\u3000\u3000 Zhejiang Asia-Pacific Mechanical & Electronic Co.Ltd(002284) (002284)
Event overview: on January 24, 2022, the company announced that Zhejiang Asia-Pacific Mechanical & Electronic Co.Ltd(002284) recently received a fixed-point notice from an independent brand host factory in China. The company will develop and produce the front disc brake with steering knuckle assembly and rear drum brake assembly products of a new energy vehicle as the customer's parts development and production supplier.
The capital expenditure cycle of basic braking business has passed, and the inflection point of high-level profit of the company has come
The company has been deeply engaged in the braking industry for many years and is a leading company in China's automobile braking industry. Its basic brake products have been recognized by many head car brands. The existing supporting customers are mainly Volkswagen, great wall, Chang'an, GAC, SAIC and other head mainstream brands, and the customer structure is high-quality. In 2020, the company's basic brake revenue was 2.24 billion yuan, accounting for about 11% of the market. The competition pattern of basic brake is still relatively scattered, and the company ranks first in the market share of domestic capital. The planned basic brake capacity of the company is 6 billion yuan. The superposition of the early capital expenditure cycle and the decline of the industry cycle lead to the loss of the company's profit. With the stabilization of the industry cycle, the easing of depreciation pressure and the landing of new orders from new customers, the company's capacity utilization is expected to improve, driving the profit margin upward. As the leader of the automobile braking industry, the company has the advantages of production capacity, cost, localized service and customer barriers cultivated for many years. The market share of the basic braking business is expected to continue to increase, and the turning point of the company's profit has come.
Basic brake products and electronic brake products are driven by two wheels, and the company has entered a new round of rapid growth
As the core safety part, automobile braking products have high requirements for product quality control and manufacturing process. Based on the basic brake (brake disc), gradually upgrade the automotive electronics (ABS / ESC / EPB) products, and finally upgrade the brake by wire (IBS) as the product development path of the mainstream brake enterprises in the international market. The company's high-quality and extensive customer structure in the field of basic braking and many years of stable mass production and supply experience provide an important entry point for its further upgrading to line control. At the same time, as the earliest enterprise in China to develop and produce ABS, the company has recently achieved mass production of a variety of automotive electronic products for China's core independent brands. At present, the company has carried out close cooperation with core independent brands such as FAW, Dongfeng, great wall, SAIC, Geely and Chang'an, as well as core new power auto enterprises such as Zero run automobile, and its products continue to be recognized by customers. Independent brands are rising in an all-round way and their share continues to increase. The company is expected to achieve "accompanying growth" with independent brands and realize the import substitution of core automotive electronic products. The company has focused on the field of automobile braking for many years. The "two wheel drive" of basic braking and automobile electronics business is expected to achieve import substitution, and the performance of the company will achieve high-quality growth in the next 3-5 years.
Investment suggestions:
It is estimated that the company will achieve a revenue of RMB 3.45/41.9/5.47 billion and a net profit attributable to the parent company of RMB 0.70/1.22/199 billion from 2021 to 2023. The current market value corresponds to 107 / 61 / 37 times of PE from 2021 to 2023. The company's automotive electronic products continue to be in large quantities, and its performance is expected to return to a record high level. As a leader in China's braking industry, it is expected to enjoy a valuation premium and maintain the "recommended" rating.
Risk tips:
The price fluctuation of raw materials leads to low gross profit margin, less than expected expansion of new products, exchange rate risk, etc.
