\u3000\u3 Guocheng Mining Co.Ltd(000688) 162 Jee Technology Co.Ltd(688162) )
Investment logic
Intelligent equipment solutions and new energy vehicle electric drive system two wheel drive. Since its establishment in 2005, the company has been deeply engaged in the automotive intelligent equipment industry (mainly including auto body in white production line, powertrain production line, power battery assembly line, etc.); In 2009, it entered the field of electric motor control of new energy vehicles. According to the company’s performance express, the company’s revenue in 2021 was 2.118 billion yuan, a year-on-year increase of + 41.75%; The net profit attributable to the parent company after deduction was 115 million yuan, a year-on-year increase of + 29.81%. The company’s two wheel drive business is highly collaborative and its operation continues to improve.
The increased penetration of new energy vehicles has driven the high growth of equipment business orders of the company. The penetration of Shanxi Guoxin Energy Corporation Limited(600617) vehicles in China has accelerated, and there is an urgent need to rapidly improve the production capacity of complete vehicles, power batteries and motor electronic control. The company’s intelligent equipment business continues to improve. In 2021, the company added 2.989 billion yuan of equipment orders. With the promotion of the double optimization strategy of the company’s product structure and customer structure, we expect the company’s intelligent equipment revenue to be 1.62/3.1 billion yuan from 2021 to 23, with a year-on-year increase of 23% / 36% / 40%.
The company’s incremental electric drive business has sufficient customer reserves and explosive growth in revenue. The electric drive business of the company has been fixed with Anhui Jianghuai Automobile Group Corp.Ltd(600418) , Chery, Jiangling new energy, GAC new energy, Dongfeng Honda, GAC Honda, Vietnam vinfast and other new customers, and has been supplied in batches. In addition, the company’s high-quality customers including Dongfeng Nissan, FAW Volkswagen, Anhui Volkswagen, Weilai automobile and ideal automobile are also actively developing, with rich incremental orders. According to the data of NE era, the company sold about 20200 sets of electric drive systems from January to February 2022, a year-on-year increase of + 134.94%. With the sustained and rapid development of the new energy vehicle industry and the strong demand of the company’s downstream customers, we expect the company’s electric drive business revenue to be RMB 467 / 14.4 / 2.52 billion respectively from 2021 to 23, with a year-on-year increase of 178% / 209% / 75% respectively.
Raise investment projects to solve capacity bottlenecks. On November 10, 2021, the company listed 34.25 million additional shares on the science and innovation board with an IPO of 46 yuan / share, raising a net fund of 1.477 billion yuan, which is mainly used for the industrialization project of new generation electric drive system, the industrialization and upgrading construction project of automobile intelligent equipment, the industrialization construction project of general industrial intelligent equipment, etc. After the raised investment project is put into operation, the annual capacity of the company’s electric drive system is expected to reach 500000 sets / set, and the annual output value of the general industrial intelligent equipment production line will reach 500 million yuan, opening the capacity bottleneck of the company’s growth.
Profit forecast and valuation
It is estimated that the net profit attributable to the parent company in 202123 will be RMB 140 / 250 / 380 million, corresponding to 43 / 24 / 16 times of PE respectively. Referring to the valuation of comparable companies and considering the high growth of the company’s two wheel drive performance, if the company is given 30 times PE in 2022, the reasonable valuation is RMB 7.5 billion and the corresponding share price is RMB 54.65, and the rating of “overweight” is given.
Risk tips
Risks of electric drive system technology and product innovation; Risk of decline in gross profit margin; The risk of revenue decline caused by the dependence of electric drive system business on major customers; Risk of negative cash flow; Risk of sales restriction and lifting.
