\u3000\u3 Bohai Water Industry Co.Ltd(000605) 555 Ningbo Dechang Electrical Machinery Made Co.Ltd(605555) )
Recommendation logic: 1) the vacuum cleaner market is growing steadily. According to gir data, the global sales of wireless vacuum cleaners are expected to reach US $4.57 billion in 2028, and the CAGR is about 11.7% in the seven years from 2021 to 2028; 2) China's Automotive EPS system market continues to expand, and the market scale is expected to reach 34.65 billion yuan in 2026, with CAGR of 6.6 billion yuan in the five years from 2021 to 2026 2%； 3) The product structure of the company's vacuum cleaner business has been continuously optimized, and the key customer TTI has strong strength and stable relationship with the company; The company's personal care business has grown rapidly since 2019, and the key customer hot also has strong strength in the field of personal care; The company has mastered the core technology of EPS and successfully entered the field of Automotive EPS, and the relevant production lines will be in large quantities.
The vacuum cleaner market is growing steadily. Vacuum cleaner products account for the highest proportion of the company's revenue, and its vacuum cleaner market is developing stably. According to Euromonitor statistics, from 2016 to 2021, the global sales volume of vacuum cleaners increased from 120 million units to 150 million units, with CAGR of 4.5% in five years 5%； We expect that with the strengthening of consumer awareness and the improvement of product power, the vacuum cleaner market will continue to grow steadily in the future. According to gir data, the global sales of wireless vacuum cleaners are expected to increase from US $2.12 billion to US $4.57 billion from 2021 to 2028, with a seven-year CAGR of about 11.7%.
The market of EPS system continues to expand and domestic substitution continues. According to the data of Zhiyan consulting, the sales volume of EPS system in China increased from 7.2 million units to more than 18.2 million units from 2013 to 2019, and cagr16.6 million units in six years 7%, the sales volume in the same period increased from 11.17 billion yuan to 27.55 billion yuan, and the six-year cagr16.5 billion yuan 2%。 According to the prediction of Zhiyan consulting, the market scale of China's Automotive EPS system is expected to reach 34.652 billion yuan in 2026, and CAGR will be 6.6 billion yuan in the five years from 2021 to 2026 2%。 At the same time, the proportion of domestic brands of EPS motors in China in 2018 has increased 9pp to about 20% compared with 2010. It is expected that domestic substitution will continue in the future, and Chinese manufacturers will have more opportunities.
Diversified businesses have developed together and their competitiveness has continued to improve. The product structure of the company's vacuum cleaner business has been continuously optimized, the proportion of vacuum cleaners and water machines with high gross profit has continued to increase, and TTI, the company's largest customer of vacuum cleaners, has strong strength, accounting for more than 35% of the market in the United States in 2019. The company's personal care business has developed rapidly. In 2019, the company officially entered the personal care business. In 2020, the scale of the company's personal care business has reached 350 million yuan, with a year-on-year increase of 374.8%, and the proportion of revenue has rapidly increased to 17.1%. Moreover, hot, the largest customer of the company's personal care business, also has many brands and good brand power in the field of personal care. In addition. The company has mastered the core technology of EPS motor and successfully entered the field of EPS motor. The project with an annual output of 3 million EPS automobile motors is about to be expanded.
Profit forecast and investment suggestions. With the gradual operation of the company's raised investment projects, the company's EPS motor business is expected to develop rapidly. In addition, considering the improvement of the company's profitability after the price of raw materials stabilizes, the company's operation is expected to improve steadily. The compound growth rate of the company in the next three years is expected to be 17.8%. With reference to the consistent valuation of comparable companies, the company is given a "hold" rating for the first time.
Risk warning: EPS motor is not put into operation as expected; Risk of sharp fluctuations in raw material prices; RMB exchange rate fluctuation risk; Risk of tariff rate fluctuation.
