\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 799 Changzhou Xingyu Automotive Lighting Systems Co.Ltd(601799) )
Event: it was announced on March 9 that the company was in good condition from January to February 2022. After preliminary accounting, the company achieved a year-on-year increase of about 25% in operating revenue; The net profit attributable to shareholders of listed companies increased by about 5% year-on-year. The operation of the company is normal and all work is carried out in an orderly manner.
The company’s revenue from January to February is bright, and cost factors put pressure on profits. 1) The company’s revenue grew brightly. From the cumulative wholesale volume from January to February, the sales volume of FAW Volkswagen / FAW Toyota / Hongqi / GAC Toyota among the company’s important customers were 312000 / 127000 / 64000 / 150000 respectively, with a year-on-year increase of – 7.2% / – 4.0% / + 40% / + 14.2% respectively. The year-on-year growth (+ 25%) of the company’s revenue is higher than the performance of customers’ batch sales. We believe that the series Growth Logic of the company’s project upgrading (gradually seizing the high-end model projects among customers), product upgrading (gradually increasing the proportion of new products such as ADB) and customer expansion (new forces, BBA and other customer development) is still being fulfilled; 2) External factors exert short-term pressure on profits. In the first quarter of 2022, chip supply pressure still exists, and bulk raw materials are still at a high level, which is further stimulated by the conflict between Russia and Ukraine. We believe that the pressure on the cost side of the company is still large. Further considering the high base effect brought by 1q21’s net profit growth (+ 72.4%) far exceeding the revenue growth (+ 51.8%), we believe that the company’s profit growth is in line with expectations.
With sufficient order reserves and forward-looking technical layout, we are optimistic about the sustainability of the company’s growth. 1) Abundant orders: as of the semi annual report of 2021, the company has undertaken the lamp development projects of 27 models and batch produced 31 new models; 2) Leading technology: in February 2022, the company signed a letter of intent with Huawei on intelligent vehicle light business, covering other businesses from intelligent lamps to intelligent vehicle light. In 2021, the company successfully developed two kinds of pixel headlamps (DMD scheme & microled scheme), which successfully solved various technical problems such as imaging optics, electronic drive and heat management. At the same time, the company set up Xingyu Shanghai R & D center to further improve talent recruitment; 3) Continuous capacity expansion: in 2021, phase I and phase II projects of the company’s Intelligent Manufacturing Industrial Park have been put into operation, and phase III projects have been completed. The mold and electronic factories in the intelligent manufacturing industrial park have been started with 2h21.
Intelligent lamps are an important part of intelligent vehicles. At present, there is still room for LED lamp penetration. The large-scale application of ADB headlights is imminent, and pixel headlights and other technologies are gradually mature. We believe that Xingyu will fully benefit from the development of the lamp industry based on customers and technical reserves.
Investment suggestion: we expect the company to achieve operating revenue of 8 billion yuan, 10.36 billion yuan and 12.44 billion yuan in 2021, 2022 and 2023, corresponding to net profit attributable to the parent company of 1.06 billion yuan, 1.5 billion yuan and 1.9 billion yuan. Based on today’s closing price, PE is 34.2 times, 24.2 times and 19.1 times, maintaining the rating and giving a “buy” rating.
Risk tip: the conflict between Russia and Ukraine exceeded expectations, the mitigation of chip shortage was less than expected, and the rise of raw material costs exceeded expectations
