When Shanghai's auto industry resumed work and production, an auto parts company quietly submitted an application for listing on the ChiNext board to the Shenzhen Stock Exchange.
Zhitong Finance APP found that the prospectus of Zhejiang Hongxin Technology Co., Ltd. (hereinafter referred to as "Hongxin Technology") was accepted by the Shenzhen Stock Exchange on April 22, and Caitong Securities is its sponsor, and the company is expected to raise 747.8 million yuan.
According to the prospectus, the main business of Hongxin Technology is the research and development, design, manufacture and sales of automobile forged aluminum alloy wheels, which is the earliest high-tech enterprise in China to apply forging technology to produce automotive aluminum alloy wheels, and successfully broke the monopoly of foreign brands on forged aluminum alloy wheels in the mainland commercial vehicle market.
From the past performance, Hongxin Technology has performed well. Its revenue from 2019 to 2021 was 542 million, 617 million and 947 million yuan respectively, with a compound annual growth rate of more than 32%; In the same period, the net profit after deduction of non-attributable to the mother was 37.0763 million, 47.6287 million and 54.3935 million, respectively, with a compound annual growth rate of 21.24%.
The number of enterprises in the domestic automotive aluminum alloy wheel industry is large, and the market competition is extremely fierce, why can Hongxin Technology achieve steady growth? What are the advantages of the company? You can find out through the prospectus.
Continue to exert efforts on vehicle support and aftermarket
The mainland aluminum alloy wheel industry started late, but the development speed is faster. In 1988, the establishment of Daika Wheel Manufacturing Co., Ltd. (later renamed CITIC Dicastal Co., Ltd.) became an important symbol of the development of the aluminum alloy wheel industry in Mainland China. By 2020, the output of aluminum alloy wheels in the mainland will be 161 million, becoming the world's largest manufacturer of aluminum alloy wheels.
At the same time, the overall pattern of the aluminum alloy wheel industry in mainland China is becoming clearer, and the first echelon is a small number of large-scale and strong enterprises mainly for the vehicle supporting market, and these companies will also export their products to foreign vehicle supporting markets;
The second echelon is small and medium-sized manufacturers, mainly for the low-end vehicle supporting market and aftermarket, due to the lack of maturity of the domestic aftermarket, the aftermarket of these enterprises is mainly for foreign countries;
The third echelon is smaller enterprises, mainly for domestic or foreign manufacturers or distributors, the sector enterprises have low gross profit margins and weak competitiveness.
According to the prospectus, Hongxin Technology has laid out two major tracks for commercial vehicles and passenger cars, and has successfully entered the field of vehicle supporting while developing the aftermarket by virtue of the advantages accumulated in research and development technology, brand and product quality.
In terms of commercial vehicles, Hongxin Technology mainly focuses on the vehicle supporting market in China, and Haomet, Dongfeng Liuqi, Shaanxi Heavy Duty Truck, BYD, etc. are all company customers; The overseas market is mainly the aftermarket, and it maintains good business cooperation with brands such as WheelPros, American Wheels, FleetPride and so on.
In terms of passenger cars, Hongxin Technology is mainly aimed at the aftermarket in China, and Hangzhou Mika, Jiangsu Guangwei, Ningbo Freer, etc. are all company customers; In the overseas market, the company also focuses on the aftermarket and the vehicle supporting market.
From the performance point of view, whether it is commercial vehicles or passenger car wheels, in the past three years have shown a steady growth trend, and the proportion is relatively stable, in 2021, the revenue from commercial vehicle wheels is 55.22%, and the revenue from passenger car wheels is 38.28%. At the same time, the company also provides other products such as winch discs and wheel accessories, but the proportion is relatively small, only 6.5% in 2021.
In detail, in the commercial vehicle wheel market, vehicle supporting and after-sales have achieved steady growth, and the proportion of the two is relatively stable, in 2021, the revenue from the vehicle supporting market accounted for 55.75%, and the revenue from the aftermarket accounted for 44.25%.
In terms of passenger cars, Hongxin Technology's customers are mainly wheel manufacturers and brand owners in the aftermarket. Among them, the revenue from brand owners has grown steadily, accounting for 56.45% from 35.89% in 2019 to 56.45% in 2021, becoming the core driving force for the growth of passenger cars. At the same time, the company through J. T. Morton and Superior are respectively supported by American new energy vehicle manufacturers Rivian and Lucid, which makes the vehicle supporting revenue begin to gradually increase.
If you look at the regional distribution, from 2019 to 2021, Hongxin Technology has achieved steady growth in revenue both at home and abroad, and the growth rate abroad is faster than that in China, so the proportion of overseas income has risen from 34.64% in 2019 to 45.39% in 2021.
From the above analysis can not be seen, although Hongxin Technology in the past three years to achieve commercial vehicles, passenger cars two major tracks of steady growth, but the company's advantages in the two major markets are different, in terms of commercial vehicles, the company's vehicles and after-sales performance are good, but in terms of passenger cars, the company is still based on the aftermarket, the vehicle support has just begun to increase, which shows that the company's strength and brand in passenger cars are slightly inferior to commercial vehicles; And the rapid development of overseas markets has boosted the growth of the company's overall performance, of course, this has something to do with the failure to recover the overseas industrial chain in 2020 and 2021.
Cost conduction of commercial vehicles is blocked
Compared with the eye-catching revenue performance, the gross profit margin change of Hongxin Technology is significantly inferior, and it shows obvious differentiation in different markets. According to the prospectus, from 2019 to 2021, the gross profit margin of Hongxin Technology's main business was 25.97%, 25.76% and 21.03% respectively, and the gross profit margin in 2021 declined significantly.
If you look at the product categories, the gross profit margin of passenger car wheels has continued to climb in the past three years, 28.71%, 31.22%, 33.09% respectively; However, the gross profit margin trend of commercial vehicle wheels is just the opposite, from 23.62% in 2019 to 20.79% in 2020, and then down 8 percentage points to 12.64% in 2021.
Zhitong Finance APP found that in the field of commercial vehicle wheels, whether it is the vehicle supporting market or the aftermarket, the gross profit margin shows a downward trend, and the decline in the vehicle supporting market is more obvious. It is worth noting that the use of the serial substitution method found that the main factor in the decline in gross profit margin is not the change in product structure.
In the passenger car field, although the gross profit margin from wheel manufacturers continues to decline, the company's overall gross profit margin has shown a steady upward trend due to the increase in the proportion of the company's revenue from high-margin brands and the increase in the proportion of revenue from high-margin dealers in 2021.
Through the above comparison, it is not difficult to find that the gross profit margin of Hongxin Technology from the commercial vehicle market has decreased significantly, which has two possible factors: One is that the company's customers in the commercial vehicle market are mainly vehicle supporting customers and wheel manufacturers, Hongxin Technology is in a relatively weak position in the industrial chain, and because the end customer is sensitive to the price of commercial vehicle wheels, it is difficult to raise prices; The second is the intensification of competition in the commercial vehicle market as a whole, resulting in a decline in product gross margins. In the passenger car market, the company achieved an increase in gross profit margin through the adjustment and expansion of high-margin sales channels.
If compared with peers, the gross profit margin level of Hongxin Technology in 2019 and 2020 is slightly better than the industry average, but it is significantly lower than that of Dishengli (603335.SH), which is mainly because Dishengli mainly does overseas markets, focuses on the high-margin aftermarket, and is mainly based on passenger car wheels, while Hongxin Technology has adopted a balanced development strategy in terms of market, product structure and geography.
We should grasp the new trends in the industry but still face development problems
From the perspective of the development trend of the aluminum alloy steam wheel industry, lightweight and new energy vehicles are the new direction of future development, which is also a new opportunity for the development of aluminum alloy steam wheel manufacturers.
At present, the world's major well-known automobile manufacturers continue to pursue the manufacture of better performance, more energy-saving and environmentally friendly cars, and "lightweight" is one of the most important ways for major automobile manufacturers to improve car driving performance, energy saving and consumption reduction, especially new energy vehicles in order to achieve mileage endurance has been upgraded to aluminum alloy wheels as standard, the development trend of automobile lightweight has gradually formed.
Forging is the key process to achieve lightweight aluminum alloy wheels. Compared with the casting process products, forged aluminum alloy wheels have the characteristics of lightweight, high strength, energy saving and emission reduction, good driving smoothness and high comfort. At the same time, with the improvement of environmental protection requirements and the development trend of automobile lightweight, the role and status of forging technology in the production and application of aluminum alloy wheels in the mainland will become higher and higher.
At present, the domestic aluminum wheel production process is still based on casting, and the scale of forging aluminum wheel production enterprises is relatively small, but automotive wheel enterprises that are mainly based on casting technology, including Wanfeng Aowei, Lizhong Group, Andifei Kaida, have also laid out forged aluminum wheel production lines, and Hongxin Technology has a first-mover advantage in the aluminum alloy production process, laying a solid foundation for the company's future growth.
And in terms of new energy vehicles, Hongxin Technology actively develops new energy vehicle customers, and its products have been passed by J. T. Morton and Superior are supported by American new energy vehicle manufacturers Rivian and Lucid, respectively. However, the current proportion of this part of the business is still small, and it is necessary to continue to observe the volume of products and the expansion of new customers.
While seizing the new opportunities of technological change in the industry, the potential risks and problems faced by Hongxin Technology in the development process cannot be ignored. From the above analysis, it is not difficult to see that the company's steady development in 2020 and 2021 is largely due to the improvement of the domestic epidemic situation, and the company's products have accelerated their penetration in overseas markets where the industrial chain has been destroyed.
However, in 2022, such a trend may reverse, the industrial chain of overseas markets will recover significantly, and there will still be epidemic disturbances in China. Fortunately, the decline in the exchange rate will boost exports to some extent, but it is still unknown whether Hongxin Technology's overseas revenue growth in 2023 can maintain the level of the past two years.
At the same time, the high cost will make Hongxin Technology face greater pressure in the development process, which is also a problem faced by all midstream manufacturing enterprises. Due to the continued high inflation of the world, aluminum prices remain at a high level of shock, according to the Data of Changjiang Aluminum Network, the spot price of China Aluminum once rushed to 22000 in April, further higher than in 2021, the cost pressure of Hongxin Technology rose, and because commercial vehicles could not carry out smooth price transmission, the profitability of the company's commercial vehicles may decline again.
In addition, the excessive concentration of customers is also one of the potential risks of Hongxin Technology. According to the prospectus, from 2019 to 2021, the revenue of Hongxin Technology from the top five customers accounted for 40.34%, 42.2% and 47.38% respectively, showing a gradual concentration trend; And in 2021, pride matech alone has a revenue of 17.47%. If the demand of such customers declines, it may have a significant impact on the performance of Hongxin Technology.
On the whole, Hongxin Technology has benefited from the recovery of the domestic economy in the past two years to achieve a steady development of revenue at home and abroad, but the cost transmission of commercial vehicles has not been smooth, which has reduced the overall gross profit margin. Although the company has accelerated the layout of new energy vehicles and lightweighting, the disturbance of the domestic epidemic, the recovery of overseas industrial chains, the high cost and the concentration of customers are all problems that Hongxin Technology needs to face, and its future development is still not easy.