Automotive industry "golden decade"
Own brand or renew smartphone brilliant
The rapid economic development in China and the rapid improvement of people's living standards have directly contributed to the "golden decade" of China's automobile industry. Cars from the original luxury, has become almost every household necessities.
The development of independent brands is by leaps and bounds, the car made better and better, sales are higher and higher, has occupied half of China's auto market share, especially the SUV market, but also the world of its own brand. With the growth of sales volume, self-owned brands gradually got rid of the "low-end" hat and gradually infiltrated the middle and high-end markets. Geely's collar and the Great Wall Wei faction is one of the outstanding representatives. (see picture 1)
In addition to their own feelings, the data can also fully explain the problem. According to the latest sales figures in October 2017, only self-owned brands achieved year-on-year growth and double-growth on a quarter-on-quarter basis. Is far ahead of the joint venture brand and imported models, compared to the same period last year, the chain were significantly lower Peugeot, Citroen and other brands represented by the Department of Automotive and Cadillac, JEEP, Ford and other brands represented by the United States Department of Automotive, Autonomous Brand sales growth in the still maintained a steady upward trend. At the same time, the Chinese automobile market is no longer dominated by the developed countries such as Japan, Japan and the United States. The economic growth brought about by the strong and prosperous people in the country is pushing the made in china onto the world stage.
Parts companies will benefit from long-term
Benefiting from supply chain management, auto parts enterprises and vehicle enterprises have established long-term strategic cooperative relations, and their technical and quality levels have been continuously improved during their interaction with the R & D and production of vehicle enterprises. FAW, Dongfeng, SAIC, Changan and other large-scale self-brand vehicle business rapid development, will further promote the rapid growth of domestic independent auto parts enterprises.
In addition, with the upgrading of the quality of domestic automobiles, the core technologies of domestic auto parts enterprises are gradually improving and their competitiveness constantly strengthened. (See Figure 2)
Data show that the number of car ownership in our country has risen year by year, exceeding 172 million in 2015, exceeding 40 million vehicles in 40 cities in the country and 265 million in the United States. In the next five years, China is expected to sell at least 25 million cars a year, and by 2020 China's car ownership will reach 300 million. With the increase of car ownership year by year, the development of China's auto aftermarket is also worth the wait, which will also bring a large amount of market demand for auto parts.
At present, China is in the stage where traditional fuel-powered vehicles and new-energy vehicles coexist alternately. Most auto makers face the traditional fuel-powered cars on the one hand, and accelerate the development of new energy vehicles on the other hand, and seek partners. Today, we can see that more and more different kinds of fuel-driven vehicles have emerged on the roads. The progress of the times not only does not affect the number of vehicles in various cities, but increases the total number of vehicles on the market. In the future, Will flourish and reach a new height. However, whether fuel or non-fuel vehicles, all this can not be separated from the supply of auto parts.
For the auto parts market, its development prospects can be analogy the rise of China's smart phone industry history. With the market share of inexpensive products, Xiaomi, Huawei, OPPO, Vivo and other domestic machine brands gradually penetrate into the mid-to-high-end fields while also driving the rapid development of domestic mobile phone supply chains. In this industry, , Han's Laser, Anjie Technology, Ophelia and a number of big cattle stocks, White Horse shares.
With reference to the same logic, the domestic auto parts market is also expected to give birth to a number of large Ushimata.
Niugu automobile industry chain is now frequent
In fact, the corporate development dividend brought by the upgrading of the domestic automobile industry has gradually been reflected in the share prices of some companies. Geely Automobile became the leader of Hong Kong stocks that shoulder the same share of domestic shares such as Sunac China and China Evergrande to directly drive the bull market of Hong Kong stocks this year. Only this year, Geely Automobile's share price has risen 2.7 times, from January 1, 2016 has so far accumulated more than 11 times. A shares SAIC and Weichai Power and other vehicles and parts companies have also been the stock price. (See Figure 3)
Soaring, as Geely, SAIC and Guangzhou Automobile and other domestic auto companies an important supplier of Zhejiang Xian Tong (603239) will also benefit from this performance.
Underestimate the value of the industry to determine the growth of leading
In the general trend of the rise of its own brand cars, seals import substitution will accelerate. According to the average of 45 meters for each car seal, 2016 domestic seal market space is about 180 billion yuan. The market share of domestic-funded enterprises in the industry is 32%, but the technology of some outstanding domestic-funded enterprises has reached or even exceeded that of foreign-funded enterprises in recent years and the prices are lower than that of foreign-funded products.
With the improvement of customer acceptance, relevant domestic-funded enterprises will rapidly realize import substitution by virtue of product cost performance, quick response capacity and flexible production capacity.
Zhejiang Xian Tong obvious advantages in this regard, the market share will gradually increase, ushering in the rapid growth of performance. The company is the only enterprise that can produce European guide groove in China, with the passing rate of products up to 95%, much higher than the industry average. After years of deep plowing, the company received the recognition of most car companies, and its growth pattern also changed. Previously tied mainly to explosive models, the future is expected as a leading company in the context of the rise of its own brand cars continue to enhance market share.
From a more long-term perspective, the company is bound to expand the field of joint-venture vehicles and foreign vehicles. At present, SAIC-GM, Toyota, Honda, Nissan, Mercedes-Benz and other joint-venture foreign-funded clients have been successfully expanded. Both inside and outside the company will surely bring about new breakthroughs in business and technology. In the long run, the path is clear and the prospects are endless.
Zhejiang cents pass the main car seals, metal roller pressure and other parts, product technology occupies a leading position in the industry, supporting its own brand star models, the growth of certain high performance. The company is a leading supplier of automotive seals. Import substitution is gradually strengthened. A variety of explosion models such as Geely Imperial series, GSK GS series and SAIC Roewe are provided for the automobile sealing strips. The performance is high with certainty of growth.
In recent years, the company's high-margin products, European-style window guide continued to heavy volume, accounting for the proportion of revenue increased, the company gross profit margin is expected to rise steadily. European car window guide product gross profit margin of up to 60%. European channel revenue in 2015 accounted for 11% of 2016, accounting for 20% in 2017 is expected to continue to rise to about 30%. The gross profit margin for the first quarter of 2017 was 48%, higher than the gross profit margin of 46% for the full year of 2016.
Capacity expansion of 2 times, sustained high growth performance support. In 2016 and 2017 respectively, the company newly built 23 million and 60 million meters of rubber automotive seals production capacity, taking into account the higher unit price of new products, production capacity sufficient to support revenue and performance volume growth of more than 2 times, is expected in revenue in 2020 The scale of 2 billion yuan.
The company made 90% of the production molds, not only can quickly follow the pace of the development of the host plant, but also reduce the cost of purchasing molds, but also enhance the product yield. Efficient simultaneous development and higher than the industry average of 5% -10% yield, can help the company to further open the downstream customers market space. European-style window guide from the original 300-500 yuan rose to 500-700 yuan, superimposed on the concept of price increases, market space increased by 50%, gross profit margin significantly improved with the new technology changes.
Recently, major brokerages such as China Merchants, Haitong, Founder and Shenwan Hongyuan have given the stock "overweight" or "buy" rating. According to the average forecast of major brokers, the company's net profit in 2017, 2018 and 2019 were 231 million, 328 million and 447 million respectively, with growth rates of 54.11%, 41.69% and 36.38% respectively. The corresponding dynamic P / E is respectively 21.53 times, 15.21 times, 11.16 times. In the undervalued range.
Joaquin Securities November research report that: We forecast the company from 2017 to 2019 earnings per share were 0.93 yuan, 1.33 yuan and 1.83 yuan. ROE of ROE was 20.3%, 24.3% and 27.1% respectively. For the first time, "Overweight-A" investment rating was given. The 6-month target price was RMB28.00, which is equivalent to a 30x FY10 PE.
Next year or welcome "twenty-eight switch"
The future market can be expected
Zhejiang Xian Tong (603239) shares have risen sharply since the beginning of this year, or more than doubled. However, under the repression of the "28" or even the "January 9" market, the share price of the Company fell along with the small and medium capitalization stocks in the latter part of the stock market. With the gradual squeeze of the sub-IPO bubble, the risk was largely released and the valuation returned to a reasonable or even underestimated range.
Stacking of the end of the fund transfer positions led by White House and blue chip sharp sell-off recently, the field of funds game changes direction, next year is expected to usher in "28 switching" market, small and medium-sized market stocks may rise again. Coupled with the vast growth prospects and the absolute underestimation of the valuation level, making Zhejiang Xian Tong (603239) to become a rare configuration of the recent target.
In terms of corporate performance, Zhejiang Xian Tong reported an increase of 38.21% in revenue and an increase of 70.98% in net profit in 2016E. We can also see that Zhejiang Xian Tong has steadily risen in performance for three consecutive years and hit new highs. Zhejiang Xian Tong latest 2017 third quarter earnings data show: the third quarter total revenue of 496 million yuan, an increase of 32.98%, net profit of 122 million yuan, an increase of 52.39%. However, good performance did not immediately bring a good market effect Zhejiang Xian Tong, Zhejiang Xian Tong's share price even appeared the opposite trend.
However, we know that company performance is linked to stock price. Performance is the support of stock price. Stock price is the performance of performance. So long as the performance is good enough, the stock price will return to the high level it needs. For the current linger in the bottom of Zhejiang Xian Tong, is not it an excellent admission opportunity?
With the rejuvenation of new energy vehicles and the acceleration of related policies, the automotive industry is bound to once again usher in further opportunities for development. At the same time, the entire upstream and downstream enterprises in the automotive industry will inevitably flourish to make up Demand gap in this market. In summary, both from industry and company fundamentals, or the market as a whole game point of view, Zhejiang Xian Tong (603239) can be an important configuration.
