese enterprises, with CR10 reaching 61%. 2) Automobile connector: ① in 2019, the top 10 global automobile connector manufacturers were mainly American and Japanese enterprises, and the total market share of Tyco, Yazaki and ambofu reached 67%. Enterprises in the United States, Japan and Europe accounted for 41%, 30% and 16%. China accounts for 30% of the global automobile demand, but the proportion of Chinese enterprises in the automobile connector market is less than 5%. There is a large gap between China's automobile industry and connector industry and overseas. ② We estimate that in 2020, the localization rate of low-voltage connectors, high-voltage connectors and high-speed connectors in China will be 5%, 25% and 5%, respectively. In the long run, we believe that Chinese enterprises have high-quality product performance, better R & D speed, better service capacity and lower comprehensive cost, and are expected to gain more market share in the future. In addition, thanks to the changes in the competition pattern of vehicle manufacturers, connector enterprises binding high-quality customers have obtained growth opportunities. Different from the time gap of low-voltage connectors, high-voltage and high-speed industries are developing synchronously at home and abroad, the technology gap is small, and the improvement of localization rate is expected to accelerate. ③ Automotive connectors have strict requirements, high technical barriers and customer barriers, obvious first mover advantages in the industry, and enterprises binding high-quality customers have better growth.
Cost side: 1) we estimate that copper / copper alloy and plastic account for about 19% and 13% of the cost of connectors. In 2021, the prices of bulk commodities such as copper and oil rose sharply, with copper prices up 50% and oil prices up 70% year-on-year. Overseas enterprises with strong bargaining power have raised their prices, while Chinese enterprises are generally under pressure on their profit margins. We believe that in 2022, with the stabilization of commodity prices and the superposition of the midstream, the pressure of price rise will be gradually transmitted to the downstream, and the profit margin of Chinese enterprises will stabilize and recover. 2) At present, the supply of high-end copper alloy strip used for connectors is mainly dominated by overseas. We believe that with the rise of Chinese connector enterprises, the localization rate of high-end copper alloy strip of upstream raw materials has accelerated.
Financial side: 1) from the third quarter of 2021, Suzhou Recodeal Interconnect System Co.Ltd(688800) revenue and net profit attributable to the parent company increased by 64% and 95% at the same time, which is a leading industry listed company, mainly due to the highest proportion of the company's new energy vehicle business and the rapid volume of on-board high-quality customers. 2) From the first three quarters of 2021, the Dongguan Dingtong Precision Metal Co.Ltd(688668) revenue and net profit attributable to the parent company of upstream connector parts suppliers increased by 53% and 59%, leading the listed companies in the industry, reflecting the high outlook of the connector industry this year.
Investment advice
Industry strategy: looking forward to 2022, we are optimistic about the investment opportunities in the vehicle connector industry with rapid demand growth, accelerated domestic substitution and profit margin repair.
Recommended combination: be optimistic about the leader of high-voltage connector ( Avic Jonhon Optronic Technology Co.Ltd(002179) , Suzhou Recodeal Interconnect System Co.Ltd(688800) ), the leader of high-speed connector ( Electric Connector Technology Co.Ltd(300679) ), Luxshare Precision Industry Co.Ltd(002475) , Ningbo Boway Alloy Material Co.Ltd(601137) (high-end copper alloy faucet).
Risk tip: the penetration rate of new energy vehicles is lower than expected, the penetration rate of auxiliary driving is lower than expected, the production capacity is lower than expected, and the industry competition intensifies the risk.
