\u3000\u3 Shengda Resources Co.Ltd(000603) 319 Hunan Oil Pump Co.Ltd(603319) )
Event: on March 30, 2022, the company issued its annual report for 2021. In 2021, the company achieved an operating revenue of 1.622 billion yuan, a year-on-year increase of 15.08%, and a net profit attributable to shareholders of listed companies of 191 million yuan, a year-on-year increase of 14.35%, accounting for 11.76% of the operating revenue. Comments: the company’s annual performance growth is in line with expectations. Optimistic about the increasing penetration of new energy vehicles, the electronic pump, gearbox pump, motor and EPS control unit of the company and its subsidiaries have been put into mass production and released profits, bringing new growth levels to the performance.
Increase R & D investment, expand production capacity of projects under construction, and promote intelligent manufacturing to reduce costs and increase efficiency. In 2021, the R & D cost was 105 million, with a year-on-year increase of 13.75%. The company strengthened the R & D of new product projects and entered the field of new energy vehicles. Construction in progress increased by 78.56% over the end of the previous year. Three of the four major projects have made progress of 90%. With the gradual implementation of projects under construction, the production capacity is expected to increase significantly. In addition, the company continues to promote intelligent manufacturing, has established more than 40 automatic production lines, and fully implemented APS, MES and other systems to reduce costs and increase efficiency.
The subsidiary has realized the large-scale mass production of EPS control unit of electric power steering system, which has a broad application prospect. Yilida, the actual holding company of the company, is the leader of vehicle EPS in China. Dongjia intelligent, a joint-stock subsidiary of the company, is a leading supplier of EPS control system in China. It has realized the large-scale production of EPS control units and has the large-scale application of more than 5 million vehicles. In terms of intelligent driving and intelligent travel business, Dongjia intelligent’s ECU products equipped with intelligent driving full redundant steering system have been applied in unmanned Airport Ferry and smart city urban street scenes. Meanwhile, Hainan Dongjiang, a joint-stock subsidiary of the company, was approved to start the road test of intelligent vehicles in Hainan Province. Its project vehicles are equipped with L4 adaptive EPS and ECU provided by Dongjia intelligent.
Deepen the development of new products and layout the field of new energy vehicles, bringing new levels of growth. The company has accelerated the layout of the new energy vehicle market and developed a rich product line according to different downstream needs: 1) electronic pumps: in 2021, the company developed the electronic pumps and other projects of Liuzhou Songzhi. At present, such products have well-known customers at home and abroad such as Cummins, Nissan, Byd Company Limited(002594) , SAIC and so on; 2) Automatic transmission pumps: the company has well-known customers at home and abroad such as Toyota Motor (new energy), Volvo, Byd Company Limited(002594) , Zhuzhou CRRC (new energy), and is expected to reach cooperation with Weilai motor, Weima motor and other customers in the future. In 2021, the operating revenue of transmission pump products increased by about 50% year-on-year; 3) Motor: in the second half of 2021, dongxingchang technology, the holding subsidiary of the company, developed motor products on lidar, which have been applied to a new energy vehicle head enterprise in China and won many projects from Chinese head lidar manufacturers. It is expected to enter a large-scale mass production stage in 22 years. In addition, EPS motor has realized the supporting supply of corresponding new energy vehicle models, and downstream customers mainly include Chang’an new energy, Nezha automobile, etc. With the mass production of many customers, the company’s new product market still has a large growth space in the future. Investment suggestion: be optimistic about the growth prospect of the company under the background of increasing the penetration rate of new energy vehicles. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 250 million, 327 million and 426 million yuan, and the target price will be 46.58 yuan, maintaining the “buy” rating.
Risk tips: the penetration rate of new energy vehicles is lower than expected, the capacity expansion is lower than expected, the penetration rate of downstream customers is lower than expected, and the sales volume is lower than expected
