Lead
Car seat is a seat when riding, is the necessary configuration of automotive interior and one of the important products of automotive passive safety, the quality of the seat will directly affect the safety of passengers and the riding experience.
Source: Changjiang Securities, Gordon, Chen Sizhu
1 Introduction: Why is the car seat industry optimistic at the current point in time?
Starting from the framework of parts investment, the value of bicycles and the market pattern are the core elements that determine the value of investment. In the context of the wave of electric intelligence in automobiles, we believe that car seats meet these two standards. From the perspective of the value of auto parts, the value of auto seat bicycles is 3000-4000 yuan, which is high in the value of parts and components, and from traditional fuel vehicles to new energy vehicles, seats have new functions and increase value. From the perspective of the pattern, in the past, the seat industry was highly concentrated and mainly foreign capital, and under the wave of new energy, the new forces of car manufacturing (including domestic and foreign, corresponding to traditional car companies) are a new opportunity to reshuffle the industry supply chain system, and domestic seat suppliers have been precipitating for many years, facing the opportunity to break the situation, and the replacement space is vast.
2 Space: High value brings hundreds of billions of tracks
Car seats involve safety, and the value of bicycles is higher
Car seat is a seat when riding, is the necessary configuration of automotive interior and one of the important products of automotive passive safety, the quality of the seat will directly affect the safety of passengers and the riding experience. At present, car seats can be mainly divided into seat frames, seat motors, angle adjusters, slide rails, sponge foam bodies, masks, etc. Different models will have different numbers of configuration requirements, and the seats need to be customized and developed for different models. For example, cars and SUVs are equipped with 1 pair of main seat skeleton, passenger seat skeleton and rear seat skeleton and 2 pairs of seat rails each for each car; MPV or crossover passenger cars are equipped with 1 pair of main seat skeleton, passenger seat skeleton, rear seat skeleton, and 2 pairs of seat rails for the middle seat skeleton per car.
The value of seat bicycles is relatively high and continues to increase, and the domestic market size will be about 77.3 billion yuan in 2020. According to data from the Head Leopard Research Institute, as of 2020, China's automotive seat market size is 77.3 billion yuan, and the CAGR from 2014 to 2020 is about 4.69%. As the car begins the transformation of the "new four modernizations", the interaction between people and vehicles seeks new breakthroughs, and the car seat combines electrification and intelligence, constantly adds new functions, and the value of bicycles continues to increase. Before 2018, the value of seat bicycles was stable at about 2500 yuan, and after 2018, the value of seat bicycles increased rapidly to more than 3000 yuan, an increase of about 23.15% in 2018-2020.
When the car seat upgrade is carried out, the functional configuration is constantly enriched
In the future, car seats will accelerate lightweight and electric intelligence, continue to improve safety and comfort, and the value of seat bicycles will continue to increase. 1) In terms of lightweight, the weight of the seat accounts for 6% of the weight of the vehicle, and the lightweight is an effective measure to achieve energy saving and emission reduction of the car, which can be achieved through the lightweight of the seat frame and the lightweight of the whole chair. Around 2015, each faucet has begun to lay out lightweight layouts, such as Andorto's "Comfort Shell" seat technology, Lear EPP foam replaces some of the cushion metal skeletons, improving comfort while achieving significant weight reduction, and the third generation Super Mini corner adjuster, EVO and EVO rail can achieve a 50% weight reduction. At present, the lightweight seat is mainly achieved through new materials and new processes, and the lightweight materials are mainly made of high-strength steel, magnesium aluminum alloy and carbon fiber, and the lightweight process mainly includes thermoforming, roller pressing, laser welding, etc.
2) In terms of intelligence, with the transformation of the car to the new four modernizations of "electric, intelligent, networked, and shared", the intelligent cockpit has become the core carrier of the shaping of the automobile space, and the car seat plays an important role. At present, there are three main aspects of seat intelligence: multi-scenario applications (such as Magna's reconfigurable seat, users can reconstruct the seat through the smartphone application, the reconfigurable mode includes vehicle sharing, long-distance travel and autonomous sharing of movement), intelligent control (so that the seat control method from the traditional button control method to intelligent control mode, such as APP, gesture control, intention perception, etc.), intelligent monitoring (such as HiRain Technologies). of intelligent car seating systems intelligently monitor health, heart rate and breathing frequency as well as temperature).
3) In terms of safety, according to the results of the 2021 IHS Markit survey, users are most concerned about safety factors when buying a car, and seat safety devices can provide greater safety protection for people in the car when the vehicle is running normally or colliding, such as active headrests, seat belt early warning devices, anti-drowsy vibration motors, side airbags, etc. According to the statistics of autohome data, 63.8% of the car series are currently equipped with front side airbags, and 10.2% of the car series are equipped with rear side airbags. Toyota Boshoku launched a drowsiness suppression seat system in 2020 that measures drowsiness through a person's facial expressions and controls drowsiness through music and vibration without disturbing the driver.
4) In terms of comfort, the comfort of car seats will directly affect the driving experience of consumers, with consumers paying attention to the functional configuration of the seat, more and more car series have begun to add functions such as seat electric adjustment, seat heating, seat ventilation, seat massage and so on. According to auto home statistics, at present, 60.5% of the car series is equipped with the front seat electric adjustment function, 54.4% of the car series is equipped with the front seat heating function, 29.5% of the car series is equipped with the front seat ventilation function, and 11.3% of the car series is equipped with the front seat massage function.
Two trends can be clearly seen from the seat function penetration rate: 1) the penetration rate of the car model is lower than the penetration rate of the car system, that is, the new car launched by a car series will add the configuration seat function, and the seat function penetration rate is improving; 2) the seat function in the past The front seat function penetration rate is higher than that of the rear seat function, that is, the seat function is prioritized by the front row, and the rear seat is gradually configured to the rear seat.
Hypothesis: 1) Suppose that there are two influencing factors for the change in the value of seat cycling. First, the increase in the value of bicycles brought about by the increase in seat function configurations, and the second is the use of new materials/processes to achieve seat lightweighting, resulting in an increase in the value of bicycles.
2) It is assumed that the penetration rate of various seat functions will accelerate in the future. According to the sales data of Zos Automobile Research Institute and the Association of Passenger Transporters, as of 2020, the memory penetration rate of electric seats is about 10.9%, and the heating penetration rate of front and rear seats is close to 24.6%. Referring to other vehicle configuration upgrades, it is expected that the penetration rate growth rate will accelerate in the next few years, and the penetration rate of power seat memory is expected to be about 48% in 2025, and the penetration rate of front and rear seat heating is about 64%. At the same time, according to the information of the car home, it is assumed that the value of the electric seat memory bicycle is stable at 200 yuan, the heating and ventilation function of the front and rear seats is 250 yuan, and the front and rear seats are massaged for 100 yuan.
3) In terms of lightweight, with reference to the "Energy-saving and New Energy Vehicle Technology Roadmap" of the Society of Automotive Engineers of China, the use of various lightweight materials in the seat is assumed in 2025, and it is expected that the value of seat bicycles will increase by 28% due to lightweight in 2025.
4) In terms of total volume, considering that there is a certain replenishment of passenger cars in 2021Q4, it is expected that the channel inventory will still be reduced by about 600,000 vehicles in 2021, and the oem will have a strong replenishment power under the improvement of supply in 2022, and the global layout of the whole vehicle continues to advance, and overseas sales are still expected to achieve good growth.
Overall, wholesale sales growth in 2022 is expected to be 8%-9%, about 23.295 million units, and then at 3% per year, it will be about 25.44 million units by 2025. According to the above assumptions, China's passenger car seat market size is 61.7 billion yuan in 2020, and it is expected that the value of seat bicycles will rise to 4148 yuan in 2025, the market size will reach 105.5 billion yuan, and the CAGR will be about 11.3% in 2020-2025.
3 Pattern: The three major barriers form a high degree of concentration
The international leader oligopoly, investment and mergers and acquisitions to maintain a dominant position
The global seat industry has been occupied by overseas manufacturers with most of the market share, including the domestic market. 1) Overall, the car seat industry is a highly concentrated oligopoly market, with Andorto, Lear, Toyota Boshoku and Faurecia accounting for most of the global market share, with a CR4 of 68%. 2) In China, the market share of the automotive seat industry is mainly occupied by Andorto and Lear manufacturers, with CR4 being 65%.
International seat leader: The main customers are brands with annual sales of more than one million vehicles in the world, and the source of revenue is high quality. Although the main customers of each seat dragon head are different, they are all passenger car brands with annual sales of more than one million units in the world, and the long-term relationship is relatively stable. As of 2020, Andotto's main customers are Fiat Chrysler Automobiles and Volkswagen Group accounting for 10% of the consolidated net sales; Lear's main customers are GM, Ford, Stellantis, Volkswagen, Daimler Combined net sales of 19%, 13%, 11%, 12%, and 12%, respectively, and there are more high-end brand customers; Toyota Boshoku's core customers are Toyota Group, with a seat matching ratio of about 70% for Toyota, and about 90% considering the subsidiary COWERK. Toyota Motor Motor and Toyota Motor Body accounted for 30.1% and 11.9% of Toyota Boshoku's revenue, respectively.
In terms of domestic supporting relationships, Yanfeng International Seat is a joint venture between Yanfeng and Antaotuo established in 1997, mainly for customers who are SAIC + independent brands. In March 2021, Yanfeng announced that it would acquire 49.99% of Antaotuo's equity in Yanfeng International Seat, and from the perspective of the nature of equity, the situation of China's seat industry being monopolized by foreign capital has changed. Lear is a joint venture brand based on American and Ashkenazi. Magna's main customer is Geely. (Source: Future Think Tank)
The three major barriers form an oligopoly pattern
Barrier 1: Cost barriers
Cost control capabilities are the core competitiveness of seat suppliers. On the one hand, it can enhance the competitiveness of products, on the other hand, the production and manufacture of automobiles is at the bottom of the smile curve of the automobile industry, and the profit margin is low, which can improve profitability. The cost of car seats can be summarized into seven categories: start-up costs, logistics costs, investment costs, material costs, labor costs, daily management costs, and recycling scrap costs. The main costs of car seats are investment costs, material costs and labor costs.
Cost competition means: 1) Car seat platform/modular development is the core means of cost control. The impact of production on the cost of car seats is the most obvious. Overall, the gross profit margin level of the international leader is similar to the global automobile production trend, such as in 2009-2017, the global automobile production compound growth rate of 2.7%, the leading gross profit margin Antaoto gross profit margin maintained between 8% and 10%, the highest reached 9.6%, and in 2017-2020, the global automobile production compound growth rate was -7.3%, and the gross profit margin of Andoto fell to about 5%, and the gross profit margin of other leading enterprises was the same.
The supply of multiple models on one platform is equivalent to expanding production, which helps car seat suppliers to share development costs equally among multiple OEMs, significantly reducing product costs, and at the same time providing OEM models with inexpensive products to improve their competitiveness.
Reasons: 1) Not only because the output determines the choice of design schemes and the production method of the product, but also because in the current auto parts industry, in addition to a small number of OEM manufacturers pay the design and development costs and mold costs separately, most of the OEM manufacturers choose the design and development costs and mold costs according to the output. 2) Similar to fixed costs, when the output is larger, the smaller the design development and mold costs shared by each seat, the greater the profit margin of the manufacturer. 3) Since the chair has the characteristics of customized production, the learning curve is obvious in each order cycle of the supplier.
2) The vertical development of the industrial chain and the reduction of labor costs are also effective means of controlling costs. The vertical development of the industrial chain can save procurement costs, such as seat motors and seat drives accounting for 30% of manufacturing costs; the transfer of production capacity to countries with low labor costs can reduce the cost of human resources in the manufacturing process. For example, Lear insisted on vertical integration of the industry, developed the seat cover business, and expanded 65 factories in low-labor cost countries in 2009-2015, resulting in its 2014-2016 gross profit margin advantage.
International chair leader: focus on cost competitive advantage, increase product competitiveness and improve profitability, in recent years, the gross profit margin level has been differentiated. 1) The cost control strategies of each leader are slightly different, but they all carry out global resource reallocation, provide supporting facilities on a global scale, improve the level of economies of scale and the scale benefits brought by them, and significantly reduce costs. In the past, in addition to the gross profit margin of Magna better than 10%, the gross profit margin of several other seat faucets has remained between 8% and 10%, with a slight increase, and the gross profit margin level of each seat faucet has been differentiated in recent years.
2) After the separation from Johnson, Andotto adopted a CPP strategy to reuse parts and designs to ensure product quality and reduce costs while shortening product development time, reducing the average development time of the seat program by approximately 35%. 3) Lear pays attention to the cost of manual production and manufacturing, and factories are gradually shifting to countries with low labor costs, with a total of 80 factories in low labor cost countries in 2009, which increased to 145 in 2015 and 171 in 2020, and the gross profit margin has improved in recent years. 4) Toyota Boshoku since 2010 has taken cost reduction and efficiency increase as one of its business strategies, through the opening of factories in low-cost countries and strict control of sales management expenses, in recent years, the sales management expense rate has continued to decline, and the gross profit margin level has improved significantly.
Barrier two: response speed
The automotive seat industry needs to build factories near the automakers and expand their production capacity accordingly to improve their response speed and product competitiveness. 1) Stamping parts, lightweight, chassis structural parts and other large quality and volume of auto parts, long-distance transportation is not economical. On the one hand, parts suppliers with perfect production capacity layout can reduce transportation costs and product losses, and on the other hand, they can better meet the requirements of vehicle manufacturers for logistics and synchronous research and development, which will help the company expand market share and enhance profitability.
2) The characteristics of car seats are large production batches, high degree of standardization, and strict quality requirements, which requires the manufacturing equipment of auto parts manufacturers to have high processing accuracy and quality stability, and can adapt to a fast, continuous, and full-load production environment. Mass production puts forward requirements for the production scale of seat enterprises, if the enterprise can not complete all orders on time, the production of downstream vehicle manufacturers will be affected. Therefore, production capacity is an important indicator to measure the competitiveness of enterprises in the industry, such as when the company's capacity utilization rate reaches more than 75%, customers may require the company to expand production capacity to ensure timely supply capacity.
International Chair Leader: Establish a sub/joint venture company in the world to seize the first-mover advantage and rapidly expand overseas market share. On the one hand, due to the low labor costs in emerging markets, the transfer of production capacity helps to reduce their own production costs; on the other hand, the emerging market is developing fast, but the strength of local suppliers is weak, and the international chair leader has obvious technical advantages in the development of emerging markets. Therefore, in addition to the acquisition of excellent seat suppliers in mature markets, the overseas layout of each seat leader has entered the emerging automobile market very early. Investing in local construction or joint ventures with local companies has resulted in a high global market share.
Barrier three: technical barriers
It is mainly reflected in two aspects: design and manufacturing. 1) Car seats need to be customized for production, involving driving safety, long development and production cycle, and testing the research and development capabilities of seat suppliers. There are many manufacturers and brands in the automobile market, there are many types of cars, different specifications, different types of cars require different seats, and the parts required for different seats are different in terms of specifications and performance sizes. Such characteristics lead to car seat suppliers to design different parts according to different models, and the mold and production process of each component are also different, which causes a seat part to generally correspond to a model or a brand, and will not be applied to other brands. In the development cycle of automotive skeleton seats and key components, mold design and manufacturing account for about 2/3 of the development cycle time, which is an important factor restricting the renewal of automotive seat skeleton products.
Therefore, in the main plan of the development of a new model, the seat is developed simultaneously with it, and even needs to be carried out in advance, because the development cycle of the seat is long, generally 24 to 36 months, involving more work content. Throughout the design and development of the chair, there will be several rounds of review on the shape, of which the main points of review are data and sample reviews. After reviewing the comments, it needs to be revised and then reviewed. After solving all the engineering problems, we finally get a mature and satisfactory product.
2) After the car seat design is completed, it is also necessary to debug the production line to meet the requirements of mass production. Automotive seat manufacturers need to pass the environmental management system certification, ISO/TS16949 certification, 3C certification and other quality management system certification, etc., of which ISO/TS16949 certification generally requires 10-12 months of preparation time for new entrants. In addition to basic materials such as metal and plastic, seat suppliers generally purchase raw materials such as metal and plastic, and may also purchase parts such as seat slides, motors, drives, and angle adjusters.
The production of automotive seats can be mainly divided into the production of seat frames, foam foaming, mask production and seat assembly and other industrial processes. One of the key is the production and foaming of the seat frame: the seat frame is often made of rolled profiles or welded with steel plates, and is directly fixed with screws or fixed to the body by the seat adjustment mechanism, and the production process mainly includes stamping, welding and painting. The stamping process mainly completes the preparation of raw materials for plates and pipes, as well as the forming of plates. The welding process mainly completes the welding of the driver's seat, co-pilot seat, rear seat, and backrest skeleton. The painting process completes the painting of the surface of the seat skeleton. Seat foaming can absorb the energy of members colliding with them in accidents, achieving a good role in protecting the occupants. The foaming process is: mold opening and release coating release agent parts Assembly raw materials are injected into the closed mold to add hardened mold opening.
The lightweight and intelligent transformation of automotive seats puts forward higher requirements for the production technology of seat suppliers. 1) Mainland automobile production mainly uses automatic and semi-automatic stamping production lines, and a small number of flexible stamping automatic lines are used, and there is a certain gap in production efficiency compared with foreign countries. 2) The new lightweight materials have higher requirements for stamping technology, such as ultra-high-strength steel in the traditional cold stamping manufacturing process is prone to cracking, resilience and other phenomena, advanced hot stamping technology has become its best choice. However, although in the operation of automotive metal stamping parts, domestic equipment is more used and occupies a dominant position, from the perspective of technical level, there is still a certain gap between continental stamping equipment, including thermoforming manufacturing process, and the international advanced level. 3) A new round of scientific and technological revolution is driving the automotive industry to accelerate change, and the energy, interconnection, and intelligent revolutions have injected strong new momentum into the innovation and development of the automotive industry. In the future, automotive seat suppliers will not simply produce seats independently, and cross-border integration of technology will become the main tone of innovation and development.
International chair leader: the industrial chain is complete, the intelligent technology is leading, and the investment in research and development is stable. 1) The annual R&D investment of Antaoto and Toyota Boshoku is stable at about 3%. Among them, Andotto has 10 R&D centers around the world, and its know-how extends to almost every area of automotive seating solutions, including complete seat systems, frames, mechanisms, foams, headrests, armrests, decorative covers and fabrics; Toyota Boshoku has 9 R&D centers around the world, in addition to R&D innovation, the company pays more attention to controlling production costs through technological innovation, thereby improving the competitiveness and profitability of existing products, such as the creation of a new seat production frame in 2015. Reduce process steps in seat manufacturing.
2) Lear and Magna's R&D investment is relatively small. Among them, Lear is leading in seat structure and foam materials, and has achieved a leading position in surface material technology through mergers and acquisitions. 3) Faurecia as the world's sixth largest auto parts supplier, the product range covers a very wide range, so the annual R & D investment accounts for about 5%, and in recent years, due to the focus on the field of intelligent cockpits, R & D investment in operating income proportion continues to increase, in 2020 R & D investment revenue accounted for 8.1%, with 39 R & D centers in the world. It is technologically advanced in the core of the skeleton.
4 Opportunities: Industry changes, the rise of independent suppliers
At a time of industry change, the supply chain is expected to reshuffle
Smart electric vehicles reshape the downstream sales pattern and change the pattern of components from the source. The centennial development of automobiles has also created a factional attribute of relatively solidified parts, such as Bosch Continent, which is mainly oriented to the German system, Denso Koito for the Japanese system, and Magna Visteon, which is oriented to the United States. In the past, downstream sales were relatively stable, and the pattern of parts and components was relatively stable, and the process of domestic substitution was relatively slow. The outbreak of intelligent electric vehicles has brought about the influx of enterprises such as Tesla and emerging car-making forces, and the downstream pattern has undergone qualitative changes.
In the era of intelligent electric vehicles, shortening the replacement cycle and launching models faster is the new competitiveness of car companies, which also puts forward higher requirements for the response speed of parts services. With the intensification of competition in the industry, model iteration is an important way for car companies to maintain competitiveness and thus ensure stable sales. Taking the independent brand Great Wall Motor as an example, before 2017, the iteration speed of Great Wall Motors models was similar to that of the joint venture brand, the star model Haval H6 was launched in 2011, officially replaced in 2017, the replacement cycle was up to 6 years, during which Volkswagen Langyi, Nissan Xuanyi, etc. also had a replacement cycle of about 6 years; since 2017, the company's replacement cycle has been significantly shortened to 3-4 years, of which Haval H6 has been replaced in 2017, and it has been replaced again in 2020 after three years, and haval F7 has been listed for the first time in 2018. It will also be replaced in the second half of 2021. The acceleration of the iteration speed of car companies' models also means that parts need to be followed up faster, and also puts forward higher requirements for the responsiveness of parts services.
The change of intelligent electric profit model, car companies increase software investment, hardware is more completed by parts suppliers, modular supply should be conducive to reducing car personnel investment, accelerating research and development efficiency and meeting the needs of rapid climbing production. The integration and management of the overall supply chain of traditional car companies is more complicated, and they often have more parts and components business, which is reflected in the large number of procurement personnel. In the era of intelligence, under the trend of software-defined automobiles, car companies are more willing to invest resources in the software field with higher profit margins and more moats, and hand over the parts business to suppliers to complete, while creating a flatter and more efficient supply system, and the modular supply demand in the hardware field is also increasing.
The new car platform and new car manufacturing forces of automakers pay more attention to cost and efficiency, and the supply chain is more open, which will bring more opportunities. For example, since Tesla built a gigafactory in Shanghai, due to the consideration of cost reduction and supply stability, the domestic version of the supply chain has been localized, and the localization rate of parts has increased rapidly from 30% at the end of 2019 to 86% in August 2021. Further, Tesla's brand endorsement and open supply chain strategy will stimulate the further opening up of the domestic automotive supply chain. At the same time, all domestic automakers have released their own new car platforms, and they plan to release more models in the future, and the opportunities for independent suppliers will increase.
The turning point has arrived, and excellent independent suppliers are facing growth opportunities. At present, some suppliers have occupied certain advantages in the three major industry barriers and cultivated better customer relationships.
Compared with the three major barriers, domestic suppliers are expected to break the situation
From the perspective of cost, domestic enterprises have strong competitiveness in terms of cost, establish a platform production mode, vertical development of industrial chains, and low labor costs for domestic suppliers. For example, the average salary of Faurecia is about 200,000, while the average domestic seat supplier is about 100,000 (Jifeng and Tiancheng have distorted their per capita salary after 2018 due to the acquisition of foreign companies, based on the 2017 data).
Overseas leading seat suppliers have deteriorated in recent years. Since the divestiture of Johnson Controls, Andotto has continued to lose money due to its high debts, with losses of $1.55, 16.9, 49 million and $550 million in 2016 and 2018-2020, respectively, and positive gains in 2021 due to the sale of Yanfeng Andorto's equity. Lear's attributable net profit also continued to decline after peaking in 2017, and was particularly affected by the epidemic in 2020. Faurecia's 2020 net profit also lost money for the first time.
The deterioration of the operating situation has led to the decline in international leading investment in recent years. In the past, all international chair leaders have rapidly invested in the construction of factories in emerging markets, transferred production capacity, and capital expenditure has increased year by year. However, due to the slowdown in global automobile sales growth in recent years, coupled with financial pressure, Faurecia and Lear began to cut their own capital expenditure in 2018 and 2019 respectively, and Andotto's capital expenditure after leaving Johnson was also significantly reduced, which gave the self-seat supplier an opportunity.
In terms of technology, domestic autonomy has gradually accumulated rich R & D experience and technical reserves, and has manufacturing capabilities such as lightweighting, so domestic suppliers with technical, cost and capital advantages are expected to break the existing pattern and achieve growth. (Source: Future Think Tank)
5 Investment analysis: high-value large space, domestic substitution is the right time
HUAYU Automobile: The leading development advantage is obvious
Yanfeng International Seat is a joint venture established by Yanfeng and Johnson in 1997, and has now become the leading company in The Market Share of China, and is currently a wholly-owned subsidiary of Huayu Automobile. After years of development, Yanfeng International Seat has an independent and complete automotive seat research and development and manufacturing system and a wide range of vehicle customer groups, covering the whole chair, seat frame, foam, headrest, top decoration and so on. According to the company's announcement, in 2017, Yanfeng International Seats had a domestic market share of 31.7%, ranking first in market share. In 2020, Yanfeng Antaotuo's operating income was RMB28.399 billion and net profit attributable to the parent company was RMB1.836 billion after auditing the consolidated statements.
Yanfeng acquired Yanfeng International Seat, and the parent company Huayu Automobile has rich experience in mergers and acquisitions. 1) In 2021, Yanfeng acquired the remaining 49.99% of the shares of Antaoto and obtained all the interests of the company. After that, Yanfeng International Seat will become a wholly-owned subsidiary of Yanfeng and become a local enterprise. 2) Previously, Huayu Automobile, the parent company of Yanfeng International Seat, has had many acquisitions of its joint ventures, and has rich experience in corporate integration, such as the acquisition of 50% of the shares of Yanfeng Visteon in 2013, the acquisition of 50% of the shares of Shanghai Xiaoshi in 2017, and the acquisition of 30% of the shares of Yanfeng Automotive Interior Systems in 2020.
The company's cost competitive advantage is obvious. On the one hand, the company's production bases are located in low labor cost areas, low human resource costs; on the other hand, Yanfeng International Seat, like Andotto, adopts modular production methods to increase the sharing rate, reduce costs, and improve research and development efficiency.
The company's global layout is better, which can achieve rapid response. The company has more than 90 bases, 4 overseas manufacturing bases and 3 cutting-edge offices around the world.
In terms of technology, Yanfeng International Seat is at the international leading level. 1) Yanfeng acquired Yanfeng International Seat at the same time, acquired the perpetual license right of intellectual property related to automotive seat products worldwide, and the product technology covers the entire automotive seat industry chain. In the future, Yanfeng will have a complete technical center with complete capabilities, including the design, development and manufacture of complete chairs and components. 2) In terms of safety and comfort, we have developed an integrated child seat that can raise the age range of children to 9 months to 12 years old, and a rotating back seat to better serve drivers in the state of automatic driving. 3) Company layout Lightweight and intelligent. In terms of lightweight, semi-solid magnesium alloy is used in seat frames. In terms of intelligence, the XiM 21s Seat for smart cockpits and the IL Seat for first-class and high-end MPVs have been created.
The company maintains a first-mover advantage and has strong customer resources. 1) Yanfeng International Seat entered the Chinese market before Lear, Toyota Boshoku, Faurea and other seat leaders, and the first-mover advantage was obvious, and it occupied the Chinese market first. 2) The company currently has long-term and stable cooperative relations with SAIC motor and domestic independent brands, and has won the excellent supplier award from 7 customers in 2020.
Tiancheng Automatic Control: The successful transformation of the seat faucet of construction machinery
Founded in 1992, Tiancheng Automation has become a leading manufacturer of construction machinery and commercial vehicle seats in China and then entered passenger cars and aviation seats. In the early days of its establishment, it was equipped with seats for construction machinery, and entered the commercial vehicle seat industry in 1993, the aviation seat industry in 2012, and the passenger car seat industry in 2015. The company's revenue grew rapidly, and the profit in 2019 was affected by some customers, resulting in losses due to the impairment of large assets. In 2020, the revenue will be 1.428 billion yuan, of which commercial vehicle revenue accounted for 29.8%, construction machinery revenue accounted for 26.7%, passenger car seat revenue accounted for 26.6%, and aviation seat revenue accounted for 9.2%.
With cost advantages, the company's overall gross profit margin is expected to improve as orders for passenger cars increase. 1) The company has a certain cost competitive advantage, and has established three major seat production platforms for economy, mid-range and high-end. 2) In recent years, due to the impact of the passenger car business, the gross profit margin has declined slightly. Due to the company's late entry into the passenger car seat industry, the initial customer is relatively single, which is greatly affected by the downstream, and lacks scale effect, and the gross profit margin is low. In 2020, the gross profit margin of passenger car seats increased from -10.3% in 2019 to 7.5% due to the increase in the automation rate of core components of passenger car seats and the increase in capacity utilization. It is expected that in the future, as the company expands its customer range and realizes an increase in orders, gross profit margin will continue to improve.
3) The company's seat production line is complete and the self-control rate is high. Introduced and improved a number of production lines at home and abroad, can produce seat frames, foaming, upstream products angle adjusters, slide rails, and downstream face covers and other products.
The company continues to improve the domestic layout, the response speed is fast. 1) The company has 15 production sites worldwide. In terms of passenger cars, it has reached a stable cooperative relationship with SAIC Motor, and has built Nanjing, Zhengzhou and Ningde plants around SAIC Nanjing, Zhengzhou and Fujian Ningde bases, while the Rooftop plant is stablely equipped with Dongfeng and WM Motors. In terms of construction machinery and commercial vehicles, Xuzhou, Liuzhou, Jinan, Shiyan, Hefei, Changchun and the United States have factories that can serve customers nearby. In terms of aviation seats, the British factory and Boeing are making good progress. 2) In 2016, through the non-public issuance of shares, the funds were raised to invest in the construction project of the intelligent production base of passenger car seats, and an annual output of 300,000 sets of passenger car seat production lines was built. 3) Have a professional after-sales service team in the world, 7X24 hours fast response.
The company's technology pays attention to R & D investment, with good technical strength. 1) The company pays attention to R&D investment, and has 3 R&D centers and CNAS nationally recognized laboratories around the world. In addition to the impact of the epidemic in 2020, the proportion of R&D expenses to revenue in recent years has stabilized at about 4.5%, and the proportion of R&D personnel to the total number of company personnel has stabilized at about 12%. 2) One of the drafting units of the company's construction machinery seat national standards, and has won many industry-related awards, such as the 2010 Driver Seat Industry Special Contribution Award, 2016 and 2017 China Auto Parts (Body Parts) Annual Contribution Award - Lingxuan Award, etc. 3) The company's layout is lightweight and intelligent. In terms of lightweighting, it has been equipped to produce magnesium-aluminum alloy skeletons for high-end electric vehicles, as well as carbon fiber skeleton technology using integrated molding, thermoseting and injection molding, and has achieved commercial applications. In terms of intelligence, it has completed many national torch plan projects such as intelligent memory electric seats and automotive driver's seat self-controlled airbag vibration reduction seats. 4) The company's research and development strength is relatively strong, in 2020, the company completed 5 passenger car mass production projects, 6 fixed-point projects, 23 quotation projects; aviation seats completed 5 product development; 82 new products of construction machinery commercial vehicles, and 12 new products have completed 12 tooling samples.
Jifeng shares: Acquired the European commercial vehicle seat leader and entered the passenger car seat
Jifeng Co., Ltd. is the world's leading passenger car seat accessories and commercial vehicle seats. In 2019, the company acquired Grammer, the global commercial vehicle seat leader, and after the acquisition, the company's revenue increased from 2.151 billion yuan in 2018 to 18.001 billion yuan in 2019. In the first three quarters of 2021, the operating income was 12.505 billion yuan, an increase of 13.74% year-on-year, and the net profit attributable to the mother was 161 million yuan, an increase of 154.94% year-on-year.
Jifeng's main products include passenger car seat headrests, headrest struts, seat armrests, with product and technical advantages, has entered the global procurement system of world-renowned seat assembly manufacturers such as Andotto, Lear, and Faurecia. In 2020, commercial vehicle seats, headrests, and automotive interiors accounted for 27.2%, 26.7%, and 33.7% of the revenue, respectively. In October 2021, the company issued an announcement that it had obtained the fixed point of a new car-making force seat project and entered the passenger car seat industry.
Shanghai Yanpu: Tier 2 supplier of Dongfeng Lear and Magna
Shanghai Yanpu is engaged in the research and development, production and sales of seat frame assembly and stamping parts such as slide rails, seat belts and latches. In the first three quarters of 2021, the company achieved revenue of 558 million yuan, an increase of 10.5% year-on-year, and net profit attributable to the mother of 49 million yuan, down 5.6% year-on-year.
Shanghai Yanpu is a strategic supplier of Dongfeng Lear and Magna, with products covering the main seat tier 1 suppliers in China. The company's downstream direct customers mainly include Dongfeng Lear series, Taiji Aisi series, Lear series, Yuantong system, Yanfeng system, Magna series and other world-renowned auto parts assembly manufacturers. The main business is divided into two categories: automotive seat frame and stamping parts, and the two businesses mentioned above in 2020 achieved revenue of 417 million yuan and 205 million yuan respectively, accounting for 52.7% and 25.9% of revenue.
Mingxin Xuteng: An excellent supplier of high-end automotive leather in China
Mingxin Xuteng is an excellent domestic automotive leather supplier, the products are mainly used in high-end automobile seats, armrests, headrests, steering wheels, instrument panels, door panels and other automotive interior parts. In the first three quarters of 2021, the operating income was 574 million yuan, an increase of 1.2% year-on-year, and the net profit attributable to the mother was 143 million yuan, down 10.3% year-on-year.
Mingxin Xuteng downstream customers include Fuwei system, Guoli, Jifeng system, Huaan, Autoliv system, etc., and the main end customers are FAW-Volkswagen, Geely, Great Wall and SAIC-GM-Wuling. In 2020, the whole film and the film business accounted for 80.0% and 13.6% of the revenue, respectively.
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