Zhejiang Shuanghuan Driveline Co.Ltd(002472) (002472)
Event: the company released the performance forecast for 2021, and it is expected to realize the net profit attributable to the parent company of 316 million yuan – 336 million yuan, an increase of 516.82% – 555.85% over the same period of last year. Comments are as follows:
The electrification of vehicles drives the high growth of the company’s performance, and the annual performance is in line with expectations: the company is expected to achieve a scale net profit of 316-336 million yuan in the whole year, and the corresponding net profit attributable to the parent in 2021q4 is expected to be 89.46 million-109.46 million yuan, taking the median value of 99.46 million yuan, an increase of 1.1% over 2021q3 and 172.4% over 2020q4. It is basically consistent with our expectation. Benefiting from the trend of automobile electrification, the company’s production and sales scale of high-precision gears has increased and its profitability has been continuously improved.
Electrification accelerates the trend of gear Outsourcing: the difference between the characteristics of motor and engine leads to obvious changes in the transmission system of electric vehicle. Electrification has a great impact on the supply mode of gear industry, and the supply of gear industry has changed from “self-made” to “outsourcing”. The company focuses on the R & D and production of high-precision gears. Thanks to this trend, many high-quality projects of the company have entered the rapid climbing stage, and the capacity of strategic layout has been gradually released.
In the heavy asset industry, the scale effect gradually appears: in the company’s asset structure, fixed assets account for a relatively high proportion, and the capacity utilization rate will effectively reduce the unit fixed cost. With the continuous large-scale production of the company in the field of new energy vehicles, the scale effect began to appear. In terms of profitability, due to the continuous improvement of capacity utilization, the company’s net profit margin in a single quarter gradually improved, and the net profit margin in 2021q3 increased to 7.16%, the highest in a single quarter in recent three years. We believe that with the acceleration of the wave of electric vehicles, the company’s sales of high-precision gears are expected to continue to improve, and there is still room for improvement in profitability.
Zhejiang Shuanghuan Driveline Co.Ltd(002472) the technical strength in high-precision gears has been recognized by customers at home and abroad: after years of research and development, the company has become the gear supplier of ZF, the world’s top gearbox enterprise. In the field of electric vehicles, the company has cooperated with BorgWarner, Byd Company Limited(002594) , Weibang, etc. Recently, the company obtained the new energy vehicle gear order of the global automobile enterprise stellantis group, which once again demonstrated the company’s technical strength.
Profit forecast and investment rating of the company: with the acceleration of global electrification trend, the company is expected to become a core global gear supplier with strong technology and capacity reserves. Optimistic about the future development prospects of the company, we expect the net profit of the company from 2021 to 2023 to be 310 million yuan, 490 million yuan and 650 million yuan, and EPS to be 0.46, 0.73 and 0.96 yuan. According to the closing price on January 5, 2022, the PE values are 57, 36 and 27 times respectively, maintaining the “strongly recommended” rating.
Risk tip: the company’s new product promotion is not as expected, and the development of new energy vehicle industry is not as expected
