Since 2009, China has become the world's largest automobile producer and sales country for 12 consecutive years, and can be called the most important engine for the development of the global automobile industry. The booming automotive industry has also spawned a boom in the automotive interior and exterior trim industry. As the largest market segment in the field of auto parts, the annual growth rate of the output value of the interior and exterior accessories industry in mainland China has basically remained at 15%-20% in recent years, and the overall market size in 2019 is about 240 billion yuan, accounting for more than 30% of the global market.
The scale of the industry continues to rise, and at the same time, the automotive interior parts industry also shows a new development trend: on the one hand, with the increasingly high standards of automobile energy conservation and emission reduction in various countries around the world, the demand for automobile environmental protection and lightweighting promotes the development of automotive interior parts to lightweight; on the other hand, with the transformation of traditional automobiles to electrification, networking, intelligence and sharing, the demand for comfort and intelligence of automotive interior parts is increasing day by day under the new trend.
Zhitong Finance APP noted that a few days ago, Anhui Province specialized special new enterprise Fersa Technology recently submitted a prospectus, the company focused on the research and development, production and sales of automotive interior parts. According to the disclosure, Fersa Technology is an integrated solution provider integrating product design, mold development and manufacturing, component molding, surface coating, appearance coating and product assembly, and has formed a business layout based on functional parts and decorative parts as an important development direction.
Performance rose steadily, and rising raw material prices squeezed gross margins
In terms of performance, the core financial data of Fersa Technology in the first nine months of 2018-2021 maintained a relatively high growth. During the period, the company achieved revenue of 353 million yuan, 427 million yuan, 464 million yuan and 412 million yuan, and net profit of 11.5186 million yuan, 48.2125 million yuan, 61.8253 million yuan and 55.477 million yuan, respectively.
It is worth mentioning that the performance of Fersa Technology has risen year by year from 2018 to 2020, which coincides with the period of continuous decline in domestic automobile sales. According to public data, global automobile production and sales reached a historical peak in 2017, and China's automobile production and sales in the same year were 29.02 million and 28.88 million vehicles, respectively, which were also historical peaks. Since 2018, global and mainland automobile production and sales have slowed down to a certain extent.
However, the cooling of the environment has obviously not hindered the growth of Fersa Technology. From the perspective of splitting the revenue structure, the revenue sources of Fersa Technology include two major blocks: main business income and other business income. Among them, the proportion of main business income is around 90% perennial.
Further subdivided, the main business of Fersa Technology can be divided into two parts: functional parts and decorative parts, of which functional parts have undergone 2 years of continuous growth, and the revenue has risen from 206 million yuan in 2018 to 274 million yuan in 2020, and the proportion of scale hovers in the range of 55%-70%; the revenue of this sector in the first nine months of 2021 has reached 257 million yuan, and the scale is approaching the whole year of the previous year.
Fersa Technology's functional parts revenue performance was strong, due to the increase in volume and price of products in this business line during the period. From 2018 to 2020, the sales volume of functional parts of Fersa Technology rose from 15.1507 million pieces to 18.3715 million pieces, and the unit price rose from 13.58 yuan to 14.94 yuan; in the first nine months of 2021, the sales volume of functional parts has reached 15.8004 million pieces, and the unit price has further increased to 16.26 yuan.
In the same period, the revenue of Fersa Technology's decorative parts business showed certain volatility. From 2018 to 2020, the revenue of decorative parts was 93.6022 million yuan, 164 million yuan and 141 million yuan, respectively. Among them, in 2020, the company's sector showed negative growth, and the revenue of sub-categories such as sub-instrument panels, main instrument interior panels, decorative rings and decorative strips and other decorative parts in the year fell by 23.32%, 14.18%, 20.72% and 19.17% respectively year-on-year.
Zhitong Finance APP learned that at that time, the revenue of many decorative parts business lines of Fersa Technology declined significantly, and the reasons behind it were related to the sharp decline in the production of the company's main customer, Beijing Hyundai's Festa models. It is reported that the output of Fiesta in 2020 fell by 68.89% year-on-year compared with 2019, which directly dragged down the revenue of the company's above-mentioned decorative segments.
On the profit side, as mentioned earlier, the net profit of Fersa Technology in the previous period continued to grow with the increase in the company's revenue scale. However, it should be noted that the gross profit margin of the company's main business in the same period did not show the same direction of growth, but deteriorated. From 2018 to the first nine months of 2021, the gross profit margin of the company's main business was 35.59%, 33.68%, 33.13% and 32.35%, respectively.
Compared with peers, it is not difficult to find that the average gross profit margin of major listed companies in the interior parts industry has also shown a downward trend in recent years. The reason may be related to the continuous upward impact of commodity prices on the cost of major raw materials in the auto parts industry in the context of loose global liquidity. Taking Fersa Technology as an example, the main raw materials used by the company for production include plastic particles, chemical materials, etc. The price of plastic particles in the first nine months of 2021 increased by 13.06% compared with the average purchase price of the previous year, and the average purchase price of chemical materials increased by 14.48%.
Raising capital to expand production and betting on the upward trend of the industry?
Looking back at the automotive interior parts industry, from the perspective of the industry, the current automotive interior parts have formed a pyramid-type multi-level supporting supply system with the main vehicle support, the vehicle manufacturer as the core, and the parts supplier as the support.
Since the 21st century, with the development of science and technology, a variety of display and control technologies have been in the experimental or application stage, and the design of automotive interiors has also undergone major changes. According to the data, smarter displays and more elaborate interior atmosphere creation appeals have made the proportion of interior costs in the vehicle cost increase from about 12% in 2012 to more than 20% year by year, which undoubtedly stimulates the expansion of the interior parts industry. In addition, as mentioned earlier, in the process of transformation of traditional vehicles to electrification, networking, intelligence and sharing, interior parts are also developing towards lightweight, comfort and intelligence.
Under the above wave of technology, it can be said that new development opportunities have been ushered in for interior parts manufacturers. Specifically looking at Fersa Technology, the company has been deeply involved in the field of automotive interior parts since its inception, and its main products are used in multinational automobile brands such as Nissan, Mazda, Honda, Toyota, Hyundai, and Ford, as well as domestic independent automobile brands such as Great Wall Motor, Geely Automobile, Chery Automobile, changan Automobile, etc., and are also used in leading enterprises of new energy vehicles such as T Company and BYD.
According to the prospectus, in 2020, the market share of the company's core products air conditioner air outlet, cup holder and storage box in the global automobile reached 2.24%, 1.5% and 0.72% respectively, and has formed a certain influence in the industry.
In this sprint to the CHINext board, Fersa Technology intends to invest most of the funds raised in the project with an annual output of 4 million sets of automotive functional parts (phase I), and it is reported that after the completion of the project, it will form an annual output of 3 million sets of automotive functional parts production capacity.
Although the fundraising expansion is expected to greatly increase the production capacity of Fersa Technology's functional parts products, it should be noted that the company's capacity utilization rate in recent years has a downward trend in terms of the data disclosed in the prospectus. According to reports, due to the large variety of products of Fersa Technology, and different products correspond to the needs of different customers, the output of different products produced by the same machinery and equipment is quite different, so it is impossible to accurately determine the company's production capacity according to the number of products. However, most of the company's production involves injection molding or blow molding processes, so the use time of injection (blow) molding machines can roughly reflect the company's overall capacity utilization.
The data shows that from 2018 to the first nine months of 2021, the capacity utilization rate of the company's injection (blow) plastic machines was 103.64%, 99.61%, 85.46% and 86.3%, respectively, showing an overall downward trend. According to the disclosure, the capacity utilization rate of Fersa Technology in 2020 has dropped significantly, mainly due to the impact of the epidemic and new plants and machines.
The existing capacity utilization rate continues to decline, but Fersa Technology still wants to raise funds to increase the functional parts business, and whether the future new project will further drag down the company's capacity utilization rate after it is put into production is still unknown.
On the whole, the automotive interior parts industry is closely related to the development of the macro economy and the automotive industry, considering that the main customers of Fersa Technology are well-known auto parts suppliers and vehicle manufacturers at home and abroad, the company's performance is expected to fluctuate with the industry in the long run; in addition, the fluctuations in the price of upstream raw materials, as well as the effectiveness of the fundraising and expansion project, are expected to disturb the company's future performance, based on this Fersa Technology can continue the performance growth trend still needs to be considered.