Zhejiang Asia-Pacific Mechanical & Electronic Co.Ltd(002284) (002284)
1、 Event overview
On December 30, 2021, the company announced that: Zhejiang Asia-Pacific Mechanical & Electronic Co.Ltd(002284) recently received a notice of intention from a large automobile group in China. The company will develop and produce ABS control module and G-sensor products as the customer’s parts development and production supplier.
2、 Analysis and judgment
Automotive electronic products have been recognized by their own brands again, and the trend of import substitution has accelerated
The company was again designated as the core automotive electronic product project of its own brand, and the import substitution trend of automotive electronic business accelerated. The company’s existing customers of ABS include Chinese head independent brands such as great wall, Chang’an, Zhengzhou Nissan, Chery, Jiangling and Dongfeng. Among them, the product supply of customers such as great wall, Chang’an and Dongfeng are core models with high-quality customer structure. The company has achieved ABS, ESC, EPB and other core automotive electronic business support in Great Wall Motor Company Limited(601633) . The demonstration effect of head independence and the trend of import substitution localization are expected to drive the company’s electronic products to continue to support mainstream independent and new brands. The single vehicle value of automotive electronic braking products is about 2-3 times that of basic braking. With the expansion of the number of supporting customers, the company’s automotive electronic business revenue is expected to enter a round of rapid growth.
With the layout of automotive electronic products in the whole line, the company is expected to become the “Bosch” in China’s braking field
The full rise of independent brands requires independent and controllable local suppliers. The company’s automotive electronic product line reserves are perfect to meet the braking product needs of the main engine plant in an all-round way. The company continues to increase investment in the R & D of automotive electronic products and has a full set of automotive electronic products such as ABS, EPB, ESC and IBS. At present, the company has carried out close cooperation with FAW, Dongfeng, great wall, SAIC, Geely, Chang’an and other main engine manufacturers. Under the general trend of the overall rise of independent brands, the company is expected to significantly increase its share in China’s automotive electronics market. The company will achieve “accompanying” growth with independent automobile enterprises and become a “Bosch” in China’s braking field.
3、 Investment advice
It is estimated that the company will achieve a revenue of RMB 3.45/41.9/5.47 billion and a net profit attributable to the parent of RMB 0.70/1.22/199 billion from 2021 to 2023. The current market value corresponds to 105 / 60 / 37 times of PE from 2021 to 2023. The company’s automotive electronic products continue to be in large quantities, and its performance is expected to return to a historical high level. As a leader in China’s braking industry, it is expected to enjoy a valuation premium and maintain the “recommended” rating.
4、 Risk tips:
Raw material price fluctuations lead to low gross profit margin, less than expected new product expansion, exchange rate risk, etc.
