\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 27 Shanghai Huace Navigation Technology Ltd(300627) )
Beidou + 5g tamps the underlying architecture of automatic driving high-precision positioning. After the completion of Beisan networking, China has begun to further promote the process of satellite ground integration, layout the satellite / ground-based enhancement system, and build a more efficient satellite navigation high-precision positioning service network. The goal is to build a more intelligent, versatile and integrated system by 2035. At the same time, the development of 5g technology can further enhance the low delay communication transmission function in the system and enable the information transmission link. Beidou + 5g continues to consolidate the underlying architecture of automatic driving high-precision positioning. At present, the system has the ability of lane high-precision positioning. In 2020, the output value of China Spacesat Co.Ltd(600118) navigation and location services industry reached 403.3 billion yuan, of which the output value of core industries (including chips, devices, algorithms, software, navigation data, terminal equipment, infrastructure, etc.) reached 129.5 billion yuan, accounting for 32.11%. According to the service scenarios, the output value of passenger car related application scenarios has reached 49.2 billion. Combined with the guidance of relevant policies, Beidou continues to be optimistic about the application promotion of automatic driving high-precision positioning.
High precision positioning is an important link to realize automatic driving. In 2025, China's passenger car front loading market will exceed 10 billion.
Mercedes Benz L3 automatic driving has been landing in Germany, which is the only substantive landing L3 scheme at present. It is equipped with on-board sensors such as lidar and camera, as well as high-precision positioning module + high-precision map. We believe that the high-precision positioning module is an important supplement to the sensing end. It can effectively cooperate with on-board sensors and high-precision maps to provide accurate position and posture information of vehicles. It may become the standard configuration of most high-level intelligent networked vehicles in the future. At present, although L3 automatic driving has not been officially implemented in China, the penetration rate of passenger car intelligent network has been increasing, reaching 17.6% in February 2022. We estimate that the space of high-precision positioning terminal in the field of mass production of front loading of supporting passenger cars in the Chinese market is expected to reach 10.85 billion yuan, and the CAGR will reach 77.6% from 2021 to 2025. We expect that with the gradual deduction of high-level automatic driving technology, the ceiling of the industry will be further opened.
Shanghai Huace Navigation Technology Ltd(300627) : enable the automotive intelligent network with accurate space-time information. The company has been deeply engaged in high-precision positioning for more than 20 years, focusing on the two core application fields of Surveying and mapping and geographic information, navigation control and unmanned driving. While providing terminal products and overall solutions, the company has the ability of self-developed chips, and the level of self-control is high. On the basis of steadily promoting the traditional business, the company actively expands the downstream on-board application scenarios. At present, it has entered Nezha and other core host factories, and is expected to continue to expand high-quality host factory customers by virtue of product quality in the future. At the same time, the company actively complies with the policy guidance of "Rural Revitalization" and enables automatic driving of agricultural machinery. At present, more than 20000 farmers in Northeast China, Xinjiang, Inner Mongolia, Jiangsu, Henan, Guangxi and other places have used the company's agricultural machinery automation system for the cultivation of corn, cotton, wheat, rice, sweet vegetables and other crops.
Investment suggestion: we believe that while the company's traditional business is advancing steadily, the follow-up of vehicle business will bring new performance increment to the company. The company has the first mover advantage in the new on-board business, and has entered into the customers of core OEMs. It is expected to rely on the cooperation with key customers to realize the continuous extension of on-board products in other downstream core OEMs and improve the overall market share. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 294 / 393 / 513 million respectively, and the corresponding PE multiple will be 43x / 32x / 24x. We select Guangzhou Hi-Target Navigation Tech Co.Ltd(300177) and Guangzhou Haige Communications Group Incorporated Company(002465) as comparable companies in the same field, and believe that the large-scale volume of satellite custom combination terminals with automatic driving of the company will have high growth. For the first coverage, give a "recommended" rating.
Risk warning: the whole vehicle sales volume is lower than expected; The progress of intelligent networking was not as expected
