\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 87 Anhui Zhongding Sealing Parts Co.Ltd(000887) )
Event: on March 3 and 7, 2022, the company successively announced that AMK (Anhui) automobile electric drive Co., Ltd., a subsidiary of AMK China, recently received a customer notice that the company has become a batch supplier of air supply unit assembly products for air suspension system of a new platform project of a head independent brand main engine factory in China. The life cycle of the project is 5 years, and the total amount is about 296 million yuan.
The localization of air suspension continues to make efforts, and the company is expected to become a supplier of chassis platform. 1) Air suspension: AMK of the company is leading in the field of air supply unit technology and is accelerating the localization of air supply unit. According to the company’s announcement, since 2020, the cumulative orders of domestic projects of air supply units have reached 2.485 billion yuan. Relying on the advantages of rubber business, the company is expected to mass produce air spring parts this year, and the value of supporting air suspension hardware will be greatly improved in the future. We predict that in 2025, the air suspension is expected to expand to 200000 price belt models, the market scale of China’s air suspension is more than 20 billion, and the company’s market share is expected to reach 40%, fully benefiting from the growth space of the industry. 2) Thermal management pipeline: the company acquired TFH from Germany in 2017. It has the exclusive production technology of automatic forming pipeline and can provide the whole vehicle thermal management pipeline assembly scheme. According to the announcement of the company, the cumulative orders of domestic projects have reached 5.343 billion since 2020; 3) Chassis lightweight: the company is a scarce supplier of ball joint hinge assembly in China. As the core component of chassis, it has high technical barriers and low localization rate. According to the company’s announcement, the cumulative orders of domestic projects have reached 4.273 billion yuan since 2020.
Rubber business contributes to stable revenue. The company started with seal products, gained leading technology through overseas mergers and acquisitions, and achieved full coverage of European, American and Japanese markets. In recent years, the company has focused on developing the demand in the field of new energy vehicles and successively obtained the project fixed point of mainstream vehicle enterprises. Rubber parts business is the performance base of the company and will contribute stable revenue to the company.
Investment suggestion: the company is expected to realize a net profit attributable to the parent company of RMB 1.049/12.78/1.546 billion from 2021 to 23, corresponding to EPS of RMB 0.80/0.97/1.17/share and PE of 19.4/15.9/13.2 times from 2021 to 2023. Maintain the “buy” rating.
Risk tip: the car sales volume is lower than expected; Risk of rising raw material costs; Goodwill impairment risk.
