\u3000\u3 China Vanke Co.Ltd(000002) 384 Suzhou Dongshan Precision Manufacturing Co.Ltd(002384) )
Event: on May 18, 2022, Suzhou Dongshan Precision Manufacturing Co.Ltd(002384) announced that it planned to establish a subsidiary in Mexico through the wholly-owned subsidiary dsbj, with an initial investment of US $8 million, funded by dsbj100%, mainly engaged in the R & D, production and sales of parts in the fields of new energy vehicles and energy storage.
We will continue to make efforts in the field of new energy vehicles and embark on regional strategic layout. At present, the subsidiary Mexico company mainly provides automobile structural parts, and its products and services cover North America. The subsidiary provides supporting services for North American car factories and battery factories, deeply binds t customers and develops new customers in North America. The establishment of overseas subsidiaries will further expand the company’s overseas market share, shift the company’s business model from globalization to regionalization, and deeply tap the product needs of customers in North America. The Mexican subsidiary aims to make full use of local human, logistics and geographical advantages, effectively reduce the production and transportation costs of products, enhance the competitiveness of products and improve the overall profitability of the company. The overseas layout can further optimize the revenue structure and increase the proportion of revenue in the automotive field. Affected by the global epidemic and international environmental turbulence, the establishment of overseas subsidiaries is an initial investment with less investment, which only supports the R & D, production and sales of automobile structural parts. It is expected that the subsidiaries will start trial production this year and make follow-up investment according to customer feedback and international conditions.
The sealing and control performance of the epidemic is under pressure in the short term, and the impact of the acceleration in the later stage is still controllable throughout the year. Affected by the epidemic logistics control, the sales delivery is blocked, and Q2 is the company’s traditional off-season. The company’s performance is under pressure in the short term, but the company’s production is carried out in an orderly manner, the new machine part number of customer a is imported, the demand is stable, and the orders are not reduced. In May, the epidemic situation began to improve, and the introduction of materials was better than the company expected. At the same time, the company reserved an emergency plan to open up new ways of material introduction. The local government strongly supported the company to start production. In the future, with the gradual release of the epidemic control and the acceleration of late delivery, the annual performance may not be affected.
Deepen the cultivation of key customers, accelerate the first growth curve, cut into the automotive field and open the second growth curve. The new machine of client a will launch and import high value item numbers, and the superimposed company’s products are expected to enter the AR / VR related industrial chain of key customers. ASP and share are expected to maintain rolling improvement, and the first growth curve will continue to accelerate. With the continuous improvement of the penetration rate of BMS soft board scheme, the company is expected to increase both volume and price through capacity expansion and customer expansion in 2022; With the promotion of automobile electrification and intellectualization, the consumption and value of vehicle PCB are increasing. The company’s PCB products are expected to continue to be in large quantities in ADAS, lidar, intelligent cockpit and other fields; The company empowers the automotive field with high-quality, low heat dissipation and other technologies accumulated in the communication field for many years, and actively develops new products. The category and value of single vehicle products are expected to be further improved; The trend of intelligent automobile is obvious, giving birth to the demand for touch screen. In the future, the company’s photoelectric display business is expected to make a breakthrough in the automotive field. The company moved to the blue ocean market of new energy vehicles, and the electronic circuit, precision manufacturing and photoelectric display businesses are expected to usher in further growth and open the second growth curve.
Investment suggestion: it is estimated that the net profit attributable to the parent company in 22 / 23 / 24 years will be 2.382/29.61/3.542 billion yuan, and the closing price on May 20, 2022 will be 12 / 10 / 8 times of PE. As the world’s leading PCB manufacturer and the country’s leading precision manufacturing leader, the company focuses on new energy vehicles, AR / VR and other emerging markets. The company cooperates within departments, continuously improves its profitability and maintains the “recommended” rating.
Risk warning: price fluctuation of raw materials; Industry competition intensifies; The expansion of production was less than expected.
