Ningbo Huaxiang (002048) In-Depth Tracking Report: Supporting Tesla’s Business Cycle Up
The company supports Tesla’s domestic Model 3 smart rear-view mirrors and other products. Considering the market segmentation and capabilities of the company’s internal trims, it is expected that the value of subsequent support will continue to increase.
At the same time, the company’s new product thermoforming continued to be heavy, and benefited from the new product cycle of the core customer FAW-Volkswagen, and the operating cycle was upward.
Increase the company’s EPS forecast for 2019/20/21 to 1.
24 yuan, giving the company an estimate of 15 times PE in 2020, maintaining a “buy” rating, raising the target price to 28 yuan.
The company supports Tesla’s domestic Model 3 smart rear-view mirrors and other products. It is expected that the value of subsequent bicycle support is expected to increase further.
The company’s joint venture Shengwei Dehua Huaxiang (the company holds 50% of the shares) supplies Tesla’s domestic Model 3 intelligent rearview mirror products. It is estimated that the value of the bicycle will be more than 1,000 yuan.
Considering that the German-German SMR Group is a global supplier of Tesla’s global rear-view mirrors, and that more than 70% of Model Y’s parts are shared with Model 3, it is expected that the company will continue to support domestically produced Model Y rear-view mirror products.
At the same time, the company called Lawrence began supporting Model S aluminum trim products as early as 2014.
In addition, considering that the company’s interior products are located in the world’s first echelon, and are the core suppliers of Volkswagen, BMW, and Mercedes-Benz, they are expected to have excellent product capabilities and good relations of cooperation with Tesla. The value of supporting bicycles is expected to further increase in the future.
The company’s forward-looking layout of thermoformed products has begun to achieve rich substitution and has entered the harvest period.
In 2017, the company completed a fixed increase and raised funds for investment in thermoforming lightweight projects in four new metal parts bases including Qingdao, Foshan, Tianjin and Chengdu.
Starting in 2019, nine thermoforming lines at four bases have successively supplemented mass production, and the company’s profitability has clearly rebounded since the second quarter of 2019.
Thermoformed products are one of the main technical routes for the lightweighting of automobiles. They are widely used in automobile bodies, such as middle channels, A-pillars and B-pillars.
From the perspective of the competitive landscape, through technological breakthroughs by domestic suppliers, the company has gradually seized the global market share of global leaders 北京桑拿洗浴保健 Gestamp, Magna and Benteler, and has begun a large number of alternative processes.
The company’s customer resources are of high quality and fully benefit from the core customers FAW-Volkswagen’s new product cycle.
The company’s main supporting customers are Volkswagen, BMW, Mercedes-Benz and other mid-to-high-end brands, with high-quality customer resources.
Among them, FAW-Volkswagen’s core customer contributed 14% of revenue in 2018.
At the same time, the four new metal parts bases raised by the company are adjacent to the FAW-Volkswagen plant, supporting the new Bora, A3, Golf, CC, Jetta and other models.
From 2018 to 2019, Volkswagen started a new round of strong new model cycles. Among them, FAW-Volkswagen continued to launch six new SUV models and achieved sales of more than 2.1 million vehicles in 2019, not only maintaining the domestic sales champion, but also continuously increasing market share.
As a core supplier of FAW-Volkswagen, the company clearly benefits.
Risk factors: Tesla’s supporting progress is lower than expected; sales of downstream core customers are lower than expected; the company’s capacity utilization is lower than expected.
Profit forecast, estimation and investment advice: Considering the profit contribution of the company’s new product thermoforming, and the core customers’ FAW-Volkswagen cycle bonus, it is expected that the company’s operating cycle will continue to increase, and the company’s EPS forecast for 2019/20/21 will be raised to 1.
24 yuan (2018 EPS 1.
75 yuan, the original 2019/20/21 EPS forecast was 1 respectively.
Current advantages 22.
48 yuan, corresponding to 15/12/10 times PE in 2019/20/21.
Considering that the company supports Tesla’s domestic Model 3 smart rearview mirrors and other products, the value of supporting bicycles has reached more than 1,000 yuan, and it has excellent interior product capabilities. It is expected that the amount of supporting values will continue to increase in the future, which will help the company to scale up and raise the target price28 yuan, corresponding to 15 times PE in 2020, maintain “Buy” rating.