2022-03-21 Chen Chuanhong of Guojin Securities Co., Ltd. conducted research on Zhongding Co., Ltd. and released a research report "Smart Chassis Leader, High Technical Barriers Achieve a Wide Moat". This report gave Zhongding Co., Ltd. an increase rating, believing that its target price is 30.61 yuan, the current share price is 16.23 yuan, and the expected increase is 88.6%.
Zhongding Co., Ltd. (000887)
Investment logic
Overseas mergers and acquisitions have created a technical moat, and the leading position of smart chassis is stable. The company's main businesses are sealing, cooling, air suspension and lightweighting. The company has successively acquired overseas companies such as AMK and TFH, mastered core technologies such as ball head hinges and air compressors, and actively promoted the localization of overseas projects, organically combining advanced overseas technologies with China's low production costs, thereby enhancing product competitiveness.
empty suspension: the standard configuration trend is clear, and scarcity guarantees the growth of the company. In the future, with the decline in the cost of core components and the upward configuration of domestic models, the air suspension penetration rate is expected to continue to increase. The company's AMK domestic production has been successfully implemented, and the product cost is expected to drop by more than 20%, further enhancing the product cost advantage. According to the current order, the company's air compressor products have a market share of more than 70%. In the future, it will expand air springs and other products to increase the value of the products supplied. We expect the company's empty-suspension business revenue to reach nearly 900 million yuan in 2022.
Cooling: The value of new energy vehicle products is improved, and refined management and repair overseas profitability. Compared with traditional cars, the battery modules of new energy vehicles have higher requirements for temperature control, so the bicycle value of the cooling pipelines for new energy vehicles is higher. The bicycles with traditional automotive cooling pipelines are worth about 350 yuan, pure electric is about 700 yuan, plug-in and mix is about 1,200 yuan, and extended-range is about 1,600 yuan. At the same time, the company is expected to repair the profitability of overseas business + the proportion of domestic business with high gross profit through refined management, and increase profit revenue. It is expected that the gross profit margin of cooling business in 2022 is expected to reach 20%.
Lightweight: a domestic scarce ball head hinge assembly supplier, expanding categories to help performance growth. The ball head hinge is the core component of the lightweight chassis system, with high technical barriers and low domestic production rate. The company is a scarce domestic supplier of ball head hinge assembly, and high technical barriers ensure business growth. At the same time, the company is expected to help revenue growth by expanding product categories, and it is expected that the revenue of Young Quantitative in 2022 will reach about 1.5 billion yuan.
Investment advice
Company is a scarce target with high short-term fulfillment and long-term logic smoothness. We expect that the air suspension penetration rate will increase rapidly starting from 2022. As the company's orders are gradually implemented, the chassis performance will explode. We expect the company's revenue from 2021 to 2023 will be RMB 13.461, RMB 15.445 and RMB 18.42 billion, respectively, an increase of 17%, 15% and 19% year-on-year; net profit will be RMB 980, RMB 1.119 and RMB 1.354 billion, respectively, corresponding to PE19x, 17x and 14x. Referring to comparable companies, the company will be given a 36-fold PE in 2022, with a target market value of 40.3 billion yuan, a target price of 30.61 yuan per share, and a "overweight" rating is given.
Risk warning
Domestic and foreign automobile sales are lower than expected; domestic and foreign automobile sales are lower than expected; company customer expansion is lower than expected; company's overseas business improvement is lower than expected; goodwill impairment risk; RMB exchange rate fluctuations.
Securities Star Data Center calculates based on the research report data released in the past three years, and the researcher team of Dai Chang of Industrial Securities has conducted in-depth research on the stock. The average prediction accuracy in the past three years is as high as 99.68%. It predicts that the attributable net profit in 2021 will be 1.076 billion yuan, and the predicted PE based on the current price conversion is 18.44.
latest profit forecast details are as follows:
A total of 10 institutions in the stock have given ratings in the past 90 days, 9 buy ratings and 1 increase rating; the average target price of institutions in the past 90 days was 31.2. Securities Star valuation analysis tool shows that Zhongding Co., Ltd. (000887) has a good company rating of 3 stars, a good price rating of 3 stars, and a comprehensive valuation rating of 3 stars. (Rating range: 1 ~ 5 stars, up to 5 stars)
or above content is compiled by Securities Star based on public information. If you have any questions, please contact us.
