\u3000\u3 China Vanke Co.Ltd(000002) 101 Guangdong Hongtu Technology (Holdings) Co.Ltd(002101) )
The company is the leader in the field of automotive aluminum alloy die casting
The company has been deeply engaged in the field of aluminum alloy die casting for 20 years and is in a leading position in the industry. At present, the company’s main business is die casting and interior and exterior decoration. From 2018 to 2021, the revenue performance of the company’s two main businesses was relatively stable as a whole, with the revenue scale of die casting ranging from 3.5 billion to 3.9 billion yuan and the revenue scale of interior and exterior decoration ranging from 1.9 billion to 2 billion yuan. From 2019 to 2021, under the continuous severe external environment, the company improved its profitability through business expansion and fine management, and realized the bottom reversal of profits; In the follow-up, with the improvement of disturbing factors such as the epidemic outside China, car core shortage and rising raw material prices, as well as the company’s continuous development in new energy business, the company’s profitability is expected to continue to improve.
Automotive aluminum alloy die casting industry ushers in changes
Under the background of double carbon, lightweight is the general trend of the development of automobile industry. Aluminum alloy has outstanding comprehensive cost performance and is the preferred material for automobile lightweight. Automobile lightweight drives the rapid growth of single vehicle aluminum consumption. At present, die-casting aluminum alloy is the main aluminum alloy for automobile, and die-casting aluminum alloy products account for about 54% ~ 70% of automobile aluminum. The development of new energy automobile industry promotes the continuous innovation of aluminum alloy die casting technology. Tesla took the lead in applying the integrated die-casting technology on the rear floor. Compared with the existing production technology, it can improve efficiency and reduce costs. Therefore, we believe that the integrated die-casting technology is the development trend in the future, and its penetration rate will gradually increase, which is expected to replace the current stamping welding process. Considering the development cycle of new technology imported models, we expect that the market space of integrated die casting will be rapidly improved from 2023. According to our calculation, the market space of China’s integrated die casting is expected to reach 27.2 billion by 2025, and the CAGR from 2022 to 2025 will reach 221%.
The short-term performance is expected to improve marginally, and may lead the integrated die-casting track in the long term
In the short term, the proportion of new energy related businesses in the company’s die casting business continues to increase; In terms of interior and exterior decoration business, the company acquired 50% equity of siweier Marui, which is expected to correspond to an annual revenue of about 300 million yuan and a net profit of about 38 million yuan; In terms of special vehicle business, the company listed and transferred the equity of Baolong automobile, optimized the allocation of assets and resources, and helped the company concentrate resources to promote the business transformation and upgrading of die-casting sector. In the long run, the company has an early layout in the field of integrated die casting, has rich technical reserves in aluminum alloy materials, connection technology, die casting process and so on, and has 6800t chassis integrated structural parts off the assembly line. In the future, the company is expected to usher in a new growth period with the continuous mass production of products in terms of integrated rear floor assembly, integrated battery tray, integrated front compartment assembly and other components.
Investment suggestion: the company is the leader in the automotive aluminum alloy die casting industry. In the short term, each business segment of the company is expected to usher in marginal improvement, driving the improvement of the company’s performance; In the long run, the company has an early layout and rapid progress in the field of integrated die casting. In the future, with the mass production of relevant products, the company’s revenue scale and performance are expected to increase rapidly. We estimate that the operating revenue of the company from 2022 to 2024 will be 6.87 billion yuan, 8.16 billion yuan and 9.49 billion yuan; The net profit attributable to the parent company is 440 million yuan (including 70 million yuan of non recurring profits and losses), 490 million yuan and 600 million yuan; The corresponding PE is 10.3x, 9.4x and 7.7x respectively. With reference to comparable companies, the company is given a PE valuation of 19 times of the net profit attributable to the parent company in 2022, except for the non recurring profit and loss of RMB 70 million. The target price is RMB 13.49. It is covered for the first time and given a “buy” rating.
Risk tips: the prosperity of the automobile industry is at a downward risk, the price of raw materials remains at a high level, the industry competition intensifies, the expansion of new business is less than expected, the calculation is subjective, there is a risk of deviation, the current circulation market value of the company is small, and there has been a change in the stock price of the company recently
