\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 87 Anhui Zhongding Sealing Parts Co.Ltd(000887) )
Event overview: on March 7, 2022, the company announced that AMK (Anhui), a Chinese subsidiary of Anhui Zhongding Sealing Parts Co.Ltd(000887) subsidiary of AMK, recently received a notice from customers that the company has become a batch supplier of air supply unit assembly products of air suspension system for 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 of the life cycle is about 52 million yuan.
The localization of air suspension business is accelerated again, and fixed-point frequent landing shows the core competitiveness of products
Air suspension has strong technical barriers, and the threshold of “track” is high. The world’s leading enterprises are mainland China, AMK and Wilbur. In 2016, the company acquired AMK, the supplier of air supply unit head. Based on AMK, the company has fully mastered the core technology of supply unit and control program, and ranks among the global airborne head array. In July 2018, AMK China subsidiary Anhui anmeike was established, set up a technology center in Shanghai, and built a production base in Anhui. The motor production line and the local assembly line of air supply unit were completed in turn, fully realizing localization. Focusing on the strategic goal of “localization promotion, technology iterative upgrading and industrial reinforcement”, the company is expected to accelerate the construction of air suspension assembly manufacturers with the air compressor as the starting point. The company has advanced technical advantages and rich production experience in the field of air suspension business. Its products continue to be recognized by the main engine factory. Now it has obtained orders from Chinese high-quality main engine factories such as Weilai and Dongfeng lantu. Taking the existing core independent brands as the starting point, we continued to optimize the customer structure and accelerated the promotion of the Chinese market. So far, the total orders of the company’s air suspension business in China have reached 2.485 billion yuan.
Taking the air suspension as the core, accelerate the layout of intelligent chassis strategy and comprehensively meet the transformation of Electric Intelligence in the industry. Now, the total amount of fixed-point projects has reached 12.1 billion yuan
The single vehicle value of the company’s traditional automobile damping and sealing rubber business is only a few hundred yuan, the single vehicle value of hollow suspension (intelligent), chassis lightweight assembly (lightweight) and thermal management pipeline assembly (electrification) of intelligent chassis business is tens of thousands of yuan, and the single vehicle value of intelligent chassis business has increased significantly. At present, the company’s traditional business revenue has ranked among the top 100 parts in the world. Large scale brings cost advantages, high-quality customer structure, as well as the in-depth absorption and localization of overseas advanced technology, providing the company with stable cash flow. With the air suspension as the core, the company accelerates the layout of the intelligent chassis strategy, grasps the core technology through high-quality mergers and acquisitions, realizes localization through reverse investment, and has the first mover advantage. It is expected to quickly seize the market in the transition period of electric, intelligent and lightweight industry, and become a global leader in automotive electronic parts. Up to now, the intelligent chassis announced by the company has received a total of 12.001 billion yuan of fixed-point projects in China, including 5.343 billion yuan of thermal management and 4.273 billion yuan of lightweight. The company is expected to double-click on “the company’s performance and price increment” to drive the company’s valuation to increase significantly.
Investment suggestion: it is estimated that the company will achieve a revenue of RMB 13.028/13.715/14.929 billion and a net profit attributable to the parent company of RMB 1.050/11.50/1.388 billion from 2021 to 2023. The current market value corresponds to 18 / 16 / 14 times of PE from 2021 to 2023. With the cyclical recovery of the company’s performance and the continuous promotion of the smart chassis strategy, as a global leading company of parts and components, it is expected to enjoy a valuation premium and maintain the “recommended” rating.
Risk tip: the price fluctuation of raw materials leads to low gross profit margin, less than expected expansion of new products, exchange rate risk, etc.
