\u3000\u3000 Huizhou Desay Sv Automotive Co.Ltd(002920) (002920)
Event overview
The company released the performance forecast for 2021: during the reporting period, the net profit attributable to the parent company is expected to be RMB 800-850 million, with a year-on-year increase of 54.4% to 64.1%, of which the net profit attributable to the parent company in 2021q4 is RMB 309-359 million, with a year-on-year increase of 54.5% to 79.5%. The annual net profit deducted from non parent company was RMB 785-835 million, with a year-on-year increase of 69.9% to 80.7%, of which RMB 305-355 million was deducted from non parent company in 2021q4, with a year-on-year increase of 30.5% to 51.8%.
Analysis and judgment:
Q 4’s profit increased to a new high in a single quarter on a month on month basis. In 2021, the performance of the company’s three product lines of intelligent cockpit, intelligent driving and Internet connection services improved steadily, and new projects and products were put into mass production one after another. At the same time, the company continued to promote lean operation and improve operation efficiency, driving the net profit attributable to the parent company to achieve a year-on-year increase of 54.4% to 64.1% in 2021. In the split quarter, the net profit attributable to the parent company was 309-359 million yuan in 2021q4, with a year-on-year increase of 54.5% to 79.5% and a month-on-month increase of 153.6% to 194.7%. It recovered quickly from Q3 core shortage and raw material disturbance, and set a new high in single quarter profit.
Looking forward to 2022, with the in-depth promotion of automotive intelligence, the company’s three business lines are expected to meet high-speed growth again. At the same time, based on our tracking of the lack of core in the industry, the production capacity of chip related industry chain has been restored orderly since October. In the first half of 2022, the industry is expected to meet the strong replenishment cycle, and the company is expected to benefit again.
The intelligent transformation of the main business of the cockpit has sufficient orders to accelerate the release of performance
The scope of the company’s main cabin information display and cockpit information display covers the company’s main cabin and cockpit information display. In terms of trend, the penetration rate of intelligent cockpit products has accelerated with high cost performance and easy perception. Since 2018, the company has promoted the transformation of traditional products to intelligent cockpit:
(1) in 2020, the on-board infotainment system, the core product, successively broke through white point customers such as Toyota (Indonesia) and Maruti Suzuki (India), and obtained new project orders from original core customers; The new product multi screen intelligent cockpit has been supplied in a number of models of China’s leading automobile enterprises, and has obtained orders for new projects such as FAW Hongqi, GAC passenger cars and Chang’an;
(2) emerging business: display modules, systems and liquid crystal instruments are developing rapidly, with an average annual growth of 100% year-on-year in 2020. The performance of liquid crystal instruments has been supported by Byd Company Limited(002594) , GAC passenger cars, Geely, great wall and other key automobile enterprises; Intelligent cockpit domain controller and digital instrument have obtained new project orders from mainstream automobile enterprises such as FAW Toyota, Great Wall Motor Company Limited(601633) , Geely Automobile, GAC passenger car, Chery Automobile, Byd Company Limited(002594) ;
(3) external cooperation: the company signed a cooperation agreement with Huawei on the whole scene intelligent travel ecological solution, and joined hands with Qualcomm to build a new generation of intelligent cockpit system based on the 4th generation Xiaolong cockpit platform to comply with the general trend of cockpit intelligence.
A Das accelerated large-scale cooperation with NVIDIA diggings intelligent driving strategy to layout intelligent driving, covering L2, L3 and above levels. Now it has entered the accelerated harvest period:
(1) advanced auxiliary driving ADAS: 360 look around, full-automatic parking and driver monitoring, realizing large-scale mass production, and successfully breaking through the white point customers such as SAIC GM, great wall, SAIC Cheng and Weilai; In November 2021, it jointly released a new intelligent driving solution ipu02 with Texas Instruments, which is the world’s first tda4 chip ADAS mass production project, and is expected to continue to benefit from ADAS penetration;
(2) L3 and above high-level automatic driving: 1) at the hardware level, the L3 level automatic driving domain controller ipu03 is equipped with Xiaopeng P7, and will also be equipped with other models; Ipu04, based on NVIDIA’s latest generation of Orin chip, successfully went offline in September. Now it has cooperated with ideal automobile and obtained several project fixed points. The single vehicle ASP is expected to be 10000-20000 yuan. As the only partner of NVIDIA China at this stage, the company deeply benefits from the introduction of high-level automatic driving; 2) At the software level, we reached a strategic cooperation with maxieye to build L1-L4 full stack automatic driving scheme development and service operation capability, and explore the smart heavy truck operation service mode.
Investment advice
Intelligent cockpit products benefit from the trend of large screen and multi screen cockpit, and the performance is accelerated; Intelligent driving products cover L2, L3 and above, and have entered the harvest period: 1) ADAS products are accelerated; 2) L3 and above join hands with NVIDIA to deeply benefit from the introduction of high-level automatic driving. Optimistic about the long-term growth of the company’s intelligent transformation opportunities and raised the profit forecast. It is expected that the company’s revenue in 2021-2023 will be adjusted from RMB 92.8/107.9/12.35 billion to RMB 93.5/117.8/13.95 billion, the corresponding EPS will be adjusted from RMB 1.26/1.70/2.07 to RMB 147/2.00/251 million, the corresponding closing price of RMB 139.70/share on January 10, 2022, and the PE will be 95 / 70 / 56 times respectively, maintaining the “overweight” rating.
Risk tips
Industry competition intensifies; Product development and customer project acquisition are not as expected; Chip shortage; The cost of raw materials has risen.
