(Report Producer/Author: Soochow Securities, Huang Xili, Tan Xingyue)
. Traditional business is stable, technology is postponed to develop lightweight & intelligent business Baolong Technology was founded in 1997 and is a private auto parts company. The company is based in the automotive industry and develops in the direction of automotive intelligence and lightweighting. The company and its subsidiaries are mainly engaged in the research and development, production and sales of automotive parts products. The main products include exhaust system fittings, valve , automobile tire pressure monitoring system (TPMS), balance weights, sensors, automobile structural parts, and air suspension. The core components of the system are suppliers to many well-known domestic and foreign automobile manufacturers.
1.1. Seven ventures have expanded product lines, and the two-information strategy focuses on the blue ocean future.
Seven ventures have expanded product lines: The company was founded in Shanghai in 1997. In the 25 years since its establishment, Baolong Technology has gone through seven ventures, and its product lines have expanded from valves to valves. From mouth balance weights, exhaust pipes, hot end pipes to TPMS, sensors, automotive structural parts, intelligent driving systems and then to air suspension systems. Its development history can be divided into the following four stages: the first stage, 1997-2000: the company's main business is valves and balance blocks ; the second stage, 2001-2009: the company enters exhaust system fittings and TPMS field; the third stage, 2010-2016: the company began to develop intelligent and lightweight components R&D; the fourth phase, 2017-present: the integration of traditional businesses is accelerated, the R&D of new businesses is intensified, and the volume begins to be gradually increased.
Traditional business is the cornerstone of development, and intelligent & lightweight business is rapidly expanding: The company uses the accumulated technology of valves, balance weights, and metal pipe fittings as the development foundation, and realizes the gradual expansion of product categories through the two product development lines of intelligent and lightweight. Intelligence: The company uses TPMS pressure sensor technology as the cornerstone and gradually expands to position and speed sensors and ADAS smart sensors. It breaks through the process barriers of rubber springs through the accumulated rubber formula experience of rubber valves and realizes air spring Mass production and installation; lightweight: Relying on the company's technical experience in exhaust pipe processing and following the trend of automotive lightweighting, the company has developed a layout of hydraulic lightweight components and has achieved product designation and mass production. At present, the company's products can be divided into three categories: general components, automotive electronics, and intelligent suspension. The traditional and emerging businesses can provide bicycles with a total value of more than 3,500 yuan.
1.1. The ownership structure is clear, and the actual controllers’ shareholdings are relatively dispersed.
As of the end of the first quarter of 2022, the actual controllers of the company are Chen Hongling, Zhang Zuqiu, and Song Jin. Each holds 18.58%, 10%, and 10% of the company’s share capital. 1.35%, and the ultimate beneficiary is Chen Hongling. Chen Hongling and Song Jin are the founders of the company, and they are husband and wife. Chen Hongling currently serves as the company's chairman, and Zhang Zuqiu currently serves as the company's vice chairman and general manager. The actual controllers account for 29.93%. The actual controllers' shareholdings are relatively dispersed.
1.2. The traditional business has developed steadily, and the strategic business has accelerated its growth.
The traditional business has developed steadily: the company's revenue in 2021 was 3.898 billion yuan, a year-on-year increase of 17.01%. The main revenue came from TPMS/automotive metal parts/valve, in 2021 The annual sub-business accounts for 34%/30%/18% respectively. The company's overseas business accounts for a relatively high proportion. Since 2016, the company's overseas revenue has steadily accounted for more than 55%. In 2021, the company's overseas/domestic main business revenue will account for 64%/36% respectively; the company's products are divided into OEM and AM markets. , focusing on the OEM market. In 2021, the company's OEM market and AM market revenue accounted for 72% and 25% respectively.
strategic business is accelerating: the company's strategic business is mainly intelligent and lightweight emerging businesses, including sensors, ADAS, hydraulic lightweight components and air spring vibration reduction products. From 2018 to 2021, the company's new business developed rapidly. In 2021, the emerging business achieved revenue of more than 350 million yuan, a year-on-year increase of 25%.
1.3. The expense rate during the period showed a downward trend, and profitability continued to increase.
The gross profit margin was relatively stable overall, and the expense rate during the period showed an overall downward trend: After the adjustment of accounting standards , the company's main business gross profit margin level in 2021 will be 26.55%. The company's overseas sales account for a relatively large proportion, the proportion of sales of overseas subsidiaries and the proportion of overseas warehousing sales are high. The company needs to bear the transportation and insurance, customs clearance, Warehousing fees make this part of the cost higher. If the impact of freight and other expenses adjusted from sales expenses to operating costs is not taken into account, the gross profit margin of the main business in 2021 will be 33.11%, which can increase by 1.71 percentage points year-on-year. The expense ratio showed a downward trend during the period: As freight and other expenses were adjusted from sales expenses to operating costs, the sales expense rate dropped significantly in 2021. The sales/management/financial expense rates in 2021 were 5.0%/6.2%/1.8% respectively.
continues to invest heavily in research and development, and the net profit rate attributable to its parent company shows an upward trend. In 2021, the company's R&D expense rate reached 7.2%, which is higher than the industry average. This is due to the company's continued investment in the field of intelligent and lightweight components. From 2019 to 2021, the company's net profit margin attributable to its parent company continued to rise, reaching approximately 6.9% in 2021, and profitability continued to trend upward.
1.4. Rich customer resources, global production and R&D layout
is deeply cultivated and rich in customer resources: through nearly 25 years of learning and accumulation, is in product development, quality assurance, cost control, product delivery and customer response. In other aspects, it has established operation and management capabilities that meet the requirements of global benchmark customers, and has become one of the industry leaders in multiple product line segments. The company's main customers include major global and domestic vehicle companies: such as Volkswagen, Audi, Porsche, BMW, Mercedes-Benz, Toyota, General Motors, Ford, Nissan, Honda, Hyundai, Kia, Stellantis, and Jaguar. Land Rover , SAIC, etc.; leading new energy vehicle companies: such as NIO , Xpeng, Ideal, Leapmoon, WM, Hezhong, etc.; large first-tier suppliers: such as Faurecia, Tenneco, BorgWarner, Marelli, Yanfeng, Magna , Continental, Knorr-Bremse, ZF, etc.; well-known independent after-sales market distributors in North America and Europe such as Discount Tire, Tire Kingdom, ASCOT and Würth supply products.
Forge ahead with a global layout of production and R&D: Baolong Technology has formed a domestic development pattern of Shanghai headquarters, R&D center and production park, Wuhan R&D center, Xuancheng Ningguo R&D center and production park, and Hefei regional headquarters, R&D center and production park. Overseas, Baolong already has four subsidiary R&D centers: DILL in the United States, TESONA in Germany, Baofu Electronics in Germany, and MMS in Austria, and four production centers in Hungary Elder, Breiten in Germany, Berndorf in Austria, and OXFORD in North Carolina, the United States. The park has formed a global layout and laid a solid foundation for subsequent development.
. Policies drive the steady growth of TPMS, and the market share of general components performs well 2.1. The front and rear assembly markets are developing in both directions, and policies drive the steady growth of the TPMS market.
2.1.1. Automotive safety products, direct TPMS has become The market mainstream
monitors tire data in real time to ensure driving safety. Tire Pressure Monitoring System is another automotive safety product after ABS (anti-lock braking system) and airbags. It can monitor tire pressure and temperature in real time and give alarms for abnormal tire pressure and temperature. Remind users to maintain reasonable tire pressure. TPMS products integrate automotive electronics technology, sensor technology, and wireless communication technology, and are composed of three parts: a transmitter (fixed in the tire through the valve), a controller (including an antenna), and a display interface (usually integrated in the instrument).
TPMS is divided into two types: indirect type and direct type. The direct type is divided into built-in type and external type.Indirect TPMS refers to a tire pressure monitoring system that does not directly measure car tire pressure, but indirectly calculates tire pressure through other parameters such as wheel speed, frequency and other parameters, and then uses the tire's mechanical model. For example, it directly uses the vehicle's ABS wheels. The speed sensor detects the speed of each wheel, and by comparing the speed difference of each wheel, abnormal tire pressure is found. Built-in direct measurement TPMS installs a transmitter containing a highly sensitive sensor chip on each wheel to monitor tire pressure, temperature and other data in real time while driving or stationary, and transmits it to the controller through wireless radio frequency , displays various data changes on the vehicle instrument and issues an alarm when tire leakage and pressure changes exceed safety thresholds to ensure driving safety. The external direct measurement TPMS screws the sensor to the tire valve , which is easy to install. However, because the sensor is exposed, it is easily affected by external factors such as dust, rain and snow.
2.1.2. Pre-installation market: demand + policy side driven, TPMS accelerates penetration
demand + policy side driven, penetration rate continues to increase: demand side: 1. Security demand. According to data from the Jiejie Industry Information Network, about 30% of traffic accidents that occur every year are caused by explosions caused by tire pressure that is too low or too high, and the rate of accidents on highways caused by tire pressure problems reaches 50%. 2. Fuel consumption and tire life requirements. The data shows that when the tire pressure is 30% lower than the normal value, the unit gas mileage decreases by 6.25% and the tire life decreases by 37%. TPMS can display tire pressure in real time, allowing drivers to detect insufficient tire pressure in time. Real-time feedback data can effectively reduce accidents and avoid increased fuel consumption and reduced tire life caused by insufficient tire pressure.
Policy side: In 2017, the penetration rate of TPMS in the Chinese market was about 30%, and it was mainly installed on mid-to-high-end models. On October 14, 2017, the National Standardization Administration Committee officially approved the mandatory national standard "Performance Requirements and Test Methods for Passenger Car Tire Pressure Monitoring Systems" (GB26149-2017), requiring that starting from January 1, 2019, China All newly certified passenger cars on the market must be equipped with TPMS; starting from January 1, 2020, all passenger cars produced will begin to implement mandatory installation requirements. With the promulgation of the policy, TPMS has achieved 100% penetration in the pre-installation market, and the overall scale will show steady growth. In 2018, the unit price of a transmitter is about 35 yuan/piece, and the unit price of a controller is about 50 yuan/piece. If a single passenger car is equipped with 4 transmitters and 1 receiver, the domestic TPMS front-end market size will reach 3.72 billion yuan in 2025. The overall passenger car market has achieved steady growth.
2.1.3. Aftermarket: The battery is exhausted and enters the replacement cycle, and the after-sales market grows steadily
For the after-sales replacement market, as more and more TPMS transmitters in the domestic, North American and EU markets enter replacement due to battery exhaustion Cycle, the theoretical service life of the battery is 10 years. Depending on the local conditions, driving mileage, driving environment and other factors, the service life under actual use conditions is 5-7 years. TPMS works in a sealed environment. Replacing the battery alone will destroy the sealed environment and affect the safety of TPMS. Therefore, the entire transmitter needs to be replaced after the battery is exhausted. The market size of after-sales replacement parts has grown steadily. Based on calculations based on domestic, American, and major European countries (Britain, France, and Germany), the total demand for TPMS transmitters is approximately 180 million based on a 5-year replacement cycle. If the price of the transmitter in the aftermarket is 1.2% of that of the front-mounted transmitter, Calculated by multiple times, the market size of the global major aftermarket demand in 2025 is approximately 6.3 billion yuan, with overall steady growth.
2.1.4.TPMS leader, combining the triple advantages of technical performance + market barriers + business channels
company TPMS competitive advantages are mainly reflected in three aspects: strong technical performance, high market barriers, and wide business channels. Strong technical performance: The company began to develop TPMS products in 2002. At present, the passenger car/commercial vehicle products have gone through 10/6 iterations respectively. The adaptability of the wheel hub has been continuously enhanced, and the size and weight have been continuously reduced. TPMS can provide warnings, display data, inflation detection, automatic positioning, flameout monitoring, fault diagnosis, and tire positioning when tire pressure is abnormal.The dedicated TPMS chip integrates pressure, temperature, acceleration sensor , as well as MCU, RF transmission and low-frequency circuits. The low frequency is more stable, and the pressure sensor is more reliable; it can realize pressure and temperature monitoring, WAL automatic positioning, and PAL automatic positioning; and power consumption Low, different control strategies can be adopted according to different power supply modes to ensure low power consumption of the power supply. Due to the excellent technical performance of the products, the company's TPMS products also won the first prize of Shanghai Science and Technology Award and Songjiang District Science and Technology Progress Award.
has high market barriers: leading market share in the world: in 2018, the company's market share has reached the first place in the country and the sixth place in the world, and has formed stable cooperative relationships with many vehicle manufacturers. After establishing the Baofu Electronics joint venture with Huofu Group, the company's TPMS business market share ranked third in the world in 2020.
In 2021, the company achieved TPMS revenue of 1.332 billion yuan, accounting for approximately 34% of total revenue. Sales volume is distributed in the OEM and AM markets. In 2021, the sales volume of the sub-markets accounted for 88.5% and 11.4% respectively. The total sales of transmitters reached approximately 32.83 million units. According to our calculations, the company’s national TPMS market share (revenue caliber) in 2021 reaches about 25%.
OEM High stickiness: Since model development generally has a lead time of two years, OEMs, first-tier suppliers, and second-tier suppliers have formed a mutually supportive and mutually dependent relationship. If a new supplier is replaced, the OEM will need to re-adjust with the new supplier in terms of product development speed, product quality, delivery timeliness and supply guarantee capabilities, resulting in increased time and communication costs. At present, the company has supplied SAIC-GM , Dongfeng , Changan and other high-quality customers. In early 2020, it also won the designation of Toyota Motor's main model. Market share and stickiness of OEMs build a moat for the company’s core capabilities of TPMS products.
has a wide range of business channels; Baofu Electronics was established to achieve global business collaboration. In November 2018, the company signed an agreement with the German Hofer Group, which ranks fifth in the TPMS market share, to merge their respective TPMS businesses and comprehensively expand sales channels. In January 2019, Baofu Electronics, a joint venture established by the company and Huo Fu Group with 55% and 45% investment respectively, was officially put into operation. It fully integrated the TPMS business of both parties in China, Europe and North America, and deeply integrated the four aspects of R&D, project management, manufacturing and procurement. In all aspects, we leveraged our business channel advantages to significantly improve gross profit levels and obtain new business orders. Before the
joint venture, the German company's customers were concentrated in foreign high-end brands such as Mercedes-Benz, BMW, Audi, Porsche, Ferrari, and the company's customers were concentrated in independent brands such as SAIC-GM, Changan, -Wuling, SAIC Passenger Cars, and Geely. After the establishment of the joint venture, Baofu Electronics took advantage of the German side's "rigorous R&D, precision manufacturing" and the Chinese side's "quick response, low-cost manufacturing" and adopted a market development approach of "different markets, different strategies, and different team compositions" to further win new customers. With its global service capabilities, it has added many important customers such as Toyota China and a Mercedes-Benz production platform.
2.2. Leading market share of valves & balance weights & metal pipe fittings, traditional business continues to upgrade
2.2.1. Valve: The overall market demand is stable, and the proportion of TPMS valves continues to increase
The company is the leader in the valve industry, a Tier 1 customer Including OEMs such as Ford, Geely Automobile , etc. Tier 2 customers include well-known international manufacturers such as mainland China. According to the prospectus, the company's domestic market share reached 16.43% in 2015, the North American market reached 16.07%, and the European market reached 8.49%. The main products include snap-on valves, metal valves, TPMS valves, etc. The company serves as the deputy director unit of the Valve Core Professional Committee of the China Chemical Industry Association, the chairman unit of the Valve Sub-Technical Committee of the National Tire Rim Standardization Technical Committee, and a member unit of the European Tire Rim Technical Organization and the American Tire and Rim Association Industry Association. And has won many honors such as China Automotive Aftermarket Recognized Brand, National Torch Plan , Ford Q1 Certification, GM Global Supplier Quality Excellence Award, etc.
In 2021, the company’s valve revenue was 688 million yuan, accounting for approximately 18% of total revenue.The main market is dominated by the AM market. From 2019 to 2020, the AM market valve revenue accounted for about 70%. The overall revenue follows the changes in global automotive OEM and AM demand. With the gradual popularization of TPMS, TPMS valves and accessories The proportion of valves will also continue to rise, the value has increased compared with traditional valves, it is expected to bring incremental revenue, and the overall market demand is stable.
2.2.2. Balance block: stable profit level, high customer recognition
Balance block is the basic material for wheel dynamic balance correction. Appropriately increase the counterweight where the wheel mass is small to maintain the dynamic balance of the wheel under high-speed rotation and ensure The quality of automobile wheels is uniform. The company's balance block revenue in 2018 was approximately 131 million yuan, accounting for approximately 6% of total revenue; the gross profit margin range was between 29% and 36% during 2015-2018, and the profitability level was relatively stable. The company's balance weight products have entered many OEMs such as BYD, Ford, Geely, etc., and have won customer honors such as SAIC Volkswagen's A-level supplier and Würth's excellent supplier.
2.2.3. Metal pipe fittings: Exhaust system pipe fittings account for a large proportion, accelerating lightweight layout
Exhaust system pipe fittings account for a large proportion, and are mainly sold to the OEM market: the company’s metal parts segment’s revenue in 2021 is 1.165 billion yuan, accounting for about 30% %. In the metal parts sector, exhaust system fittings account for a relatively large proportion. The company's exhaust pipe fittings mainly include exhaust tail pipes, rear tail pipes, hot-end pipe fittings and mufflers. Baolong Technology is gradually implementing automated production plans for diversified non-standard products, using to reduce staff and increase efficiency. It has always maintained a leading position in the industry. In 2015, the company's domestic market share of exhaust pipe fittings reached 37.84%. The company's exhaust pipe fittings are mainly produced for the OEM market. From 2016 to 2020, the sales ratio of OEM exhaust pipe fittings was stable at more than 97%.
Baolong Technology has the ability to independently design and process molds/tooling/inspection tools, effectively control costs and time, and has the technical strength to develop collaboratively with customers. The company's product customers include first-tier brand OEMs such as Audi, BMW, BYD, etc., and has won many honors such as Tenneco's A-level supplier, Faurecia Global Supplier, and GM Global Supplier Performance Excellence Award. Establish a joint venture to accelerate the lightweight process. In August 2018, Baolong Technology and the Salzgitter Group signed an agreement, each investing 51% and 49% to establish the joint venture company Baolong Shazkida (Anhui) Hydraulic Forming Co., Ltd. to accelerate lightweight layout and enhance the company's expertise in the field of hydraulic molding technology. competitiveness. Compared with traditional stamping and welded products, the weight of hydroformed structural parts is reduced by 20%-30%, achieving energy saving and emission reduction of automobiles. In addition to achieving lightweight, hydroformed pipe fittings have improved stiffness and fatigue strength and good collision safety. At present, the company's lightweight products include subframe cross tubes, subframe reinforced tubes, bow tubes, U-shaped beams, torsion beams, etc., which have been supplied to mainstream car companies such as BYD and Great Wall.
. The popularity of air suspension is accelerating, and technology + first-mover + production capacity advantages help product volume 3.1. Improve the driving experience. High-end configurations, driven by demand + supply, accelerate the popularity
3.1.1. High-end configurations of luxury cars, improve the driving experience
Air suspension The system enables the height of the body chassis to be adjusted. Some luxury models adopt an air suspension configuration. The most obvious difference between air suspension and ordinary suspension is that the air spring is used instead of the metal coil spring . The air volume and pressure of the air spring are adjusted through the air pump . Change the hardness and elastic coefficient of the air spring. By adjusting the amount of air pumped in and the stroke and length of the air spring, the vehicle chassis can be raised or lowered. Air has better vibration isolation effect, and the stiffness continuously changes with the load. 1) The air spring is filled with air and is compressible. It has a better vibration isolation effect than a steel spring. When encountering an impact on an uneven road surface, many small vibrations are not easily transmitted to the car through the air spring, effectively improving driving comfort; 2) As the load increases, the air inside the air spring is continuously compressed and the stiffness changes continuously, which can realize a non-linear stiffness curve and improve the riding comfort.
High cost leads to low penetration rate, and the passenger car market has large space.The supply price of a complete air suspension system is about 12,000-14,000 yuan. In passenger cars, it was initially mainly installed in luxury models of more than 700,000 yuan, such as BMW 7 Series, Mercedes-Benz S-Class, and Land Rover Range Rover. As market competition among new car-making forces intensifies, functional differences have become a selling point for major car companies. The demand for air suspension has increased significantly, and the price range has continued to drop. According to our calculations, the penetration rate of air suspension for passenger cars nationwide in 2021 will be about 1.8%, and after excluding imported cars, the penetration rate will be about 0.7%, indicating a lot of room for growth.
3.1.2. The system has a complex structure and improves comfort and controllability.
The air suspension parameters are adjustable, effectively improving driving comfort and controllability. In addition to upgrading the original mechanical coil springs and passive shock absorbers to air springs + electronically controlled dampers, air suspension also adds an air supply system and a complex electronic control system, allowing the air spring to pass through the spring. The charging and discharging of air pressure effectively changes the height and stiffness of the vehicle body. Depending on the structure, it is mainly divided into two types: bladder type and membrane type. The electronically controlled shock absorber can adjust the softness and hardness of the suspension through changes in the damping coefficient . The two work together to improve driving comfort and control.
Bladder air spring: It consists of a rubber air bag sandwiched with cords and compressed air sealed in it. The inner layer of the air bag is made of air-tight rubber, and the outer layer is made of oil-resistant rubber. There are single-section and multi-section types. Waist rings are used between sections to prevent radial expansion and friction between sections. Cover plates are provided at the top and bottom to seal them. The more sections, the better the elasticity, but the sealing performance is poor. Multi-purpose on commercial vehicles. Diaphragm air spring: The airtight air bag is composed of a rubber diaphragm and a metal pressed part. Compared with the bladder type, its stiffness is smaller, the natural vibration frequency of the body is lower, its size is smaller, and it is easier to arrange. It is mostly used in passenger cars. However, it is expensive and has a short lifespan. The
system has a complex structure, and multiple components work together to realize the parameter adjustment function. The main components of the air suspension system are composed of the air supply system ( compressor , air storage tank , distribution valve), ECU, air spring, CDC shock absorber, various sensors and related supporting pipelines. The ECU receives signals from various sensors, determines the movement status of the vehicle body (speed, acceleration, road impact, etc.), and adjusts the status of the chassis. The compressor provides an air source, and the air bag is inflated and deflated through the distribution valve to adjust the stiffness of the air spring and the height of the vehicle body. By adjusting the damping coefficient of the CDC shock absorber, the suspension parameters are adjusted in real time.
3.2. Car companies require splitting supply and promoting independent accelerated breakthroughs.
The suspension system continues to be upgraded, and the value of the air suspension system doubles. 1) The passive suspension uses a combination of coil springs and immutable dampers, and the value of the bicycle is about 1,400 yuan; 2) The semi-active suspension upgrades the CDC shock absorber, and the value of the shock absorber increases from 1,000 yuan to 3,000 yuan, and adds body sensors. , the value of the suspension system bicycle increases by 2200 Yuan; 3) active suspension upgrades the air spring, and adds a complete air supply system (air compressor + air tank + ECU + air/signal pipeline), the value of the bicycle increases by 5,200 yuan. The split supply of
has accelerated the localization process of core units, and independent enterprises have achieved mass production. The two core components of the air suspension system: air springs and air supply units have high technical barriers. For a long time, air suspension assemblies and accessories have been mainly supplied by overseas suppliers. The value of a bicycle is more than 10,000 yuan, and some are as high as more than 20,000 yuan. In order to reduce the system configuration cost, the main engine manufacturer split the assembly into separate points, providing opportunities for domestic local suppliers to break through at a single point.
3.3. Market competition has escalated, demand + supply have driven the accelerated popularization of new energy vehicles, and the quality of new energy vehicles has improved, and range anxiety has become a core concern of consumers. Driven by the dual promotion of policy + market, the penetration rate of domestic new energy vehicles has increased rapidly, from 2.7% in January 2020 to 20% in November 2021. The quality of new energy vehicles has been significantly improved compared to fuel vehicles. according to.In February 2021, " China Automobile Dealers Association " published the article "How to solve the range anxiety of new energy vehicles?" ", mentioned that according to the association's interview survey results on the car experience of new energy vehicle owners, the issue that users are most concerned about when purchasing is "battery life", accounting for 31.8%. Range anxiety has become the core of consumers purchasing new energy vehicles. Pay attention to the content.
reduces wind resistance + effectively reduces weight, and new energy vehicle companies have increased demand for air suspension. 1) The most direct function brought by air suspension is the adjustable height of the vehicle body. When a car is driving at high speed, more than 60% of the power is consumed in fighting wind resistance. When the speed exceeds 200km/h, the energy consumption in fighting wind resistance accounts for more than 85%. Vehicles equipped with air suspension can lower the ground clearance of the chassis when driving at high speeds, reducing wind resistance and thus reducing energy consumption. 2) Compared with the metal parts of traditional suspension systems, air suspension systems can effectively reduce weight, thereby increasing the cruising range of new energy vehicles.
Consumption upgrades + self-owned brand breakthroughs will jointly promote increased demand. According to the results of the "2021 Independent Brand Car Crowd Survey", from the perspective of car purchase factors, compared with traditional independent brands, smart technology and driving experience are the main selling points of independent new power brands and independent high-end brands. Air suspension is also in line with this. Two requirements. In the process of independent traditional/new power brands continuing to break through to high-end, they are also constantly providing consumers with a more comfortable driving experience and higher "cost-effectiveness", which makes the market demand for air suspension continue to increase. The price of equipped models has dropped significantly, and the air suspension market has broad space. At present, all NIO series are equipped with air suspension models, and the lowest price has dropped to 390,000 yuan; Hongqi many electric vehicles are equipped with air suspension, and the lowest price is more than 400,000 yuan; Lantu FREE and jikrypton001 are priced in the range of 300,000 yuan. Although only mid-to-high-end configurations can be equipped with air suspension systems, they are often 70 yuan compared to the past. Compared with high-end models starting at 10,000 yuan, the price has dropped significantly.
Increased demand + falling costs jointly promote the accelerated popularization of air suspension. Demand side: 1) Increased penetration of new energy brings demands for increased mileage and weight reduction; 2) Upgraded consumer demands bring demands for smart technology and driving experience; 3) The “cost-effectiveness” brought about by the breakthrough of independent brands into high-end products "Configuration demands jointly promote the increase in demand for air suspension. Supply side: 1) Automobile companies require the split supply of assemblies, which will lead to accelerated breakthroughs by independent suppliers; 2) Domestic substitution will bring about a continuous decline in system costs, further accelerating the popularization of air suspension. The penetration rate is expected to accelerate, and the floating market has broad prospects. According to estimates, as of December 2021, the air suspension penetration rate in the domestic new car market is approximately 1.8%, of which the market penetration rate of imported cars is approximately 25.3%, and the market penetration rate of domestic passenger cars is approximately 0.7%. As the popularity of air suspension accelerates, the penetration rate of the domestic passenger car market is expected to reach 11.6% in 2025, with a market space of 16.3 billion yuan and a CAGR of 51.3% from 2021 to 2025.
3.4. Deep technical accumulation, process + market + production capacity advantages help customers obtain
company's air suspension products have three advantages in technology, market and production capacity, helping to bind high-quality customers and achieve mass production of products.
3.4.1. Process advantages: Deep accumulation of rubber technology, rich product lines
Rubber valve product technology builds the foundation, extending the field of air springs longitudinally: air springs are the core components of the air suspension system, and the air springs must be constantly folded on the suspension Due to the twisting deformation, the quality and fatigue requirements of rubber parts are much higher than those of traditional tires or seals, which need to be verified through large-scale fatigue tests to determine. Its technical barriers are mainly reflected in the high fatigue resistance requirements, long initial research and development cycle, large investment in process testing and the difficulty in obtaining some parts. Baolong Technology has been engaged in the development and production of valve products since its establishment. It has a rich practical foundation for the overall research and development of rubber materials, long testing times, and control of process flows, and has accumulated a large number of rubber formulas on rubber valve products. Experience is the technological basis for air spring research and development.
Process accumulation has achieved technological breakthroughs, and the technical strength of air spring products is leading: the company's air springs use high-quality raw rubber and cord materials from internationally renowned suppliers, and independently develop the industry-leading chloroprene + natural rubber mixing formula to achieve formula and mixing. , calendering , molding, vulcanization , and the entire process chain of assembly are independently controlled, with leading assembly efficiency, and continuous improvement of rubber materials properties, flexure, ozone, hot air aging, salt spray, comprehensive performance of air springs, blasting, high and low temperature fatigue, room temperature fatigue and other parameters to meet all customer test requirements. The overall process control of air springs needs to meet stringent system audits such as TATF16949 and VDA6.3 by international customers. Among them, the sleeve air spring meets the 80°C high temperature double action test of 1 million times, the normal temperature 10 million times and the -35°C low temperature fatigue test, meeting the most demanding test standards of internationally renowned customers, and the diaphragm air spring meets the 5 million times normal temperature test. The fatigue test exceeds the 3 million times requirement stipulated in the national standard. In terms of spring assembly, the company has spent more than 10 million yuan in a research and development cycle of more than 3 years to successfully break through the withholding process in air spring assembly, and the air spring technology has reached the leading domestic level.
has strong development capabilities and a rich product line of air suspension components: Baolong has the ability to develop active suspension control systems, including electronically controlled air suspension systems with adjustable height and stiffness for passenger cars, and electronically controlled variable damping suspensions. system, as well as an electronically controlled active suspension system with adjustable stiffness, height and damping. The company can independently provide core components such as air springs, electronically controlled shock absorbers, integrated air shock absorbers and control units ECU, with a rich product line.
3.4.2. Market advantages: forward-looking layout of the industry, core components obtained orders from leading OEMs,
commercial use to drive passenger use, forward-looking entry into the field of air suspension. In 2012, the company began to develop air springs for commercial vehicles, and it has been nine years since then; in 2018, the company cooperated with Tongji University and other institutions to develop the "intelligent air suspension system" topic, and cooperated with top joint venture brands and independent brand vehicle manufacturers Establish a project to carry out localized alternative development or early-stage technology reserve projects to develop a control system based on AutoSAR. Focusing on the supply capacity of core components of air springs, the first-mover advantage is obvious: The company takes the supply capacity of air springs as the cornerstone and gradually expands to other core components such as air storage tanks. The core product has obtained several fixed points, and the single air spring product has obvious first-mover advantages. . Current customers of the company's air suspension components: Commercial vehicles: Currently, it has customers such as ZF, Fuvian Dato, Beijing Guanghua Rongchang, Shanghai Coman, China Highway Vehicle Machinery Co., Ltd., Guangzhou Huajin and SAF-Holland, etc. The customer provides air spring products for commercial vehicles.
Passenger cars: In 2020, the company's air springs and shock absorbers were designated as OEMs for NIO's ET7 model (passenger cars). As of the end of 2021, Baolong Technology's air spring shock absorber strut assembly and independent air springs have received five host project appointments from leading new energy brand car companies. Compared with domestic air suspension core component suppliers, the company has 25 years of Tier1 and main engine supporting experience. It is derived from rubber technology and focuses on the air spring business. As of June 2022, it has received air spring orders from several head engine manufacturers. , has a large market advantage in core single products, laying a solid foundation for subsequent expansion of assembly products.
3.4.3. Production capacity advantage: The Hefei factory was built, and air suspension products were officially rolled off the production line.
products were rolled out in mass production, and domestic substitution accelerated the layout: in the past luxury models, air suspension system components were all made by foreign suppliers such as Continental and Vibach. Mainly, local suppliers have little room to intervene. On December 28, 2021, Baolong Technology Hefei Park was officially opened and mass-produced passenger car air spring shock absorber strut assemblies and independent air springs. The production line has an annual production capacity of 100,000 vehicle air springs. As of mid-2022, the company is one of the few independent companies in China that has achieved mass production of air spring products. In the future, Baolong Technology plans to build 6 more production lines to achieve an annual output of more than 500,000 vehicle air springs and accelerate the layout of domestic substitution.
. Intelligent product lines continue to expand, and the sensor & ADAS business is gradually increasing. 4.1. Sensors: the market scale is growing rapidly, and there is a broad space for domestic substitution.
4.1.1. Core components for operating condition information transmission, and the trend of electric intelligence promotes rapid growth on the demand side.
The core component of working condition information transmission, assisting the electronic control unit in making correct decisions: automotive sensors serve as automotive electronic control systems (transmission (sensor, controller, actuator) information source, which can reflect important information such as vehicle operating status, driving control status, control situation, etc., and will include various working condition information such as vehicle speed, temperature of various media, tire pressure, and engine operating status. It is converted into electrical signals and inputted to the electronic control unit to adjust the vehicle to the best working condition. According to different mechanisms and functions, sensors can be divided into body sensing sensors and environment sensing sensors.
body sensing sensors are mainly used in powertrain systems, body control systems and chassis systems. After the collected information is processed by the electronic control unit, instructions are formed to the actuators to complete the electronic control of the body. They are divided into pressure sensors , position sensor, temperature sensor, acceleration sensor, angular velocity sensor, flow sensor, odor concentration sensor and liquid level sensor 8 categories. In the era of intelligence, environmental perception sensors have become the core of autonomous driving, performing environmental perception and planning and decision-making. Currently, the mainstream sensor products used in environmental perception mainly include visual sensors, radar sensors, and positioning sensors. The corresponding main products are lidar. , millimeter wave radar, ultrasonic radar and camera.
Benefiting from the trend of electric intelligence, the sensor market continues to expand: a mid-range traditional car is equipped with more than 90 sensors, of which about 45-60 are installed in the powertrain system, more than 20 are installed in the body system, and the chassis system Approximately 30-40 pieces are assembled in the center.
Under the trend of electrification, the demand for current sensors is increasing: In new energy vehicles, in order to improve the efficiency of the vehicle battery pack and understand the working conditions of the motor electric drive control system, it is necessary to use current sensors to measure the current, voltage, and temperature in the three-electric system. Three main measurement parameters are used for measurement, detection and control. Generally, 5-6 are used for bicycles. Under the trend of intelligence, the use of perception sensors is increasing: with the continuous popularity of L2/L2+ penetration, the entire vehicle needs to identify the surrounding environment of the vehicle body through environmental perception sensors, and the usage of bicycles continues to increase with the improvement of intelligent driving levels. As the penetration rate of electric smart vehicles continues to increase in the future, the demand for body and environment sensing sensors will grow rapidly, and the number of sensors used in the entire vehicle will reach hundreds. According to the forecast of the Forward-looking Industry Research Institute, the size of China's automotive sensor market is expected to be 2026 Reaching 98.2 billion yuan, the market space is vast.
4.1.2. Self-research + mergers and acquisitions to expand product lines and seize the core opportunity of domestic substitution
Technology extension + mergers and acquisitions to help the rapid development of the sensor business: The company has accumulated and mastered pressure sensors during the mass production of TPMS tire pressure sensor products The core technology continues to expand to other sensor categories such as speed and position; while extending the technology, the company also continues to acquire larger market share through mergers and acquisitions. In August 2018, the company fully acquired PEX Company and acquired 51% of the equity of TESONA in Germany. PEX Company mainly supplies automotive brake wear sensors, exhaust gas temperature (EGT) sensors, and Hall sensors. It is one of the market leaders in brake wear sensors. 1. Customers include Mercedes-Benz, Volkswagen, Audi, Porsche, etc. TESONA’s main business is sensors and smart heating systems (SHS) The design and development of the company provides technology development services to German vehicle companies and first-tier suppliers. This merger will help realize the global layout of the automotive sensor business and serve more global customers.
In February 2022, the company acquired 55.74% of the equity of Longgan Technology, effectively expanding the company's business scale and acquiring high-quality customer resources, reducing the procurement cost of raw materials through synergy, improving the company's automotive sensor product series, and helping the company in automotive Become a leading domestic supplier in the field of speed and position sensors.
has a rich product matrix, and domestic substitution continues to accelerate.In the past, 90% of the domestic sensor market share was occupied by foreign suppliers such as Sensata Technology and Bosch, and domestic manufacturers had a smaller market share. With the uncertainty of the supply chain caused by external environments such as core shortages and epidemics, it is difficult for foreign manufacturers to cover the production capacity ramp-up needs of all domestic customers. Domestic enterprises rely on the domestic market to respond quickly, rich technology accumulation and sufficient Advantages such as large-scale production capacity supply have ushered in a window period for domestic substitution. In the process of domestic substitution, vehicle companies generally require the supply of complete sensor packages to reduce product substitution, communication and debugging costs.
At present, the company has mastered and applied core technologies such as MEMS and optics, and can provide OEMs with six categories including pressure, optics, speed, position, acceleration, and current, with a total of more than 40 subdivided applications. Car-grade sensor products, with a complete product matrix, can form a complete combination and enter the OEM supply system, with strong market competitiveness. At present, the company's self-developed sensors have been supplied to multiple customers: optical rain sensor customers include Fengxing and Chery Other OEMs, automotive pressure sensors include SAIC-GM, Dongfeng Nissan and other OEMs.
4.1.3. Production capacity construction is accelerated, sensor business layout is accelerated
Domestic project construction is accelerated, and European factory capacity construction is about to be completed: In September 2020, the company issued a private placement announcement, planning to invest 721 million in a vehicle sensor project with an annual output of 26.8 million units Construction, main products include MEMS pressure Force sensors, wheel speed sensors, light and rain sensors, visual sensors, millimeter wave radar and other automotive sensors; In February 2022, the company invested 15 million euros in a sensor production park in Hungary that has officially started construction, and the new factory in the park is planned to be opened in 2023 Started operation at the beginning of the year. In 2021, the company achieved 8.984 million sensors, a year-on-year increase of 31.23%. After the production capacity construction is completed, the company's mass production and delivery capabilities will be enhanced, and the sensor business can become a new growth point for the company's business.
4.2.ADAS products: The market space is vast, self-research + strategic cooperation empowers
4.2.1. Intelligent driving core technology, domestic alternative space is large
Perception function is the basis to help realize intelligent driving core technology: ADAS (Advanced Driving Assistance System) advanced assisted driving system uses various sensors installed on the car to collect environmental data inside and outside the car at the first time, and performs technical processing such as identification, detection and tracking of static and dynamic objects. This provides information assistance, early warning, auxiliary control and active safety technologies that facilitate driving. The sensors used in ADAS mainly include cameras, lidar and ultrasonic radar, which are usually located on the front and rear bumpers, side mirrors, inside the steering column or on the windshield of the vehicle. According to the automobile driving automation classification standards of the Ministry of Industry and Information Technology of China, driving automation is divided into six levels, L0-L5. Different levels have different requirements for intelligent driving. Among them, ADAS driving assistance is the basis for realizing intelligent driving and mainly covers L0-L2 automation levels.
Different sensors have different functions, and there is a lot of room for domestic substitution: There are three common sensor types in ADAS environmental perception, cameras, lidar, millimeter wave radar and ultrasonic radar. The functions of each module are different. According to our calculations, the average penetration rate of L1 functions will reach 36.2% in 2021, and the average penetration rate of L2 functions will reach 25.1%. According to data from Goldman Sachs and Boston Consulting Group, the cost of an L1-level ADAS bicycle is about 3,200 yuan, and the cost of an L2-level ADAS bicycle is about 11,000 yuan. Yuan, it is estimated that the scale of domestic ADAS will reach 1800 More than 100 million yuan, the compound growth rate from 2021 to 2025 will reach 23%, and the overall market space is broad. From the perspective of the global market competition landscape, ADAS sensors are mainly monopolized by overseas manufacturers such as Aptiv, Bosch, Denso, Continental, Valeo, Veoneer, etc. According to data from the Huajing Industrial Research Institute, the market share of pre-installed ADAS suppliers CR6 in 2021 Accounting for more than 80%, as a large number of domestic companies have deployed in the field of ADAS sensors, there is considerable room for domestic substitution based on the advantages of cost reduction and fast response speed.
4.2.2. Surround view products have been put into mass production and continue to empower autonomous driving.
The price of models equipped with ADAS functions has dropped. The company’s products are positioned in the incremental blue ocean market: the company began the development of vision systems and millimeter wave radars in 2013. Its current main products Including 360-degree surround view system and intelligent assisted driving system. As the automotive industry changes, intelligent driving has entered a stage of increasing penetration of ADAS (advanced driver assistance systems). ADAS functions that were only available on some high-end models in the past, such as adaptive cruise, automatic braking, road departure warning, etc., have been delegated to more and more low-level models. This will add to the 360 surround view system that the company has mass-produced. ADAS products such as dual-view systems and DMS bring a broad incremental market. The company's current surround-view product matrix includes front-view, rear-view and other cameras, and its customers include Geely Automobile, FAW Car and other OEMs.
intelligent assisted driving products: The company's intelligent assisted driving includes face recognition/FACE ID, fatigue driving monitoring, interactive cameras, 24GHz&77GHz millimeter wave radar and thermal imaging night vision system. Among them, millimeter-wave radar has the advantages of all-weather, high accuracy, strong penetration, and strong anti-interference ability, which is a favorable guarantee for autonomous driving. The 24GHz & 77GHz radar developed by the company strives to achieve small size, high precision, high range environmental perception and space obstacle target detection and tracking to achieve safe driving. It is expected to achieve greater performance breakthroughs under the wave of intelligence.
4.2.3. Strategic layout is accelerated, and segmented fields continue to be developed.
strategically cooperates with Chuhang Technology to focus on expanding millimeter wave radar segmented business. In March 2021, Baolong Technology and Chuhang Technology each invested 60% and 40% to establish a joint venture, focusing on expanding business in the 77GHz millimeter wave radar segment, seizing the window period of the millimeter wave radar market, and continuing to support domestic substitution. Joining hands with Black Sesame Technology, parts supply + high-performance chips create a win-win situation. In April 2021, Baolong Technology and Black Sesame Intelligence signed a strategic cooperation agreement to make full use of Black Sesame's technical advantages in the fields of autonomous driving, artificial intelligence, and high-performance automotive computing chips to jointly improve domain controllers, sensors, assisted driving systems and other intelligence The independent innovation capabilities and application level in the driving field have complemented each other's advantages and continued efforts in autonomous driving.
deepens cooperation with Yuanhuo Technology and develops efforts in the field of stereoscopic vision: Baolong Technology and Yuanhuo Technology began to cooperate in binocular stereo vision technology in 2018, and have achieved many results in the past four years. In terms of ADAS, we cooperate with Knorr-Bremse on LDW (Lane Departure Warning System) and PAEB (Pedestrian Automatic Emergency Braking System) binocular systems, targeting Hino Motors, Qingdao Jiefang Automobile, SAIC Ivek Hongyan and other OEMs. And has achieved mass production; in terms of active suspension, the road preview system has won the front-end installation designation of first-tier passenger car companies. It is the first domestic active suspension road preview system front-installation project based on binocular stereo vision. In April 2022, the company and Yuanqiao Technology jointly invested in the establishment of Oaklong Technology (Suzhou) Co., Ltd. to deepen cooperation in car-level vision chips, jointly expand the passenger car stereo vision business, and strive to bring greater breakthroughs to the company's ADAS products.
strategically invests in Lingmu Technology to jointly expand the intelligent driving business: In October 2020, Baolong Technology and Lingmu Technology established a joint venture, which has achieved many results in intelligent driving related technologies and products: the PAEB commercial vehicle emergency braking jointly developed by the two parties The project is supporting more than 10 models and has achieved mass production in 2021; the 1V1R monocular vision law requirements have been designated by 3 OEMs; in terms of passenger cars, the parking integrated domain controller was launched in 2021. At the beginning of 2022, it obtained a new energy vehicle designation. In 2022, the company strategically invested in Lingmu Technology. Based on the accumulation of Lingmu Technology's intelligent driving domain controller and AI visual processing analysis technology, it will enhance the depth of cooperation in the field of intelligent driving and jointly expand the intelligent driving business.
(This article is for reference only and does not represent any investment advice on our part. If you need to use relevant information, please refer to the original text of the report.)
Selected report source: [Future Think Tank] Future Think Tank - Official website
