\u3000\u3 China Vanke Co.Ltd(000002) 920 Huizhou Desay Sv Automotive Co.Ltd(002920) )
Event:
On April 15, Huizhou Desay Sv Automotive Co.Ltd(002920) released the annual report of 2021. The annual revenue, net profit attributable to parent company and net profit deducted from non operating income of the company were 95.69 (+ 40.75%), 8.33 (+ 60.75%) and 822 (+ 77.71%) million yuan respectively, of which the revenue, net profit attributable to parent company and net profit deducted from non operating income in the fourth quarter were 32.67 (+ 30.61%), 342 (+ 70.93%) and 341 (+ 45.94%) million yuan respectively. The company's performance reached the median value of the forecast, higher than expected.
Comments:
Full orders and optimized revenue structure. Benefiting from the year-on-year recovery of global automobile production and sales and the accelerated iteration of automobile intellectualization, the company, as the leading customer structure of local Tier1, has optimized year by year. In 21 years, the company has broken through the new customers such as lutes (luxury brand) and psastellantis, obtained the core platform orders of mainstream automobile enterprises such as Volkswagen and Toyota, and realized the coverage of mainstream domestic and foreign automobile enterprises and new forces of automobile manufacturing. The annual sales of new project orders of the company exceeded 12 billion yuan (+ 80%), breaking a record high. In terms of business, intelligent cockpit, intelligent driving and Internet connection businesses have achieved revenue of RMB 7.893 (+ 33.52%), 13.87 (+ 94.78%) and 289 (+ 65.10%) respectively. In terms of cockpit, the company's second-generation products have been mass produced on a large scale, the third-generation products have been designated by vehicle enterprises, and the fourth-generation products have been gradually implemented. With the development of product iteration and domain controller integration trend, this part of business may continue to increase both volume and price; In terms of intelligent driving, the company has a leading advantage in the industry. The products of look around and parking system have been supplied in batches, and the sales volume has exceeded one million; The lightweight intelligent driving platform has been designated by many brand projects. The intelligent driving industry is still in its infancy. The company's leading position is constantly consolidated by virtue of its binding to NVIDIA and its first mover advantage. This part of the business may gradually become the main driver of the company's high revenue growth; In terms of high gross profit Internet connection business, the company launched a new generation of intelligent cockpit interactive operating system blue whale 4.0 in 21 years. The high growth of this part of business reflects the gradual verification of the logic of the company's software driven business model and brings a new growth curve.
Profit growth was bright and cash collection was stable. The gross profit margins of the company's cockpit, intelligent driving and Internet connection businesses were 24.45% (+ 0.43pct), 20.78% (+ 9.94pct) and 47.21% respectively, and the overall gross profit margin reached 24.60% (+ 1.21pct). Under the dual influence of upstream price rise and covid-19 epidemic, the company can still improve its profitability. We believe that it mainly benefits from the landing of high-end intergenerational (third-generation) cockpit products and the improvement of the company's scale advantage and bargaining power. The expense ratio of the company was basically stable during the period. The expense ratios of sales, management, R & D and finance were 2.42% (- 0.68pct), 2.80% (+ 0.03pct), 10.21% (- 0.10pct) and - 0.08% (+ 0.38pct) respectively. Despite the provision of goodwill impairment of 23 million yuan and the decrease of capitalized R & D expenses of 115 million yuan, the company still achieved a net interest rate of 8.69% (+ 1.07pct), and its profitability was outstanding. At the same time, the net cash flow from operating activities of the company reached 843 million yuan, which was higher than the net profit attributable to the parent company, and the payment collection ability was stable. At the end of the 21st century, the company's inventory reached 2.035 billion yuan (+ 84.81%). Under the current situation of large fluctuations in upstream supply and sufficient orders on hand, the company's early hoarding helps to iron out future price fluctuations, ensure stable production, and the high increase of inventory is reasonable.
Cockpit and intelligent driving have broad prospects, and the pattern is uncertain. Desai is expected to break through. Driven by the trend of intelligent automobile, the penetration rate of intelligent automobile electronic products is constantly improving. At the same time, the intelligence, multi screen and large screen of the cabin are gradually driving the value of automobile electronics. The new trend brings new variables to the competition pattern of intelligent cockpit and intelligent driving. In terms of intelligent cockpit, the overseas Tier1 leader in the internal combustion engine era dominates the global market, and the Chinese Tier1 leader Huizhou Desay Sv Automotive Co.Ltd(002920) in the intelligent vehicle era achieves share leadership by making efforts in the subdivided fields such as information entertainment system and liquid crystal instrument. In the intelligent era, Desai is expected to take this as the basis through first mover advantage, technology accumulation Customer experience continues to expand its own advantages. In terms of automatic driving, automatic driving domain controller is the key to competition. Vehicle manufacturers, technology enterprises, Chinese Tier1 and overseas Tier1 compete. Huizhou Desay Sv Automotive Co.Ltd(002920) as the leader of Chinese Tier1, through in-depth understanding of NVIDIA products, is committed to improving its own product line, realizing continuous iteration of products by steady cooperation with customers, and building a development ecology through in-depth cooperation between upstream and downstream of the industrial chain, It is expected to seize the opportunity and lead the trend in the era of automotive intelligence.
Profit forecast and investment rating: as the leader of Tier1 in China, the company has made remarkable achievements in high-end transformation and has high medium-term growth under the catalysis of the rapid development of the industry. In the long run, the company is expected to achieve a breakthrough in share by virtue of first mover advantage and technology accumulation. At the same time, through in-depth cooperation with downstream and ecological partners, the company can realize iterative upgrading and continuous landing of products. We estimate that the net profit of the company from 2022 to 2024 will be RMB 1.091/1.534/2.127 billion respectively, and the PE value corresponding to the current share price will be 55/39/28 times respectively, which will be upgraded to the "strongly recommended" rating.
Risk tip: the promotion of automatic driving domain controller customers is less than expected, the progress of ADAS products is less than expected, the epidemic and other factors lead to the fluctuation of upstream supply and downstream demand of the company, the intensification of industry competition, etc.
