\u3000\u3 Shengda Resources Co.Ltd(000603) 179 Jiangsu Xinquan Automotive Trim Co.Ltd(603179) )
The development of auto accessories by both business and passenger is expected to open a new round of high growth
The company started with the dashboard business of commercial vehicles, and has been a leader in the market segment of heavy truck dashboard in recent years. Around 2008, the company accelerated the development of passenger car interior and exterior trim business, and the product category expanded to door inner guard sector assembly, column guard sector assembly, bumper assembly and other products. From 2016 to 2018, the company added a number of supporting Geely and SAIC models, and doubled its revenue in three years. Since 2019, the company has accelerated the development of joint venture / foreign capital / new energy brand customers. With the supply of new projects, the company is expected to start a new round of high growth. We expect that the company’s revenue from 2022 to 2024 will be RMB 6.69/87.9/10.84 billion, the net profit attributable to the parent company will be RMB 390 / 570 / 760 million, the EPS will be RMB 0.80/1.17/1.57/share, and the corresponding PE of the current stock price will be 31.1/21.4/16.0 times. It will be covered for the first time and the company will be given a “buy” rating.
The interior and exterior decoration space of the car is vast, and the advantages of cost control + nearby supporting facilities help the company develop the market
The global automotive interior and exterior decoration market space totals about 680 billion yuan. Automotive interior and exterior decoration products have lower barriers than power system / braking system, and the competitive factors mainly lie in cost and service. In the case of supporting many independent brand car enterprises, the profitability of the company still maintains the upstream of the industry, which confirms the strong cost control strength of the company to a certain extent. In addition, the company has established 15 production bases in China to facilitate nearby supporting and timely respond to customer needs. The advantages of cost control + timely response help the company continue to develop the market.
Customers expand to joint venture / foreign capital / new energy brands, and overseas business is starting
At present, the main engine factory customers of the company are still mainly independent brands, including Geely Automobile, Saic Motor Corporation Limited(600104) , FAW Group, Chery Automobile, etc. In recent years, the company’s customer structure has expanded to joint venture / foreign capital / new energy brands, and has won the designation of important customers in North America, Weilai, ideal and many other new forces in car manufacturing. With the large volume of new projects such as Changan Ford, SAIC Volkswagen, important customers in North America and ideal, the company’s performance is expected to start a new round of high growth. At the same time, the nature of the automotive trim industry also determines the strength of cost control, which is expected to become a sharp weapon for the company to explore overseas markets. The company set up subsidiaries in Malaysia and Mexico in 2019 and 2020 respectively to accelerate the development of overseas market business, and the global market competitiveness is expected to be further strengthened.
Risk tip: the prosperity of the automobile industry is lower than expected; Overseas business expansion is less than expected; The progress of customer development is less than expected.
