\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 80 Wuxi Longsheng Technology Co.Ltd(300680) )
Event:
The net profit of the parent company in the first quarter is expected to be RMB 27-33.38 million, with a year-on-year increase of RMB 27-33.38%; It is expected to realize the deduction of non net profit of 26-32.35 million yuan, with a year-on-year increase of 23% – 53%.
Comments:
The regional epidemic situation remained unchanged, the new energy vehicle industry was booming, and the performance of 2021q1 company continued to increase
The regional epidemic situation is repeated, and the prosperity of the new energy vehicle industry remains unchanged. The production and sales of 2022q1 are 1293000 and 1257000 respectively, with a year-on-year increase of + 142% and + 139% respectively. Among them, the production and sales of 2022m3 new energy vehicles are 465000 and 484000 respectively, with a year-on-year increase of + 115% and + 114%. The drive motor is the power conversion device of new energy vehicles, and the motor iron core is the core component of the drive motor. The high growth of production and sales of new energy vehicles drives the large demand for motor iron core. The company’s performance in 2022q1 continues the trend of high growth. It is expected to realize a net profit attributable to the parent company of 27-33.38 million yuan, a year-on-year increase of 27% – 57%.
The capacity continues to increase and the viscose patent is authorized, and the growth momentum of motor core business is strong
The market demand for motor iron core continues to be strong. The company complies with the industry trend and increases the production capacity. The company expects that the first phase of new energy vehicle drive motor iron core project (1.2 million sets) will be put into operation in 2021. At the same time, it will release the fixed increase plan again in November 2021. It is proposed to raise no more than 716 million yuan (including) for the construction of 10 motor iron core production lines (536 million yuan) and supplement working capital (180 million yuan). In addition, in February 2022, the subsidiary Longsheng new energy obtained the patent license for the adhesive technology of drive motor iron core unique to Heitian Seiko, further improving the company’s technical advantages in the field of drive motor iron core of new energy vehicles. While promoting the construction of production capacity, the company consolidates its technical advantages and is expected to deeply benefit from the wave of automobile electrification in China.
The switching of national six standards drives the growth of EGR demand, and waits for the resumption of chip supply to accelerate EGR volume
Benefiting from the national VI exhaust emission policy and returning to the mainstream technical route of heavy-duty diesel vehicles, we estimate that the EGR market will expand to 3.7 billion, which is more than 9 times the market space before the implementation of national VI. However, affected by the global chip supply, the ECU in the automotive industry is in short supply and can not fully meet the market demand, resulting in some diesel engine manufacturers’ National VI products still not fully loaded. As a leader in the EGR industry, we expect that with the gradual easing of the shortage of automotive chips, the company’s national six EGR system product volume is expected to further accelerate.
Profit forecast and investment rating
According to the 2021 performance express, we adjusted the company’s performance forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 98 million yuan, 212 million yuan and 318 million yuan respectively (the original value is 107 million yuan, 212 million yuan and 318 million yuan), corresponding to PE of 40.20, 18.52 and 12.34 times, maintaining the “buy” rating.
Risk tip: the policy implementation is lower than expected, the epidemic situation intensifies, the car sales decline, the domestic substitution is slow, the industry competition intensifies, the expansion of new products is slow, and the performance forecast is the preliminary calculation result. Please refer to the financial report.
