\u3000\u3 Shengda Resources Co.Ltd(000603) 596 Bethel Automotive Safety Systems Co.Ltd(603596) )
Event: it was announced on April 8 that the company plans to purchase 45% shares of Wanda automobile steering machine Co., Ltd. (hereinafter referred to as “Wanda company”) with its own capital of 200 million. The company and Ruizhi Lianneng (Chery technology subsidiary) plan to jointly acquire 65% of the equity of Wanda held by Wanda parts, of which the company acquires 45% of the equity with its own capital of 200 million yuan and Ruizhi Lianneng acquires 20% of the equity with 89.24 million yuan. After the acquisition is completed, Bethel Automotive Safety Systems Co.Ltd(603596) will be consolidated with Wanda.
Wanda company is an enterprise of steering gear and steering column head in China. Founded in 1996, Wanda is a first-class automotive parts supplier specializing in the R & D and production of automotive steering system products in China. The company’s products cover more than 10 series and more than 200 varieties of tubular electric steering gear, electrically adjustable steering column, rack and pinion steering gear, hydraulic power steering gear, steering column and other steering system products. As of 2016, the company has an annual output of 3.2 million sets of steering systems. In 2017, the company ranked 8th and 7th in China in the two major fields of steering gear assembly and components and steering column and components. From January to November in 2020 / 2021, the company achieved revenue of 720 / 750 million yuan and net profit of – 15.76 million / 17.14 million yuan respectively.
Wanda is rich in customer resources, among which the customer resources of Dazhong department are well complementary to the company. Wanda’s main customers are German Volkswagen, Ingersoll Rand, SAIC GM Wuling, Jiangling Motors Corporation Ltd(000550) , Chery, Zhejiang Geely, Shanghai Volkswagen, FAW Volkswagen and other medium and large manufacturers. In addition, the company is accelerating the layout of new energy field. At present, the company has established cooperative relations with BAIC new energy, Great Wall Huaguan, Changjiang motor and other new energy vehicle companies. We believe that the resources of Wanda and Geely will overlap well with the customers of Wanda and Chery.
The application from the executive level to the system level is fully opened, and the intelligent chassis faucet is launched in an all-round way. After merging into Wanda, the company will accelerate the realization of the layout of braking by wire + steering by wire. The company will soon land the three-dimensional layout of intelligent chassis from the executive layer to the application layer. 1) The barriers at the executive level are becoming deeper and deeper Bethel Automotive Safety Systems Co.Ltd(603596) relying on endogenous accumulation, the company has realized the full coverage of disc brake system, ABS, EPB, ESC and wcbs. The company expects to complete wcbs2 in 2022 0 principle prototype development and release, esc620 production, chip alternative design and production; 2) System level applications will be launched soon. In 2022, ADAS will start operation, develop parking / urban condition weekly viewing technology and obtain mass production projects.
Investment suggestion: we expect the company to achieve operating revenue of 4.7 billion yuan, 6.11 billion yuan and 7.37 billion yuan in 2022, 2023 and 2024, corresponding to net profit attributable to the parent company of 670 million yuan, 870 million yuan and 1.14 billion yuan. Calculated at today’s closing price, PE is 36.2 times, 28.0 times and 21.2 times, maintaining the “buy in” rating.
Risk tip: the progress of product development and mass production is less than expected, the rise of raw material costs is more than expected, and the recovery of automobile market demand is less than expected
