\u3000\u3 Bohai Water Industry Co.Ltd(000605) 133 Jiangsu Rongtai Industry Co.Ltd(605133) )
The company is a high-quality supplier of automotive aluminum alloy precision die castings. The company has been engaged in aluminum die castings for more than 20 years, and its main products include aluminum alloy precision die castings such as automobile steering system, transmission system and braking system. The company's main customers are international well-known auto parts Tier1. Its end customers include Chinese well-known auto enterprises and have a deep cooperative relationship with Volkswagen.
Turning to business is an important support for the company's performance, and the market share is expected to be further improved. The business revenue of steering system parts accounts for more than 60%, among which the electric power steering gear (EPS) shell is the dominant product. In 2021h1, this product has a share of more than 20% in China's passenger car market and is in a leading position. EPS shell is an important safety part with high technical barriers, and it is universal on new energy vehicles and traditional fuel vehicles. The company has been deeply engaged in this field for many years, and its end customers include mainstream car enterprises such as Volkswagen, GM, Mercedes Benz, BMW, Geely, Volvo and Honda. In the future, it is expected to obtain more orders from potential customers with obvious technical advantages and strong cost control ability. Leon Rongtai, a subsidiary located in Mexico, meets the procurement demand of North American automobile enterprises reaching 75% of the origin standard, and will gradually undertake the company's business in North America, which will help to further improve its global share of EPS shell.
Increase the volume of new energy business and open up new space for growth. The Shanxi Guoxin Energy Corporation Limited(600617) industry in China is developing rapidly, and the relevant aluminum die casting products for electric vehicles are still in the process of upgrading and changing, which puts forward higher requirements for the development ability (capital + Technology) of suppliers, and is reshaping the pattern of aluminum die casting industry. The company actively increases the development of new energy vehicle products, and the mastered die-casting process can expand to the category of new energy vehicle parts and structural parts. At present, it has made a breakthrough in motors, batteries and electronic control parts. In addition to relying on the original Tier1 customers to expand new energy products, the company also received direct supply orders from Byd Company Limited(002594) . In order to match the growing business demand, the company is also accelerating the construction of corresponding production capacity. After completion, the production capacity of 1.48 million new energy vehicle parts will be added.
Profit forecast and investment rating: we are optimistic about the continuous improvement of the market share of the company's steering system products and the incremental contribution of new energy business. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 130, 180 and 270 million yuan respectively, and the corresponding EPS will be 0.80, 1.12 and 1.67 yuan respectively. The closing price on April 12, 2022 corresponds to the PE value from 2021 to 2023, which is 21, 15 and 10 times respectively. "Recommended" rating for the first coverage.
Risk warning: the production and sales of passenger cars are less than expected due to the epidemic situation and lack of core; Price rise of upstream raw materials; The construction progress of new production capacity is less than expected; The expansion of new energy orders was less than expected.
