\u3000\u3 Shengda Resources Co.Ltd(000603) 129 Zhejiang Cfmoto Power Co.Ltd(603129) )
Event overview
On March 20, 2022, in the moto3 group of MotoGP Indonesia in 2022, driver tatay of cfmotoraging team 99 started from the pole position and finally won the third place, winning the first moto3 podium for the Chinese team.
Analysis and judgment:
Won the third place in international events for the first time and improved the global brand power
Founded in 1949, MotoGP is the oldest and top motorcycle world championship. It holds more than 20 races in 16 countries / regions on five continents every year, bringing together world-class car factories such as Honda and Yamaha. MotoGP is divided into three groups: public upgraded MotoGP, 765cc Moto2 and 250cc moto3.
In 2022, CFMOTO became the first Chinese motorcycle manufacturer to participate in moto3250cc level events in China, competing on the same stage with Honda, KTM, etc. In the Indonesia race, tatay, driver of cfmotoring team 99, won the third place and the first moto3 podium for the Chinese team; No. 43 driver Artigas finally finished sixth.
We believe that: 1) from civilian use to competition, the technical ability of spring breeze in frame and adjustment has been comparable to that of global head motorcycle enterprises; 2) International top motorcycle events help to enhance the brand power of spring breeze in the global market.
Medium and large row motorcycles lead consumption upgrading, and two rounds of overseas have become a new growth point
Motorcycle sales volume and performance contribution have increased rapidly. Since 2020, the company has deeply explored the incremental field, and heavy-duty models continue to catalyze:
1) imitation race: 250sr continues to sell well, and 450sr will be launched in 2022 to meet the upgrading and replacement needs of the original 250sr owners;
2) retro streetcar: 250cl-x and 700cl-x effectively complement the short board of the model pedigree;
3) adventure vehicle: domestic maximum displacement adv model 800mt, another popular model with large displacement;
4) public upgrade: the first domestic public upgrade model cf1250 improves the brand value and product price range of CFMOTO;
5) joint venture sector: joint venture with KTM to produce models of KTM and Husqvarna brands, forming a high, medium and low matching with CFMOTO brand.
Looking forward to 2022, two rounds of spring breeze suggestions focus on two aspects:
1) domestic sales: the imitation race new car 450sr was listed in the catalogue of the Ministry of industry and information technology in March. It is expected to be listed from the end of May to June, with a maximum power of 37.0kw and a maximum speed of 190km / h. compared with the ninja400 in Kawasaki, it is expected to effectively undertake the upgrading and replacement needs of the original 250sr owners, and it is likely to become a popular model;
2) export: from 2021, after the four rounds of overseas market position has been gradually consolidated, the two rounds are also expected to expand to the overseas market. The export of 250cc (including) and above in the whole year of 2021 and from January to February of 2022 are + 227% and + 229% respectively year-on-year, gradually forming two rounds of overseas new growth poles.
The leading position of all terrain vehicle export is stable, and we will deeply explore the American market
The company is the first all terrain vehicle manufacturer in China and the seventh largest all terrain vehicle manufacturer in the world. The all terrain vehicle export volume of 2021h1 company accounts for 69.4% of the national export volume, ranks first in many European developed countries, and its export leading position is stable. According to the data of China Automobile Association, the company's four-wheel export achieved 165000 vehicles in 2021, with a year-on-year increase of 126.6%, mainly benefiting from the growth of the global four-wheel market catalyzed by the epidemic and the increase of the company's market share in Europe and North America. Among them, the market share in Europe is expected to increase to 30% in 2021 and that in North America is expected to increase to 5%.
The United States is the world's largest all terrain vehicle market. In recent years, the company has concentrated resources to explore the American market. Looking forward to 2022, the company's four rounds of exports to North America are still the largest potential growth point. Considering the low terminal inventory, the interest rate increase in North America is in line with expectations and the company's North American channel development, it is expected that the company's North American market share can be increased to 10 +% in 2022, and the overall export of four rounds of the whole year is expected to achieve 240000 vehicles, with a year-on-year increase of 50 +%.
The short-term profit side is affected by tariffs and shipping to a certain extent. It is expected to gradually improve from 2022q2:
1) due to the influence of the international situation on the tariff side, the uncertainty of exemption is strong. The company actively plans to build factories overseas. On December 1, 2021, the first ATV vehicle in the Thai factory was offline;
2) the impact of the global epidemic at the shipping end is slowing down, and it is expected to gradually decline from 2022q2. In the future, if the tariff is successfully exempted and the elasticity of freight reduction is considered, the profits are expected to increase by 300 / 400 + million yuan from 2022 to 2023 respectively.
Investment advice
The company's medium and large displacement motorcycle business benefited from the launch of popular models and market expansion, and the sales volume continued to rise; The all terrain vehicle business has deeply tapped the potential of the U.S. market, and its leading position in export has been continuously strengthened; Zeeho Electric brand is complementary to CFMOTO brand according to the demand of scientific and technological travel. Maintaining the profit forecast, it is estimated that the company's revenue from 2021 to 2023 will be RMB 8.14/122.2/15.38 billion, and the net profit attributable to the parent company will be RMB 4648021119 million, eps3.4% 09 / 5.34/7.45 yuan, corresponding to the closing price of 110.72 yuan / share on March 18, 2022, PE 36 / 21 / 15 times respectively, maintaining the "buy" rating.
Risk tips
The tightening of motorcycle ban and restriction policies has led to the decline of motorcycle demand in China; Foreign brands lead to intensified market competition; Sea freight continued to rise.
