Xinquan (603179): Benefiting from Geely, Jetta’s industrial chain is expected to double in profit from autonomous to joint venture

The core point of view is to enter the Jetta brand industrial chain supporting from independent supporting.

The company’s main products include passenger car instrument panel assemblies and door inner panel assemblies.

Calculating the market size through unit price and market supporting measures, it is estimated that the market space for passenger car instrument panel assemblies and door panel assemblies in 2022 will be 25.1 billion and 206, respectively.

The company entered the Jetta brand new model package in September.

From 2013 to 2018, the average monthly sales of the old Jetta models were 2.

20,000 to 2.

90,000 vehicles.

The VA3 and SUV VS5 models were launched in September, with sales of 1 that month.

10,000 vehicles.

As Jetta’s production capacity climbs, it is expected that the contribution to the company’s revenue will gradually increase in the fourth quarter.

If the sales volume of the Jetta brand is about 300,000 units in 2020, it is estimated that Jetta’s revenue will account for about 15% of the company’s door panel revenue.

Entering the Jetta supply chain will effectively boost the company’s joint venture product revenue and profit share.

  The beneficiaries of the Geely industry chain.

Geely is currently the company’s largest customer, and its main models are all equipped.

  From 2012 to 2018, the proportion of the company’s supporting revenue to Geely increased from 21.

2% increased to 34.

3%.

  Affected by the industry in 2019, Geely’s sales increased by 16% from January to September, and turned positive several times in October.

  With the gradual stabilization of the industry in 2020, Geely’s sales are expected to achieve positive growth for several years, and the stabilization of Geely’s sales is expected to bring breakthrough profit elasticity.

By 2018, the company has 13 ongoing projects for Geely Automobile. The ongoing projects are designed to protect future order growth.

  The unit price of the company’s products and the value of bicycles have increased year by year.

Benefiting from the adjustment of product structure and the high-end of customer models, the average unit price of the company’s passenger car products has gradually increased.

It reached 429 yuan / set in 2016, an increase of 11 in ten years.

5%, the average unit price of H1 in 2019 will further increase to 794 yuan / set.

Benefiting from the increase in unit prices of the instrument panel assembly, door inner guard assembly, and pillar guard assembly, the value of product bicycles increased from 1710 yuan to 2938 yuan from 2013 to 2018, an average annual increase of 11%.

  Customers: Expect to expand more joint venture car company packages from independent packages.

Independent customers are expected to develop more customers. After Geely and SAIC independently, in 2019, it will start supporting BYD, GAC Weilai, GAC New Energy and other independent brand new vehicle projects.

In 2019, the company reached a cooperative relationship with SAIC Volkswagen, and achieved fixed-point development and manufacturing of some new model projects, which will become an important profit growth point for the company in the future.

  Financial forecast and investment suggestions: 杭州夜网论坛 slightly adjust the income and gross profit margin, and it is expected that the EPS for 2019-2021 will be 0.

90, 1.

25, 1.

63 yuan (originally 0.

99, 1.

35, 1.

71 yuan), with reference to the valuation of comparable companies, giving the company 16 times PE in 2020 with a target price of 20 yuan and maintaining a BUY rating.

  Risk warning: Passenger car industry demand is lower than expected, passenger car, commercial vehicle trim product matching volume is lower than expected