\u3000\u3 Shengda Resources Co.Ltd(000603) 786 Keboda Technology Co.Ltd(603786) )
Matters:
Announcement of the company: the company issued the draft equity incentive plan. The number of restricted shares to be granted in the incentive plan is 4 million shares, accounting for about 1.00% of the total share capital of the company at the time of announcement of the draft incentive plan. The total number of incentive objects granted by the incentive plan shall not exceed 463, including senior managers, middle managers, technical backbone personnel and business backbone personnel who worked in the company (including subsidiaries) when the company announced the incentive plan. The grant price of restricted shares in the incentive plan is 24.60 yuan / share.
Guoxin automobile view: as the scarce target of China's automotive electronics, the company has high-quality customer structure, and its core product lamp controller has strong competitive advantages. In the future, it will benefit from volume increase, price increase and multiple categories, and the medium and long-term growth logic is smooth. On the one hand, this equity incentive scheme will help bind the interests of the team, on the other hand, it will also demonstrate the management's confidence in the future of the company. Taking into account the impact of the epidemic, lack of core, the rise in the price of raw materials and the decline in production and sales of the company's main customer Volkswagen Group, the profit forecast is lowered, and the net profit is expected to be RMB 430 / 6.3 / 850 million in the year 21 / 22 / 23 (the early profit forecast is RMB 540 / 7.9 / 1.07 billion). We give Keboda Technology Co.Ltd(603786) 2530 times PE in 2023, and the updated one-year target price range is 53-64 yuan (89-99 yuan in the previous time). The current stock price of the company still has 24% - 55% room to improve from the target valuation range, maintaining the "buy" investment rating.
Comments:
The draft equity incentive plan was issued to define the bottom line of net profit growth of more than 10% in the next three years
On April 11, 2022, the company released the 2022 restricted stock incentive plan (Draft), which binds the interests of the team and is conducive to long-term development. It is proposed to grant 4 million restricted shares, accounting for about 1.00% of the total share capital of the company at the time of announcement of the draft incentive plan., The total number of incentive objects shall not exceed 463, including senior managers, middle managers, technical backbone personnel and business backbone personnel who worked in the company (including subsidiaries) when the company announced the incentive plan. The award price is 24.60 yuan / share.
Unlocking conditions define the bottom line of performance growth of more than 15% revenue growth and more than 10% net profit growth in the next three years. The assessment year for the release of restricted shares granted by the equity incentive plan is three fiscal years from 2022 to 2024. The performance assessment and release of restricted shares are carried out annually (30%, 30% and 40% are unlocked respectively for three times in the plan), and the assessment is conducted once in each fiscal year. Taking the operating revenue and net profit of 2021 as the performance base, the operating revenue growth rate (a) and net profit growth rate (b) of each year's fixed comparison performance base are assessed, and the sales restriction lifting ratio is calculated according to the coefficients (x) and (y) corresponding to the completion of the above two indicators. The conditions for all unlocking are as follows: Based on the revenue and net profit in 2021, the target revenue in 2022 will increase by 15% and the net profit by 10%; In 2023, the revenue increased by 32% and the net profit increased by 21%; In 2024, the revenue increased by 52% and the net profit increased by 33%.
The target of automotive electronics is scarce, and the products and customers continue to expand
1. Product dimension, and vigorously develop emerging businesses on the basis of maintaining the original business advantages
1) some important new businesses such as national VI emission and USB of commercial vehicles have shown a good momentum of development, realizing a high-speed growth of sales of more than 70% year-on-year (especially the sales of national VI emission products have maintained a growth of more than 150%). It is expected that after the subsequent mass production of emission post-treatment products of commercial vehicles, it is expected to continue to maintain a rapid growth.
2) AGS products have made good progress in expanding new customers. In the first half of the year, a total of 6 new designated projects were obtained from customers. As of the end of June, there were 20 projects under research, and the sales volume of the whole life cycle is expected to be about 10 million. It will inject new momentum into the company's follow-up business development and is expected to bring greater incremental growth to sales in the next few years.
3) the new business development of light control products can be expected. In the second half of the year, important projects under research such as BMW tail light controller, Ford headlamp controller and Renault headlamp controller will be transferred to mass production successively. It is an important milestone for the company to officially enter the global market of BMW, Ford and Renault, which opens new development space for lamp control products and lays a solid foundation for future sales growth.
4) new energy business: the company actively responds to the trend of vehicle electrification and has initially realized the market layout of products covering first-class new energy vehicle enterprises at home and abroad. At present, products such as lamp controller, thermal management actuator, AGS actuator, atmosphere lamp, USB and chassis controller have been designated by new energy vehicle projects such as Porsche, Volkswagen, Geely, Weilai, Xiaopeng, ideal and great wall. On the basis of many well-known customer resources in the world, we will further expand new high-quality customer resources outside China. In the first half of the year, the company's headlamp controller, USB, adaptive suspension controller and other products entered the Shanxi Guoxin Energy Corporation Limited(600617) customer market of FAW Hongqi, Byd Company Limited(002594) and so on. At the same time, the company has successfully passed the review of Toyota's potential supplier system, laying the foundation for entering Toyota's global supplier system in the future.
2. Customer dimension, continuous expansion of customers and sufficient projects under research
In the first half of the year, products including lighting control, motor control, on-board electronics and commercial vehicle emission reduction won 32 new designated projects from customers such as Volkswagen, Porsche, FAW Audi, SAIC GM, Chang'an Ford, Cummins, FAW Hongqi, Weilai, ideal and Chang'an. It is estimated that 20 million products will be sold in the whole life cycle.
By the end of June 2021, there are 113 projects under research, and the sales volume of the whole product life cycle is expected to exceed 168 million, including 12 global platform projects for customers such as BMW, Volkswagen, Porsche, Ford, Renault, PSA and Cummins.
In January 2022, Keboda Technology Co.Ltd(603786) won four honors of Cummins in 2021, including "Cummins China: supplier of the year award", "Foton Cummins: new product development award", "Dongfeng Cummins: best quality award" and "Cummins filter: new product development award" Keboda Technology Co.Ltd(603786) has been paying close attention to the construction of quality culture, adhering to the layered audit, and implementing the principle of quality prevention to continuously improve product quality; Continuously implemented zero defect quality management, kept the ppm of bis failure at 0, reduced the after-sales transfer claim by 36%, maintained the consistent excellent quality performance, and provided a stable quality assurance for Cummins.
Investment suggestion: lower the profit forecast and maintain the "buy" rating.
As the scarce target of China's automotive electronics, the company has high-quality customer structure, and its core product lamp controller has strong competitive advantages. In the future, the company will benefit from volume increase, price increase and multiple categories. The medium and long-term growth logic is smooth. On the one hand, this equity incentive scheme helps to bind the interests of the team, on the other hand, it also shows the management's confidence in the future of the company. Taking into account the impact of the epidemic, lack of core, the rise in the price of raw materials and the decline in production and sales of the company's main customer Volkswagen Group, the profit forecast is lowered, and the net profit is expected to be RMB 430 / 6.3 / 850 million in the year 21 / 22 / 23 (the early profit forecast is RMB 540 / 7.9 / 1.07 billion).
The lowered profit forecast is mainly due to the decline in revenue and gross profit caused by the epidemic, lack of core and the rise in the price of raw materials. The company's revenue and gross profit are split as follows: investment suggestions: We selected three growth enterprises with similar market capitalization (30-50billion) for comparison, mainly Chinese leading automotive machinery enterprises with specific software R & D strength Huizhou Desay Sv Automotive Co.Ltd(002920) Continuous expansion of product categories Ningbo Tuopu Group Co.Ltd(601689) . Referring to 26.7 times of the target valuation range of comparable companies in 2023 (automotive electronics enterprises have a large valuation premium compared with traditional parts), we give Keboda Technology Co.Ltd(603786) 2530 times PE in 2023, and update the one-year target price range to 53-64 yuan (89-99 yuan in the previous time). The current stock price of the company still has 26% - 51% room to improve from the target valuation range and maintain the "buy" investment rating.
Risk tips
Affected by the epidemic, the downstream sales volume does not meet expectations and the upstream chip price rise risk.
