\u3000\u3 Shengda Resources Co.Ltd(000603) 596 Bethel Automotive Safety Systems Co.Ltd(603596) )
Investment logic
Chip shortage brings domestic substitution opportunities, and the company leads in technology and enjoys industry dividends. EHB has high braking energy recovery rate (increase the range by 20%), fast response speed (complete the active braking within 150 milliseconds), and can meet the execution requirements of intelligent driving. The unit price of traditional braking is about 1000 yuan and EHB is about 2000 yuan.
1. Shortage of chips and continuous promotion of domestic substitution: compared with foreign enterprises, Chinese manufacturers 1) low customization cost: the development cost of foreign enterprises reaches ten million yuan; 2) High technology Openness: with the advancement of chassis domain integration, the main engine factory is more inclined to Chinese enterprises with higher openness and use the EHB + ABS / ESC scheme provided by the same enterprise. At present, there is a shortage of chips. We expect the tight supply and demand of automotive chips to continue until 2023. Considering the security of supply chain, customers tend to adopt Chinese manufacturers. It will take about one and a half years for the brake system manufacturer and the main engine manufacturer to cooperate in the development, and the probability of changing the supplier in the later stage is small.
2. China’s first onebox mass production enterprise is marching towards the chassis by wire: the upgrading of braking by wire requires technical accumulation. The company has mastered ABS / ESC and other core technologies, has the ability of product integration and upgrading, and is also a scarce supplier of braking by wire in China. In 21 years, the company added 160 designated projects (83 EPB projects and 11 wcbs projects), with an estimated annual income of nearly 2.5 billion yuan. It is planned to add 300000 sets of wcbs, 300000 sets of esc620, 500000 sets of EPB calipers and other products in 22 years. We estimate that the revenue of electric control will be 2.2 billion yuan in 22 years, yoy + 76%; The gross profit is 580 million yuan, yoy + 86%, corresponding to 26% of the gross profit margin. In addition, the company acquired Wanda to cut into the steering by wire and move forward to the chassis by wire.
Explore overseas markets, expand categories and help the growth of lightweight business. In the past 21 years, the company has wholly controlled Weihai Bethel Automotive Safety Systems Co.Ltd(603596) and Weihai Saab, supporting SAIC GM and GM. The 4 million lightweight parts project of the company’s Mexican factory will reach production capacity, and the average annual sales is expected to be 490 million yuan. At present, the company’s main products are cast aluminum steering knuckle. In the future, it plans to develop subframe and other products to increase its performance. It is estimated that the mechanical braking revenue in 22 years will be 2.2 billion yuan, yoy + 6%; Gross profit of 500 million yuan, yoy + 9%, corresponding to gross profit margin of 23%.
Investment advice
As a scarce wire control manufacturer in China, the company has profound technology accumulation and will benefit from the increase in sales of wire control products with high value. Therefore, we expect the net profit of the company to be RMB 620 million, RMB 850 million and RMB 1.17 billion respectively in 22-24 years, and give the company 50 times of Pe2 in 2022, with a target market value of RMB 31 billion and a target price of 76 yuan / share.
Risk tips
Car sales outside China were lower than expected; The localization progress of braking system and other components is less than expected; The company’s customer expansion is less than expected; The company’s overseas business performance was lower than expected.
