2021-10-28Cui Yan of Huaxi Securities Co., Ltd. conducted a study on Jifeng shares and issued a research report "Performance short-term pressure on passenger car seats from 0 to 1", this report gives a buy rating to Jifeng shares, believing that its target price is 12.25 yuan, the current stock price is 10.12 yuan, and the expected increase is 21.05%.
Jifeng Shares (603997)
Event overview
The company announced the third quarterly report of 2021: 2021Q1-Q3 achieved revenue of 12.51 billion yuan, an increase of 13.7% year-on-year; net profit attributable to the mother was 160 million yuan, an increase of 154.9% year-on-year, and net profit after deduction of non-attributable to the mother was 140 million yuan, an increase of 149.7% year-on-year. Among them, the revenue of 2021Q3 was 3.78 billion yuan, a year-on-year decrease of 12.5% and a decrease of 9.8% month-on-month; the net profit attributable to the mother was -0.3 billion yuan, a year-on-year decrease of 143.7%, a decrease of 144.3% month-on-month, and the net profit of non-attributable to the mother was -0.3 billion yuan, a year-on-year decrease of 141.5% and a decrease of 164.8% month-on-month.
Analytical decisions:
Performance short-term pressure passenger car seats from 0 to 1
The company's 2021Q3 revenue was 3.78 billion yuan, -12.5% year-on-year, -9.8% month-on-month, of which Grammer's revenue was 430 million euros (equivalent to 3.21 billion yuan), -6.4% year-on-year, -7.8% month-on-month, mainly affected by the lack of core; Jifeng headquarters revenue was about 570 million yuan, -35.2% year-on-year, -9.5% month-on-month. Affected by the increase in costs and the decline in scale effects caused by the increase in raw material prices, the company suffered a loss in 2021Q3, with a net profit attributable to the mother of -0.3 billion yuan, of which Grammer lost about 0.5 billion euros (equivalent to 370 million yuan) With the gradual alleviation of core shortage and raw material price increases, the steady progress of overseas demand repair and integration, it is expected that Grammer's performance is expected to rebound from 2021Q4, driving the company's performance upwards.
At the business level, the company obtained the fixed point of the passenger car seat project of a new car brand OEMs in October, which is a breakthrough from 0 to 1, and it is expected that the value of the bicycle will increase from the previous 300-400 yuan (headrest + armrest, Tier 2) to 5,000 yuan (seat assembly, Tier 1). Passenger car seat due to high technical barriers, long-term monopoly by Foreign suppliers such as Antaoto, Lear, etc., the company is the global headrest subdivision leader, the global market share of more than 25%, reflecting a strong cost control ability, it is expected that the future is expected to rely on cost performance and rapid response ability in the field of passenger car seats to accelerate the share of shares, open up growth space.
Gross margin decline in R&D to maintain investment
2021Q3 company gross profit margin of 12.4%, -3.6pct, of which Grammer gross margin of 6.7%, -4.4pct, chain-on-month pressure mainly due to raw materials (steel, plastic particles, chemical raw materials, etc., direct materials account for about 70% of the cost) The impact of price increases superimposed on the lack of cores led to a decline in capacity utilization. In terms of expenses, the 2021Q3 management expense ratio, R&D expense ratio, sales expense ratio, and financial expense ratio were 8.0%, 2.1%, 1.8%, and 2.5%, respectively, -0.9pct, -0.2pct, +0.2pct, +1.5pct, of which the company continued to maintain R&D investment (2021Q3 reached 0.8 billion yuan, +17.4% year-on-year), and forward-looking judgment on the future trend of product technology to maintain the international leading technical advantages in passenger car seats, central control systems, etc.
Full synergy refers to the global smart cockpit faucet
Following the acquisition of Grammer of Germany by Feng Group in 2018, the completion of the delivery in 2019 and the merger of the table began in 2019Q4, and the full integration began in 2020, including the adjustment of the organizational structure of Grammer, the reduction of costs and efficiency of multiple measures, and the integration of the layout of the production base, etc., the operation improvement was highlighted. At the same time, Grammer and Jifeng jointly develop the market, products empower each other, customers import each other, and jointly increase market share. In the face of the century-old great change of electric intelligence in the automotive industry, the company actively embraces and horizontally expands intelligent new products such as passenger car seats, audio headrests, mobile central control systems and armrests, 3DGlass glass technology, etc., vertically lays out smart home-type heavy truck cockpits, electric air outlets, etc., and breaks through Tesla, Weilai, Ideal and other new car-making forces, in the long run, "Dajifeng" is expected to give full play to the technical advantages such as seats accumulated in Grammer for a hundred years and Jifeng's flexible mechanism of private enterprises to impact the trillion-dollar market of intelligent cockpits, pointing to the global leader.
Investment advice
The integration results are gradually apparent, new products and new customers are accelerating, and "Big Jifeng" (Jifeng + Grammer) is expected to become a global intelligent cockpit leader in the future. Taking into account the impact of missing cores and rising raw material prices, the profit forecast is revised downward: it is expected that the revenue for 2021-23 will be adjusted from 188.7/218.3/25.76 billion yuan to 178.6/207.0/24.43 billion yuan, and the net profit attributable to the mother will be adjusted from 5.1/6.5/900 million yuan to 2.9/5.4/840 million yuan, and the EPS will be 0.26/0.49/0.76 yuan, corresponding to the PE40/21/14 times the closing price of 10.4 yuan on October 28, 2021. Considering the high growth of passenger car seats, maintaining the company's 25 times PE valuation in 2022, the target price was adjusted from 15.0 yuan to 12.25 yuan, maintaining the "buy" rating.
Risk Warning
Sales in the passenger car industry are less than expected; consolidation progress is less than expected; customer expansion is less than expected; industry competition is intensifying; raw material costs are rising.
A total of 5 institutions have given ratings in the last 90 days, 4 buy ratings and 1 overweight rating; the average target price of institutions in the past 90 days has been 12.87; the Securities Star Valuation Analysis Tool shows that Jifeng Shares (603997) has a good company rating of 2.5 stars, a good price rating of 2.5 stars, and a valuation comprehensive rating of 2.5 stars.