Huada Technology (603358) dynamic review: short, medium and long triple-resonance quality customers light up the future

Huada Technology (603358) dynamic review: short, medium and long triple-resonance quality customers light up the future

The leader of automotive stamping parts, the turning point of short-term performance has reached the company. It is a leading domestic manufacturer of automotive body stamping parts. Its technology research and development, production capacity and regional layout are in the leading position in the industry.The competitive landscape is also broad and stable.

From 2016 to 2018, the company’s revenue grew at a compound growth rate of 22%, but the gross profit margin fell downward, mainly due to the rise in steel prices during the period and the company’s cost 厦门夜网 accounted for 80% of the raw material erosion.

Since the second half of 2018, the company’s stamping parts capacity has increased and decreased, while labor costs have increased, and the highest profit will have a certain impact.

In the first three quarters of 2019, the company’s revenue was 26.

42 ppm, at least -3.

1%, net profit attributable to mother 1.

22 trillion, one year -32.

9%; of which the third quarter revenue was 7.

720,000 yuan, at least -7.

4%, net profit attributable to mother 0.

5.3 billion, +37.

7%.

We believe that the passenger car industry is entering a mild recovery cycle. The company has actively explored new customers through deep digging of existing customer orders, and the inflection point for short-term performance has arrived.

The customer structure is excellent, and the 北京夜网 medium-term profit margin is guaranteed. The company’s customers cover mainstream joint ventures and some titled independent enterprises. The top five customers in 2018 include Dongfeng Honda, GAC Honda, GAC Passenger Cars, FAW-Volkswagen, SAIC-Volkswagen, etc.

Beginning in 2020, we are optimistic that the first Japanese brand Toyota will enter a new round of product cycle. There is still room for improvement in the matching ratio between North and South Honda and Volkswagen. The independent leader Great Wall builds a new platform architecture capacity in Taizhou and is a better entry point for the company.Opportunity; in the luxury car field, the company takes Tesla as a breakthrough, and the value of bicycles is on the ceiling; among non-German and Japanese joint venture customers, Hyundai Kia Group is taking over Guangzhou Automobile to become a new growth pole.

We initially estimate that the eight major customer packages before 2022 can support total revenue of 7 billion to 8 billion, corresponding to an overall net profit of 400 million.

The trend of electrification is not contradictory, the acquisition of Hengyi layout long-term track in September 2018 the company to 2.

5.7 billion acquired 51% of Jiangsu Hengyi’s shares, and the underlying commitments for 2018, 2019, and 2020 are to deduct non-attribution net profit of 45, 55, 65 million yuan.

Hengyi specializes in traditional commercial axle products and new energy vehicle products, of which the new energy part includes battery box lower tray assemblies, electric drive gearbox housings, etc.Hengyi received orders from SAIC Times and Geely in 2018, the first half of 2019Newly acquired car companies such as Yutong, Jinlong, Chinese Express, and Jianghuai.

We are optimistic that Jiangsu Hengyi will rely on the parent company’s existing high-quality customer system to quickly cut into large single products in the new energy category, thereby effectively increasing its long-term performance.

Earnings forecast and investment rating: Covered for the first time, giving “Buy” rating, the company’s EPS for 2019/2020/2021 is expected to be 0.

60/0.

74/0.

97 yuan, corresponding to the current expected PE is 21/17/13 times, the first coverage given a buy rating.

Risk warning: the sales volume of supporting customers is lower than expected; the risk of rising raw material prices; the risk that the target’s future performance is lower than the promised.

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