\u3000\u3 Shengda Resources Co.Ltd(000603) 305 Ningbo Xusheng Auto Technology Co.Ltd(603305) )
High quality suppliers of aluminum alloy die castings, with rapid growth in revenue
Ningbo Xusheng Auto Technology Co.Ltd(603305) is a supplier of high-quality aluminum alloy die castings in China. Its products mainly focus on the field of new energy vehicles, including gearbox shell, motor suspension, battery pack shell, etc. Benefiting from the high prospect of the new energy vehicle industry, the company’s revenue has maintained rapid growth in recent years, with a compound growth rate of 43% from 2015 to 2021. With the rapid expansion of Tesla, the company’s core customer, and the smooth expansion of other new energy vehicle customers, we expect the company’s revenue to be 4.282/58.46/7.381 billion yuan, the net profit attributable to the parent company to be 5.28/7.58/1.069 billion yuan and EPS to be 1.18/1.70/2.39 yuan / share respectively from 2022 to 2024, corresponding to 25.1/17.5/12.4 times the current share price. For the first time, give a “buy” rating.
Close cooperation with Tesla is expected to fully benefit from Tesla’s rapid and large-scale production
Tesla is the company’s largest customer. In 2021, the company’s sales from Tesla accounted for 40% of the company’s total revenue. Since 2014, the company has carried out comprehensive cooperation with Tesla and gradually expanded its supporting products to aluminum alloy die castings and forgings such as transmission system, suspension system and battery system. After Tesla built a factory in China in 2019, the company achieved incremental business in Tesla China. At present, Tesla is accelerating the construction of factories to increase production capacity, and the company is expected to grow rapidly with Tesla.
Continue to develop new energy customers, and the customer structure shows diversified development
The company has been deeply engaged in the aluminum die casting industry for many years. In recent years, relying on the advantages of Tesla customer certification, the company has continued to explore the new energy vehicle market and optimize the customer structure. At present, the business development scope of the company has covered three regions of “North America, Europe and Asia Pacific”, including Great Wall Motor Company Limited(601633) , Polaris, BMW, velai and other auto enterprises, ZF and other world-famous Tier1 manufacturers, as well as battery suppliers such as secoli, Contemporary Amperex Technology Co.Limited(300750) , Eve Energy Co.Ltd(300014) .
The three major processes of die casting, forging and extrusion are arranged, and the capacity expansion releases the performance space
The company has made in-depth layout in the field of aluminum lightweight, and its product structure has been continuously enriched. The company started with aluminum die-casting products, and its product line extends to the field of forging and extrusion, basically covering aluminum alloy products of automobile power, chassis and battery system. In recent years, the company has continued to expand capacity construction. With the gradual production of forging and extrusion capacity, the company will further release the space for performance growth.
Risk tip: the prosperity of the automobile industry is lower than expected; Tesla’s sales volume is lower than expected; The progress of capacity construction is less than expected.
