\u3000\u3 Shengda Resources Co.Ltd(000603) 596 Bethel Automotive Safety Systems Co.Ltd(603596) )
The braking system is one of the most technically difficult parts of all auto parts. At present, overseas manufacturers still have an absolute advantage: the braking system is closely related to the life safety of drivers and passengers because it involves the braking control of the whole vehicle. The products involve electromechanical and hydraulic related disciplines such as electronic control, algorithms to deal with different road conditions, hydraulic circuit control and so on, which has extremely high technical barriers, At the same time, it has high requirements for product maturity and stability. In the development process of the automobile industry, the products of overseas brake system parts companies and international vehicle companies have been verified for many years. The products are mature and stable, have large shipments, and also have certain cost-effective advantages. At present, overseas manufacturers have a great advantage in the Chinese market.
With the continuous improvement of the technology and capability of Chinese companies, the superimposed lack of core gives Chinese brake manufacturers a good opportunity for development. At present, the localization progress of brake products is remarkable: with the overall improvement of the technical capability of Chinese auto parts industry companies, domestic suppliers led by Bethel Automotive Safety Systems Co.Ltd(603596) have gradually developed ABS, ESC, linear control system and other electronic control brake system products. The industry core shortage incident since last year has made China’s main engine manufacturers aware of the importance of expanding local suppliers. At present, the localization progress of China’s brake system parts has begun to accelerate, giving a better development opportunity for the brake system parts company.
The company is the leading company of chassis system. From mechanical parts to electric control parts, the company has strong R & D ability and strong endogenous growth power: in the historical development process of the company, it was first engaged in the sales of mechanical braking parts and components, and then entered the chassis lightweight product business from chassis mechanical parts. EPB and ABS products of the company’s electronic control products were mass produced in 2012, and then the line control products in 2021 and ADAS assisted driving products are expected to be mass produced in 2022. The products are constantly updated and iterated, and the complexity is significantly improved, showing the strong driving force of the company’s endogenous growth.
The cooperation between wire controlled braking system and intelligent driving products is expected to create the company’s second and third growth curves: the company has determined the technical route of one box from the beginning of the research and development of wire controlled braking system, showing a forward-looking judgment on the future technical route. Benefiting from the development of intelligent driving and new energy vehicles, the penetration rate of wire controlled braking system and intelligent driving is expected to increase rapidly. At the same time, the intelligent driving system needs to call the brake by wire system in the process of vehicle control. In the future, the company’s brake by wire system products and intelligent driving products are expected to cooperate to achieve the effect of 1 + 1 2 and jointly create the company’s second and third growth curves.
The management has rich working experience in overseas and large companies, and based on the local market, it is expected to go to the world in the future: Yuan Yongbin, the founder of the company, and Yan Shifu, the new general manager of the company, have long working experience in overseas or large companies. At the same time, in the process of continuous development, the company has accumulated front-line main engine factory customers outside China, such as GM, Ford, great wall, Byd Company Limited(002594) and so on, With the continuous improvement of the company’s product line and the continuous improvement of its technical ability, we believe that the company is expected to gain greater local market share and go overseas to become the head company of chassis system in the future.
Investment suggestion: we believe that the company has strong R & D ability and leading technology advantage in China’s braking field. Considering the significant progress of localization of braking products, the penetration rate of intelligent driving will increase in the future, the company has abundant orders on hand, and there is a great possibility of revenue growth in the future. We estimate that the company’s revenue from 2021 to 2023 will be 3.598 billion yuan, 4.605 billion yuan and 5.977 billion yuan, and the net profit attributable to the parent company will be 557 million yuan, 721 million yuan and 983 million yuan. We will give the company a PE valuation of 50 times the net profit attributable to the parent company in 2022, with a target market value of 36 billion yuan. It will be covered for the first time and given an investment rating of “buy”.
The risk that the company’s inventory is less than the expected growth of new energy and technology, and the risk that the company’s inventory is less than the expected growth of new energy and accounts receivable is not increased, and the risk that the company’s inventory is less than the expected growth of new energy and technology, and the risk of recovery of new automobile products is not certain.
