Since the electric vehicle concept stock represented by the Ningde era (300750.SZ) has entered the adjustment period, the market for new energy vehicles has gradually changed from electrification to intelligence, which is clearly reflected in the disk.
If you take the Oriental Wealth data as an example, since November 2021, the lithium battery index of A shares representing the electrification direction of new energy vehicles has risen first and then fallen, with a total increase of only 0.2% so far, and the pullback momentum is clearly visible. In contrast, the auto parts index, which represents the intelligent direction of new energy vehicles, rose by more than 20% in the same period.
Under the sharp rise in the index, the performance of auto parts standards such as Zhongding Co., Ltd. (000887.SZ), Changshu Auto Accessories (603035.SH), Baolong Technology (603197.SH), and Xinrui Technology (300745.SZ) was eye-catching. Among them, The main on-board charger, vehicle DC/DC converter and vehicle power supply integration products of Xinrui Technology has soared by nearly 150% in just one month.
The surge in Xinrui Technology has allowed investors to focus on Shanghai Fengtian Electronics Co., Ltd. (hereinafter referred to as "Fengtian Electronics"), which is similar to the business of Xinrui Technology and will be listed on the Science and Technology Innovation Board.
Zhitong Finance APP learned that Fengtian Electronics, whose main business is automotive power supply products and automotive thermal management system products, has been inquired by the Shanghai Stock Exchange on July 27, 2021. The company plans to raise 450 million yuan in the IPO, and Everbright Securities is its sponsor.
According to the prospectus, from 2018 to 2020, the revenue of Fengtian Electronics was 311 million, 377 million and 504 million yuan respectively, and the net profit after deduction of non-attributable to the mother in the same period was 10.4225 million, 21.6631 million and 65.3374 million yuan, respectively. Revenue and non-net profit have grown steadily and rapidly.
With its beautiful performance and the market outlet of new energy vehicle intelligence, can Fengtian Electronics replicate the eye-catching stock price performance of Xinrui Technology?
The previous installation model cuts into many well-known car manufacturers
Since its inception in 2002, Fengtian Electronics, which started with automatic air conditioning control products as its business, after more than ten years of continuous research and development and innovation, the company has built two major business lines of vehicle power supply and automotive thermal management products around the safety, stability, high efficiency and energy saving of on-board electrical appliances, and has become one of the mainstream suppliers of related products in these two fields in China.
According to the prospectus, Fengtian Electronics has formed a variety of products in terms of vehicle power supply, including vehicle inverters, vehicle DC-DC converters, vehicle USB, vehicle chargers, etc. that can be used for commercial vehicles and passenger cars. The automotive thermal management business includes two major products: high-pressure water heaters and air conditioning controllers. It is worth noting that in addition to the on-board DC-DC voltage regulator that is only suitable for traditional cars, the rest of Fengtian Electronics' products can be used for new energy vehicles.
From the perspective of sales channels, automotive electronic components have two modes of front and rear loading, front loading is direct sales, the company directly sells products to automobile manufacturers, and then the packaging is biased towards distribution, selling products to channel providers in the industrial chain. As a tier 1 supplier of domestic mainstream automakers, Fengtian Electronics has a large number of products used in the models of domestic mainstream car companies, and the company carries out business according to the front-loading model, and the sales model is direct sales.
It is worth noting that compared with the rear installation mode, the front installation mode has a strong barrier. From customer demand mining, to technical solution design, prototype trial production, contract signing, small batch supply, large batch delivery time span is long, especially the batch matching time for new products to enter new models, generally takes 18-36 months.
According to the prospectus, with strong R & D strength, continuous innovation ability and comprehensive supporting development capabilities, the company has established long-term and stable business cooperation with many well-known automakers, and the company's products have also been recognized by mainstream customers in the industry. Its products have been applied in nine of the top ten groups in China's brand car sales in 2020.
Specifically, in the field of commercial vehicles, Fengtian Electronics has become a first-class supplier to domestic commercial vehicle OEMs such as FAW Jiefang, China National Heavy Duty Truck, Shaanxi National Heavy Duty Truck, Dongfeng Commercial Vehicle, Dayun Group, SAIC Hongyan, Valin Group, and Jianghuai Group.
In the field of passenger cars, Fengtian Electronics has become a first-class supplier to domestic and foreign passenger car OEMs such as French Peugeot Citroen, American General Motors, German Volkswagen, Porsche, FAW Group, SAIC Group, SAIC Volkswagen, Great Wall Group, Dongfeng Group, Dongfeng Nissan, BAIC Group, GAC Group, GAC Honda, Changan Group, Geely Group and so on.
After entering many well-known manufacturers, Fengtian Electronics' vehicle inverter products have been at a leading level in the domestic market; And the company's 48V vehicle DC-DC converter products and high-voltage water heating products the main competitors are internationally renowned auto parts enterprises, especially high-pressure water heating products to break the international peer patent barriers, with strong international competitiveness.
The "volume and price rise" of the vehicle inverter has led to rapid growth in performance
The trend of rapid development of Fengtian Electronics business is reflected in the performance. According to the prospectus, from 2018 to 2020, Fengtian Electronics' revenue increased from 311 million to 504 million, with a compound annual growth rate of 27.28%; In the same period, the net profit after deduction of non-attributable to the mother increased from 10.4225 million yuan to 65.3374 million yuan, with an annual compound growth rate of 150%.
By splitting the company's income statement, the secret behind it can be developed. From the perspective of product type, vehicle power supply products are the core of Fengtian Electronics, in 2020, the revenue of vehicle power supply products accounted for 90.62%, and the revenue of thermal management products accounted for 9.28%.
In detail, the vehicle inverter, vehicle DC-DC converter and vehicle USB in the vehicle power supply products have grown steadily, and the compound growth rate of the three types of products from 2018 to 2020 is 44.57%, 13.58% and 17.9% respectively; Obviously, the on-board inverter is the core pulling force for the company's revenue growth.
Behind the rapid growth of vehicle inverter revenue, it is mainly because of the company's product volume after entering major heavy-duty truck customers, as well as the high-end vehicle inverters supporting heavy-duty trucks, which are typical of "volume and price rise".
The growth of automotive DC-DC converters was mainly due to the increase in product sales at the Great Wall Group, the mass production of the FAW Group's new automotive DC-DC converter project, and the addition of an in-vehicle 48V-DC-DC converter business to the Dongfeng Group. The increase in in-vehicle USB revenue was due to higher revenue from SAIC Volkswagen and Potevili, as well as the start of mass production of the company's newly developed Great Wall Group and FAW Group. In addition, in 2020, Fengtian Electronics developed a vehicle charger product for supporting new energy vehicles, and realized the supply of sample parts to electric coffee cars.
It is not difficult to see that after the on-board inverter, on-board DC-DC converter, and car USB gradually entered the customer and began to increase the volume, Fengtian Electronics has begun to cultivate the new product of the car charger on the car power supply business line, laying the foundation for the construction of new growth points in the future.
Revenue from thermal management products is significantly volatile. From the perspective of splitting, the increase in revenue of high-pressure water heaters in 2019 is mainly due to sales growth, and the decline in revenue in 2020 is mainly due to the sales of new energy vehicles of traditional vehicle customers such as Dongfeng Group and BAIC Group being impacted by new car-making forces such as Tesla and Wei Xiaoli, resulting in sales falling short of expectations.
In terms of air conditioning controllers, although the sales volume of the product continued to grow, the revenue recorded three consecutive years of decline, mainly because of the decline in the value of air conditioning controller products. In the early stage of the air conditioning controller product, including the panel; However, with the development of automotive electronics and integration, air conditioning panels are generally integrated into the central control screen of the whole vehicle, and the company's air conditioning controller sales model has changed from a core electronic control system with panels to a core control system without panels. The cost of air conditioning panels generally accounts for about 20% to 40%, accounting for a relatively large proportion, so after excluding panels, the average selling price of the product has dropped significantly.
From the perspective of the overall gross profit margin, the gross profit margin of Fengtian Electronics from 2018 to 2020 was 21.28%, 22.88% and 29.92%, showing a steady increase year by year, which is mainly due to the increase in volume and price of the vehicle inverter and the reduction in the cost after the large-scale mass production of the vehicle DC-DC converter. It is worth noting that in 2020, the gross profit margin of high-pressure water heater products is only 1.71%.
Thanks to the improvement of gross profit margin, the superimposed scale effect and the continuous decline in operating costs under the improvement of the company's operating efficiency (operating expenses accounted for 18%, 16.56% and 13.73% from 2018 to 2020), Fengtian Electronics' net profit margin of deduction of non-attributable to the mother from 2018 to 2020 was 3.22%, 5.75% and 12.96%, respectively, with a clear growth trend, which led to the growth rate of the company's non-attributable net profit in the same period of more than 150%.
Changes in heavy-duty truck sales will have a significant impact on performance
From the perspective of the industry, because the products can be used in the field of new energy vehicles, the track where Fengtian Electronics is located is in a high boom cycle. The data shows that in recent years, the global sales of new energy vehicles have continued to grow at a high rate, with global sales of new energy passenger cars increasing from 549,000 in 2015 to 3.125 million in 2020, with a compound annual growth rate of 41.6%. During the same period, the sales volume of new energy vehicles in China increased from 331,000 units to 1.367 million units, with a compound annual growth rate of 32.8%. Although the proportion of new energy vehicles in China has risen to 20%, there is still broad room for growth in the long run.
From the product point of view, under the trend wave of new energy vehicles, the intelligent, low-power, modular, lightweight, high-power, and high-safety of on-board power products will become a new trend, and the evolution of products will drive the increase in value, and the introduction of new energy vehicles will bring about the release of products, showing a relatively large probability of "volume and price rise".
As far as Fengtian Electronics is concerned, in the past three years, the rapid growth of the company's performance is mainly due to the high-power vehicle inverter supported by heavy-duty truck customers, high-power brings about an increase in product value, and heavy-duty trucks usher in a new round of boom cycle during the economic downturn to drive the increase in product sales, so the sales of heavy-duty trucks will have a significant impact on the performance growth of Fengtian Electronics.
According to the data, in December 2021, the overall sales volume of China's heavy-duty truck market is expected to be 53,000 units, down 52% year-on-year, and the market shows "8 consecutive declines". Full-year 2021 sales are expected to be 1.391 million units, down 14.1% from the same period last year (1.619 million units). Obviously, heavy-duty truck sales in 2021 have declined year-on-year.
According to the data of China National Heavy Duty Truck Group's 2022 cloud business conference, the sales of heavy-duty trucks in 2022 will be about 800,000-900,000 vehicles, including exports will reach 90-1 million vehicles, which will decline again compared with 2021 sales, which means that the performance of Fengtian Electronics' 2021 and 2022 on-board power supply products will be inferior to that of 2020, which is worth focusing on tracking. And the air conditioning controller due to the transformation of the product or difficult to have a bright performance.
Then the new growth point of Fengtian Electronics' future performance mainly depends on the following aspects, one of which is that the on-board power supply products are expanded from commercial vehicles to the passenger car market, and whether it can break into the industrial chain of new car manufacturing forces determines the growth of its business; Second, whether the company's cultivated vehicle charger products can accelerate the volume; Third, the company's high-pressure water heating products have broken foreign patents, competitive barriers have been improved, and whether they can accelerate the volume under the general trend of localization substitution.