\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 28 Lizhong Sitong Light Alloys Group Co.Ltd(300428) )
Event: the company announced on May 18 that the company and Wencan Group Co.Ltd(603348) (hereinafter referred to as ” Wencan Group Co.Ltd(603348) “) signed the strategic cooperation framework agreement. The two sides jointly promoted the R & D and application of lightweight auto parts products with the goal of common development and long-term cooperation.
Comments:
The two sides will cooperate on heat-free alloy materials. According to the announcement of the company, the two sides will establish strategic cooperation in the field of material development and process application of large integrated body structure parts, integrated cast battery box and other products of new energy vehicles: Lizhong Sitong Light Alloys Group Co.Ltd(300428) responsible for the research and development of material formula, Wencan Group Co.Ltd(603348) responsible for the research and development of the best process conditions for material application, and improve the maturity and economy of batch application of materials through cooperation and development between the two sides. Both parties will sign the exclusive supply agreement on confidentiality of technical and business cooperation and products for the heat-free materials developed in cooperation. Lizhong Sitong Light Alloys Group Co.Ltd(300428) will exclusively purchase the heat-free materials developed in cooperation from Wencan Group Co.Ltd(603348) within the scope of the agreement, and agree that the company can supply customers that have been matched before the agreement comes into effect, in the production system of automobile OEMs (including foundry invested in the system of automobile OEMs) and customers recognized by the partner.
Join forces to enjoy free hot dividends Wencan Group Co.Ltd(603348) mainly produces automotive aluminum alloy precision castings. The products are mainly used in the field of body structure such as engines of traditional fuel vehicles and new energy vehicles. In the field of large-scale integrated structural parts, Wencan Group Co.Ltd(603348) won the project designation of two new force head customers for large-scale integrated structural parts, rear floor products, front assembly products and integrated CD column products. The signing of this strategic cooperation framework agreement will unite the material leader with the auto parts leader, help Lizhong Sitong Light Alloys Group Co.Ltd(300428) establish a long-term and stable strategic partnership with downstream leading enterprises, further promote the R & D and application of heat-free alloy materials for integrated die-casting auto parts, and is expected to speed up the mass production process of heat-free alloy and fully enjoy the dividend of heat-free alloy under integrated die-casting.
The heat free faucet has a broad market. The company has applied for the patent of heat-free alloy material in 2020, breaking the foreign product monopoly and technical blockade in this field, and gradually realizing the market-oriented application of the material. At the same time, the price is 15% – 20% lower than that of foreign products. At present, the company has a broad and stable new energy vehicle customer market foundation. At present, it directly provides some products and supporting services for many new energy vehicle enterprises such as Weilai, ideal and Xiaopeng, and has completed the factory certification of an international leading new energy vehicle enterprise, laying the foundation for the product promotion of heat-free alloy materials of the company. The market space of heat-free alloy is huge. We expect that when the global output of new energy vehicles reaches 30 million (corresponding to the penetration rate of about 43%), the market space of passenger car (new energy + fuel) heat-free alloy is expected to be about 159.3/503537.2 billion yuan under the pessimistic / neutral / optimistic assumption. The market space is huge. The demand for automobile cost reduction and efficiency increase will drive the industry to usher in an explosive period.
Earnings forecast and investment rating: we predict that the diluted earnings per share from 2022 to 2024 will be 1.06 yuan, 2.43 yuan and 3.06 yuan respectively, and the PE corresponding to the current stock price will be 21.4x, 9.3x and 7.4x respectively. Considering the stable growth of the company’s original business and the downstream demand for cost reduction and efficiency increase of heat-free alloy, it is expected to usher in an outbreak period and maintain the company’s “buy” rating.
Risk factors: the output and demand of new energy vehicles are lower than expected, the penetration rate of integrated die casting is lower than expected, and the accelerated rise of raw material prices inhibits terminal demand.
