\u3000\u3 Shengda Resources Co.Ltd(000603) 179 Jiangsu Xinquan Automotive Trim Co.Ltd(603179) )
The company is expected to enter a period of accelerated growth. Subject to customer structure, capacity utilization and other factors, the company’s early net interest rate level is affected to a certain extent: with the expansion of the company’s customers, the optimization of customer structure, the improvement of capacity utilization and single vehicle value, the company’s profitability is expected to gradually improve, and the company is expected to enter an accelerated growth period in the next few years.
Customer optimization and the increase of bicycle value will promote the improvement of profitability. In recent years, the company has continuously strengthened the development of passenger car customers, expanded from independent brands to joint venture, foreign capital and new energy customers, and realized customer upgrading. According to the analysis of the top five customers, the customer concentration of the company has decreased since 2018, and there are new customers among the top five customers in 2021. Among the top five customers, the third is new customers, and the sales revenue has increased to 499million yuan, accounting for 12.3% of the main business revenue. With the continuous cooperation between the company and the third largest customer, the company is expected to obtain more new project orders from customers with the advantages of cost and rapid response, and become a new growth point of the company’s profits. Under the joint effect of new orders boosting product unit price and continuous optimization of product structure, the average unit price of the company’s products has continued to increase in recent years, which is also expected to be conducive to the improvement of revenue level and profitability.
It is expected that the improvement of capacity utilization will also promote the improvement of profitability. The company has obtained orders from international well-known electric vehicle enterprises, Saic Motor Corporation Limited(600104) and other customers, which can cover most of the new production capacity of the company’s Shanghai base. With the release of new production capacity of Shanghai base and other new production capacity, the orders of downstream customers increase, and the capacity utilization rate is expected to continue to improve, promoting the improvement of the company’s profitability. With the company’s production bases in Foshan, Ningbo, Xi’an and Shanghai successively put into operation, the company’s revenue level will continue to grow. It is expected that the four new factories will contribute 2.641 billion yuan of incremental revenue, driving the improvement of the company’s overall revenue.
Competitive advantage: mold independent, synchronous research and development, mastering advanced technology, etc. With strong synchronous development ability and independent mold development ability, the company can assist vehicle manufacturers to improve product development efficiency and reduce development costs. At the same time, it can quickly respond to customer needs and form a long-term and stable cooperative relationship with vehicle customers. The company continues to increase investment in research and development, new technology and personnel, and continuously improve the overall competitiveness of the company.
Profit forecast and investment suggestions
Slightly adjust the income and gross profit margin, and predict the EPS 1.5% from 2022 to 202435, 1.98 and 2.68 yuan (original 1.52, 2.07 and 2.71 yuan). According to the 22-year PE valuation and with reference to the valuation of comparable companies, 30 times PE in 2022 is given, the target price is 40.5 yuan, and the buy rating is maintained.
Risk tips
The supporting quantity of auto trim products is lower than expected, the price rise of raw materials is higher than expected, and the uncertainty of the epidemic situation will affect the supply and supporting quantity.
