\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 799 Changzhou Xingyu Automotive Lighting Systems Co.Ltd(601799) )
Event: in 2021, Xingyu achieved a revenue of 7.91 billion, a year-on-year increase of 8.01%, and the net profit attributable to the parent company was 950 million, a year-on-year decrease of 18.12%.
Under the influence of multiple factors, the performance in 2021 was lower than expected. The growth rate of Xingyu’s revenue in 2021 was only 8%, lower than the market expectation. We believe that the reason is that the output of Xingyu’s core customers FAW Volkswagen and FAW Toyota increased by – 17.3% and 6.4% respectively. In 2021, Xingyu’s comprehensive gross profit margin was 22.08%. If excluding the impact of transportation costs, the comprehensive gross profit margin was 23.22%, a year-on-year decrease of 4.08pct. We believe that the factors with great negative effects are: deterioration of product structure (decrease in the proportion of products with high gross profit margin), increase of labor cost & manufacturing cost and increase of raw material cost. In addition, the management expense rate and R & D expense rate increased by 0.18 and 0.69 PCT respectively over the previous year, mainly due to the increase in the salary of managers and R & D personnel. Quarter by quarter, the revenue of 21q4 was 2.251 billion yuan, a year-on-year decrease of 12.55%, slightly lower than expected. We expect it to be related to the revenue recognition time at the end of the year. The comprehensive gross profit margin of 21q4 (excluding transportation expenses) was 20.4%, with a month on month decrease of 0.59pct and a year-on-year decrease of 8.34pct. It is expected that the main reasons are: the rise of raw material costs (reflected in other income items), product structure, etc.
Breakthroughs have been made in new customers, new technologies and new production capacity. New customers: compared with 2020, new customers in the company’s 2021 annual report: Weilai automobile, Xiaopeng automobile and ideal automobile. New technology: developed in 2021: intelligent headlamp module based on DMD, intelligent headlamp module based on microled, HMI gesture recognition indoor lamp and matrix indoor lamp. New production capacity: 1) Xingyu Intelligent Manufacturing Industrial Park Phase II integrated factory and phase III logistics center project have been officially put into use; 2) The construction of Serbia Xingyu is smooth, and the projects from European main engine plants will enter the batch production stage from 2022. (data source: Annual Report)
The future will continue to improve, and the long-term logic will not change. With the mitigation of the epidemic, the production and sales of FAW Hongqi and FAW Volkswagen in Changchun are expected to recover gradually. In addition, Toyota and Honda will continue to rise. In the second half of the year, the projects of new forces will also be mass produced. Therefore, the company’s revenue and gross profit margin are expected to continue to recover. We are full of confidence in the company’s annual performance. In the long run, the core growth drivers of Xingyu have not changed: 1) the market share has gradually increased globally; 2) The proportion of middle and high-end lamps such as ADB and DLP has gradually increased.
Investment suggestion: maintain the “Buy-A” rating. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 1.33 billion yuan, 1.75 billion yuan and 2.21 billion yuan respectively. Corresponding to the current price, the PE valuation from 2022 to 2024 will be 31.3 times, 23.7 times and 18.8 times respectively. In the next 3-5 years, Xingyu is expected to accelerate its expansion in the world, with high performance and strong growth certainty, maintain the “Buy-A” rating, and the six-month target price is 210 yuan / share.
Risk tip: the sales volume of passenger car industry has fallen sharply; The progress of the new project is lower than expected
