As the prosperity of the new energy vehicle market continues to rise, domestic auto parts have also ushered in a historical opportunity.
Among the more than 100 auto parts concept stocks in A-shares, Huayu Automobile (600741.SH) is in the forefront in terms of revenue scale and volume.
In terms of market capitalization, Huayu Automobile's current market value is close to 87 billion yuan, second only to Weichai Power (000338.SZ) and Fuyao Glass (600660.SH). However, from the perspective of stock price performance this year, the stock price trend of Huayu Automobile is not satisfactory, with a cumulative decline of 0.76%, and its competitors in the field of automobile lightweighting, such as Tuopu Group (601689.SH), Xusheng Shares (603305.SH) and Wencan Shares (603348.SH), have double-digit gains during the year.
According to the data of Flush, Huayu Automobile has not been on the Dragon and Tiger List in the past year, and Tuopu Group and Xusheng Shares have both recorded on the Dragon and Tiger List.
For Huayu Automobile, which has a very wide product line, its performance is not easy to predict. According to the statistics of Tonghuashun, in the past six months, Huayu Automobile has obtained 20 institutions to make forecasts for its performance, predicting that the highest net profit will be 6.951 billion yuan and the lowest will be 5.613 billion yuan, with a huge difference.
Although the scale of revenue and profit is large, in the first half of 2021, the net profit margin of Huayu Automobile is only 5.14%, which is in the middle and lower reaches of more than 180 auto parts concept stocks in A-shares, giving the market the feeling that it is big but not strong.
Dabble in many products
HUAYU Motors is a holding subsidiary of saicut motor (600104.SH), which currently holds a 58.3% stake in the company.
In the past, Huayu Automobile was supported by SAIC. In order to enhance its marketization capabilities, HUAYU Automobile has long increased its product line through the "endogenous + epitaxial mergers and acquisitions" approach to cater to the huge domestic auto parts market.
For example, in 2009, Huayu Automobile acquired the control of Yanfeng Visteon Automotive Trim System Co., Ltd. and began to enter the field of automotive interior and exterior trim products; in 2016, Huizhong Automobile was included in the pocket and entered the functional assembly market; in 2019, it acquired 30% of the equity of Industrial Transportation and increased the electronic and electrical appliance business.
Through years of external "buying, buying and buying" and expanding its own product line, Huayu Automobile has now become a comprehensive auto parts company, covering almost all fields of auto parts. Huayu Automobile's current business can be divided into five categories: interior and exterior trim parts, metal forming and molds, functional parts, electronic and electrical devices, hot working parts, involving a large number of parts and components products, the products disclosed in the annual report alone reached about 30.
It is worth noting that interior and exterior trim, including dashboards, door panels, seats and bumpers, are the largest source of revenue for Huayu Automobile, and the proportion of revenue in this business has remained above 65% in the past few years.
Automotive interior and exterior trim is a stock market with low technical content, many competitors, and the gross profit margin is not high, but this business is the main business of Huayu Automobile.
Since 2018, due to weak market demand and fierce competition, the revenue growth rate of Huayu Automotive's interior and exterior trim sector has entered a negative growth stage from slow positive growth, with a decline of 8.6% and 5.6% in 2019 and 2020, respectively, dragging down the growth of the company's overall revenue, resulting in negative growth in the company's overall revenue in the past two years.
Looking at it for a long time, the overall revenue growth rate of Huayu Automobile is obviously no bright spot compared with its peers. As shown in the chart below, since 2016, the revenue growth rate of Huayu Automobile has not been as fast as that of Tuopu Group, Xusheng Shares and 600933.SH.
All along, HUAYU Automobile has been supplying various auto parts products to the Shanghai Automobile System, and there are many product lines, compared with competitors such as Tuopu Group, it lacks tempering in the outside market, resulting in huayu automobile lacking competitive fist products. In the company's product structure, the relative advantages are interior and exterior trim and chassis structural parts products, but these two areas have not been able to stand in the "C position" in the market. Although HUAYU Automobile has achieved the forefront of the industry in the interior and exterior trim market, the incremental space of the interior and exterior trim market is limited, far from the rapid growth of the intelligent cockpit, electric drive system, body lightweight and other markets.
Taking Huayu Automobile's lamp products with a large market share as an example, from 2017 to 2020, the sales growth rate of the product was 13.04%, 6.25%, -10.25% and -8.48%, respectively, failing to achieve counter-trend growth in the market.
Some enterprises such as Tuopu Group and Xusheng Co., Ltd. are more focused on advantageous products, and have made great achievements in advantageous products. For example, in the field of shock absorbers and chassis systems, Tuopu Group has strong competitiveness and its market share remains at the forefront of the country; Xusheng co., Ltd. has a solid market position in the field of aluminum alloy die castings, and has abundant orders in the lightweight market of new energy vehicles.
Increase the weight and light weight, and "rely on" the new energy vehicle market
Comprehensive enterprises do not mean that they can "call the wind and rain" in the market, and any company needs to have hard products to get their hands on in order to seize their own territory in the fierce battle for the market.
Obviously, Huayu Automobile urgently needs to optimize its business structure and create products that can drive the company's growth in the segments with high market prosperity.
Of course, HUAYU Motors has also realized this in recent years. In 2019, Huayu Automobile sold a 50% stake in Shanghai Trw Automotive Safety System Co., Ltd., which produces products including seat belts, airbags and airbags; in 2020, Huayu Automobile sold a 45% stake in Lear Industrial Transportation, which is engaged in wiring harnesses, switches, electronic control systems and other businesses.
In terms of transformation, Huayu Automobile mentioned that it should "gather the core and upgrade the energy level", and proposed to target three major areas such as intelligent cockpit, electric drive system and intelligent driving system. In the first half of this year, Huayu Automobile acquired a 49.99% stake in Yanfeng Antaotuo Seat Co., Ltd., realized autonomous control of the car seat business, and ventured into intelligent cockpit controllers and other components, and developed 4D imaging millimeter wave radars to enter the field of intelligent driving.
It is not difficult to see that Huayu Automobile began to adjust the direction to the new energy vehicle market, on the one hand, this is a market with considerable increments, on the other hand, the product threshold for this market is high, and there is a certain product added value.
Lightweight products have become an important direction for Huayu Automobile to close the market with new energy vehicles. In the 2019 annual report, the company mentioned that in order to cope with the decline in the domestic automobile market, it is necessary to exert efforts according to the three professional sections of intelligent networking, electrification and lightweight.
In the field of lightweight products, HUAYU Automobile has carried out three major layouts in the form of shareholding or holding enterprises: Huayu Pierburg is responsible for the powertrain field, Secoli is responsible for the body assembly field, and Yapu Automobile is responsible for the automotive fuel system.
The products of the three companies are mainly engaged in the production and sales of automotive lightweight products or other related services, including cylinder blocks, shock absorber brackets, aluminum alloy battery trays, body structural parts, etc.
After having the research and development and production capacity of lightweight products, Huayu Automobile began to look for some new energy vehicle manufacturers at home and abroad to get rid of its excessive dependence on traditional products such as interior and exterior trim. Judging from the recent customer structure, HUAYU Automobile has begun to open up space in the new energy vehicle market.
In addition to the original SAIC, Mercedes-Benz, BMW, BYD and other customers, Huayu Automobile's aluminum battery box, body structural parts, steering machine and other lightweight products to Tesla, Weilai Automobile, Xiaopeng Automobile and other new car-making forces to supply. Among them, in 2019, Huayu Auto subsidiaries Shanghai Secoli, Yanfeng Antaotuo and Yanfeng Biotech successfully squeezed into Tesla's "circle of friends" and became another "Tesla concept stock" in the A-share market.
Judging from the operating data disclosed by Huayu Automobile, the overall growth of its related lightweight products for new energy vehicles is eye-catching. Taking the battery tray as an example, from 2018 to 2020, the supply of the product to new energy vehicles was 16,300 pieces, 22,800 pieces and 35,000 pieces, respectively, with a compound annual growth rate of 46.5%.
After expanding the new energy vehicle market, the risk factors of HUAYU Automobile's dependence on SAIC have gradually decreased. According to the company's announcement, in the first half of 2021, the proportion of Huayu Automobile's main business revenue from customers outside SAIC Increased to 48%, compared with 38.5% in 2015. According to the company's announcement and investor Q&A, in the first half of 2020, 2020 and the first half of 2021, Huayu Automobile's revenue from Tesla accounted for 1.3%, 1.9% and 4.1% respectively, with rapid growth, and Tesla began to become the highest proportion of sales customers outside saic motors in the first half of this year.
In summary, HUAYU Automobile is very determined to open up the new energy vehicle market, and has also achieved some results. However, revenue from the new energy vehicle market is still difficult to change the momentum of the company's insufficient growth momentum, and it may take time for the company to reverse the decline in growth.
Author: Distant