\u3000\u3000 Hangzhou Star Shuaier Electric Appliance Co.Ltd(002860) (002860)
Key investment points
Recommendation logic: Hangzhou Star Shuaier Electric Appliance Co.Ltd(002860) over the years, the R & D, production and sales of compressor parts have gradually grown into a subdivision leader in the field of compressor parts. Subsequently, the company successively cut into temperature controller, motor, photovoltaic and other industries through mergers and acquisitions, gradually diversified its business and continued to contribute to the growth of the company. The company’s revenue increased from 350 million yuan in 2017 to 1.06 billion yuan in 2020, with a three-year CAGR of 44.7%. In the first three quarters of 2021, the company achieved a revenue of 1.06 billion yuan, a year-on-year increase of 57.9%, and a net profit attributable to the parent company of 130 million yuan, a year-on-year increase of 50.6%.
Compressor accessories are subdivided into faucets, with prominent competitive advantages. At the beginning of its establishment, the company deeply cultivated compressor accessories, had obvious technical advantages in the field of compressor accessories, and gradually grew into a leader in industry segmentation. The revenue of the company’s protectors and starters has achieved a compound growth of 10% from 2016 to 2020. At present, the production, sales and market share of the company’s initiators and protectors rank first in the same industry in China. The downstream customers include famous compressor manufacturers such as Huayi Company, Dongbei company and Midea company. The customer resources are rich and the competitive advantage is obvious.
Parts extension helps business diversification. While deepening the field of compressor accessories, the company has successively cut into temperature controller, motor and other industries through mergers and acquisitions to create a diversified business matrix. Among them, the company’s thermostat business benefited from the growth of the small household appliance industry and achieved a compound growth of 41.5% from 2017 to 2020; In recent years, the subsidiary zhete Electric has actively laid out the field of new energy vehicles. The rapid growth of new energy vehicle sales may open new market space for the motor industry. The motor business of the company is expected to achieve rapid growth by taking advantage of the east wind of new energy.
Module OEM cuts into the photovoltaic business, and the second growth curve starts. Promoting the development of photovoltaic industry is one of the important measures to achieve the goal of “double carbon”. Under the background of the rapid development of photovoltaic industry, the company cut into the photovoltaic module OEM industry through the acquisition of fule new energy to create the second growth curve. Fule new energy has diversified product matrix, complete R & D system, rich customer resources and hot orders. After taking over, the company will rapidly expand its production capacity. It is expected that the company will have 3.5gW photovoltaic module production capacity after 2023, helping the company enjoy the dividend of rapid growth in the photovoltaic industry.
Profit forecast and investment suggestions. It is estimated that the company’s EPS from 2021 to 2023 will be 0.74 yuan, 1.02 yuan and 1.21 yuan respectively. Considering the steady growth of the company’s white electricity business and the gradual large-scale photovoltaic business, with reference to the average valuation of comparable companies, we give the company a valuation of 27 times in 2022, with the corresponding target price of 27.5 yuan. It is covered for the first time and given a “buy” rating.
Risk warning: the price of raw materials may fluctuate sharply, the downstream demand is less than expected, and the RMB exchange rate may fluctuate sharply.
