2021-10-18Hu Xiaohui of Guoyuan Securities Co., Ltd. conducted a study on Jiangsu Leili and released a research report "In-depth Report: The Demand potential of electronic water pumps for energy storage is large, and the localization of medical business is obviously replaced", this report gives a buy rating to Jiangsu Leili, believing that its target price is 35.52 yuan, the current stock price is 24.7 yuan, and the expected increase is 43.81%.
Jiangsu Reilly(300660)
The company is deeply engaged in the manufacture of micro-motors for home appliances, and the layout of high prosperity fields.
The company is a global home appliance micro motor and intelligent components manufacturing industry in the leading enterprises, its air conditioning micro motor and washing machine drainage pump in the global market share of 40%, 20% respectively, it is expected that the implementation of the new domestic energy efficiency standards will promote the company's air conditioning micro motor market share to further increase. On the basis of the leading market share in the home appliance field, the company entered the field of high-end medical equipment and new energy vehicles through epitaxial acquisitions. The company recently launched an equity incentive plan and disclosed a major asset restructuring plan to further expand its business upstream in the industry.
Electronic water pump sales are expected to explode with the energy storage market.
The sales share of Reilly electronic water pumps in the domestic new energy commercial vehicle market has reached 25%-30%, and has entered the supply chain of energy storage systems in the Ningde era. Due to the active promotion of domestic and foreign policies, the demand for energy storage has begun to explode. According to GGII, global energy storage battery shipments will reach 416GWh in 2025, with a compound annual growth rate of about 72.8% over the next 5 years. Liquid cooling will become the mainstream trend of thermal management of energy storage systems, and in liquid-cooled battery cooling systems, the coolant needs to be forcibly circulated through the pump. The company's 300W electronic water pump corresponds to a 375KWh energy storage battery, and the sales volume of the electronic water pump will grow at a high speed with the shipment of energy storage batteries.
The trend of localization and substitution in the medical field is obvious.
The company acquired Dingzhi Technology in 2019 and began the layout of the medical field. Dingzhi's main products are screw stepper motor, voice coil motor, etc., screw stepper motor is mainly used in IVD medical equipment, the global IVD market size is considerable, and the domestic market is growing rapidly. Due to the high technical barriers of the medical subdivision industry, the number of companies participating in the competition is very small, and the overall gross profit margin of Dingzhi exceeds 50%. The core raw material screw originally relied on imports, Dingzhi has now formed its own screw production system, in addition, the voice coil motor produced by Dingzhi is the core component of the invasive ventilator, and has also achieved localization substitution.
Investment advice and profit forecasts
The company's traditional home appliance sector is growing steadily, and the prosperity of new energy vehicles and medical fields is expected to maintain a high level for a long time. We expect the company's net profit attributable to the parent in 2021/2022/2023 to be 3.29/4.18/530 million yuan, respectively, with a year-on-year growth rate of 20%/27%/27% respectively. Comparable companies include Wolong Electric Drive, Dayang Electric, Mingzhi Electric Appliances, Collier, etc., with reference to the median PE value of 23× in 2021, considering the company's new layout field development prospects are considerable, give a certain valuation premium, corresponding to the 2021 PE28 ×, the company's reasonable market value of 9.2 billion yuan, given a "buy" rating.
Risk Warning
Energy storage battery shipments are less than expected, the popularization of liquid cooling mode is slow, the localization of motors in the medical field is slower, and the growth rate of air-conditioning micro-motor products has slowed down.