\u3000\u3 Shengda Resources Co.Ltd(000603) 197 Shanghai Baolong Automotive Corporation(603197) )
Investment logic
Automotive electronics: TPMS joint venture platform integration landing, significantly improve profitability. The company has established a joint venture subsidiary with Hoff to become the third largest TPMS supplier in the world, give full play to the synergy advantages of technology and customers, and increase the proportion of rear decoration (the price is about three times that of front decoration). At present, the operating efficiency of subsidiaries has been greatly improved. 21q1-3, the net profit attributable to the parent company was + 60% year-on-year, significantly higher than the year-on-year growth rate of revenue (23%).
Empty spring: the trend of standard configuration is clear, and the scarcity ensures the growth of the company. In the future, with the lower cost of core components and the upper configuration of Chinese models, the air suspension penetration rate is expected to continue to increase. The air spring needs to complete more than 4 million fatigue conformance tests, which has high technical barriers, and the supplier needs to design the chassis in cooperation with the main engine factory, so it is difficult to replace the supplier in the later stage. As a scarce air spring supplier, the company is expected to benefit from the acceleration of domestic replacement of air suspension and large-scale mass production to improve the profit margin. We estimate that the company's gross profit of air suspension in 22-23 years will be 84 million yuan and 178 million yuan respectively, with a year-on-year growth rate of 29% and 31% respectively.
Automotive Intelligence: layout sensor + ADAS, open the space for future development. 1) Sensor: at present, there is a shortage of chips and the supply of foreign suppliers is tight. The company has rich product categories, and has strategic cooperation with Chinese chip enterprises + independent research and development to ensure chip supply, which is expected to replace foreign capital. 2) Adas: at present, the company's products mainly include millimeter wave radar and camera, which fully benefit from the penetration of intelligent driving. We estimate that the company's ADAS revenue in 22-23 years will be 150 million yuan and 350 million yuan respectively, with a year-on-year growth rate of 18% and 20%.
Good price and freight transmission mechanism, with little influence from external factors. At present, the price of raw materials and freight continue to rise, which mainly affects the company's traditional business. As a leader, the company has strong bargaining power and has established a good transmission mechanism of raw material price and freight with customers, with little influence from external factors. In addition, the company will issue 42 million additional shares and raise about 900 million yuan to invest in vehicle sensors and supplement working capital.
Investment advice
As a scarce air spring supplier in China, the company is expected to fully benefit from the acceleration of air suspension penetration by virtue of high technical barriers; At the same time, expand sensor + ADAS and enjoy the growth of industry space brought by the accelerated penetration of intelligent driving. In addition, the company repaired the profitability of overseas business through fine management. Therefore, we expect the net profit of the company to be 290 million yuan, 340 million yuan and 450 million yuan respectively in 21-23 years, and give the company 44 times of Pe2 in 2022, with a target market value of 15.1 billion yuan and a target price of 73 yuan / share.
Risk tips
Car sales outside China were lower than expected; The localization progress of air suspension and other parts is less than expected; The company's customer expansion is less than expected; The improvement of the company's overseas business is less than expected; RMB exchange rate fluctuation risk.
