Guangting information (301221)
1. Smart car software solution provider, accelerating revenue growth
The company focuses on providing software innovation and solutions for intelligent connected vehicles. At present, the company’s business includes the fields of intelligent cockpit, intelligent electronic control and intelligent driving, and has established the intelligent connected vehicle test service system and mobile map data service platform. Its main customers include the world’s leading Tier1 such as Nippon power, Yanfeng Visteon, fogia Gele and electric equipment, as well as Nissan, SAIC Changan and other well-known automobile manufacturers at home and abroad. In 2021, the company’s revenue was 432 million yuan, with a year-on-year increase of 29.3%, and the revenue accelerated; The net profit attributable to the parent company was 73.26 million yuan, a year-on-year increase of 0.34%.
2. Software definition: with the advent of the automotive era, the value of automotive software has increased
The centralization of E / E architecture provides the hardware foundation for the intelligent networking of automobile. Automobile evolves to mobile intelligent terminal and computing platform. Among the five DcuS of intelligent automobile, the cockpit domain and driving domain are the key to intellectualization. The layered decoupling of automobile software and hardware will highlight the value of software. According to the data of Gaogong intelligent vehicle, in 2021, the insurance volume of China’s new car front mounted standard configuration networking intelligent cockpit was 2.7757 million, with a carrying rate of 13.61%, a year-on-year increase of 4pct. The insurance volume of new car front mounted ADAS in the Chinese market was 8.0787 million, a year-on-year increase of 29.51%, and the carrying rate of major L1 / L2 automatic driving functions was improved. With the improvement of the carrying rate and technology upgrading of intelligent cockpit and intelligent driving, it is expected that the proportion of automobile software cost will continue to increase in the next 10 years, and the automobile software market will continue to grow.
3. Long term cooperation with high-quality customers, “software factory” provides high-quality software development
The company has a high concentration of customers, mostly high-quality customers of world-famous teir1 and vehicle manufacturers. The company deeply binds customers by establishing joint ventures and building offshore development centers, and sets up subsidiaries in Japan to provide services for Japanese customers. Major customers such as Japanese power products, Faurecia Gele and electric equipment contribute revenue stably. The company has the ability to develop automotive electronic software in the whole domain and stack, and provides high-quality software development and delivery through the “software factory”. At the same time, the company has established a two-level R & D system of advanced technology and business division to meet the common and personalized needs of the market. At the end of 2021, the number of employees of the company was 1904, with a year-on-year increase of about 54%, of which technicians accounted for 91.8% and software engineers accounted for 80%. We expect that the number of employees of the company will continue to increase rapidly in 2022, and the company’s revenue has a high growth foundation.
Profitability and investment suggestions: we believe that the degree of car networking, intelligence and electrification continues to improve, and the smart cockpit and intelligent driving have a high view. The company has long-term cooperation with high-quality customers and will continue to expand. We expect the company’s revenue to be 650 / 904 / 1216 million yuan and net profit to be 114 / 170 / 243 million yuan respectively from 2022 to 2024. Compared with comparable companies, the target market value in 2022 is 6.5 billion yuan and the target price is 70 yuan, “Buy” rating is given for the first time.
Risk warning: the risk of rising labor costs and falling gross profit margin; The risk of high customer concentration of the company; The risk that the progress of R & D is less than expected; Risk of exchange loss caused by exchange rate fluctuation; Fluctuation risk of downstream automobile industry; Market competition intensifies risks.
