Depth * Company * Junsheng Electronics (600699): Safety integration promotes performance growth Automotive electronics have a bright future
The company is a well-known supplier of automotive electronics and automotive safety systems in China. Its main products include automotive active and passive safety systems, automotive electronic systems (HMI, smart car linkage, electric vehicles) and functional components. Its main customers include domestic and foreign mainstream vehicle manufacturers.
After the company completed the acquisition of Takata’s main assets other than the PSAN business in 2018, the company has become the world’s second largest manufacturer of automotive safety products.
With the continuous advancement of the integration process and continuous replenishment orders, the gross margin and net profit level of the security business gradually increased, driving the company’s rapid growth in performance.
In terms of automotive electronics business, the company’s smart cockpit, V2X car-end products, new energy vehicle management systems and other products have broad prospects for advanced technologies. In 2018, more than 17 billion new orders were received.
In addition, the company’s connected car business is expected to spin off and go public, improving the company’s assessment level.
We expect the company’s estimated earnings for 2019-2021 to be zero.
93 yuan, 1.
17 yuan and 1.
55 yuan, the first buy rating.
Key points supporting the rating The acquisition has become the world’s second-largest security system supplier, and 重慶耍耍網 integration has driven the growth of gross profit margins.
After the completion of Takata’s main assets other than the PSAN business in 2018, the company has become the world’s second largest automotive safety product manufacturer.
The company promoted integration through various means and achieved better results.
The security business received more than 55 billion new orders, with global cities accounting for about 30%. Active security products such as DMS have been mass-produced.
The gross profit margin level of the security business is up from 201713.
6% increased to 16 in 2019H1.
At 7%, through the optimization of cost structure brought about by capacity optimization and order addition, the subsequent gross profit margin is expected to continue to increase and promote the rapid growth of the company’s performance.
Automotive electronics products are being introduced, and the development prospects are promising.
In terms of HMI business, the company launched cutting-edge new products such as integrated smart cockpits, and obtained a large number of orders.
In terms of smart car linkage, the company has won orders from SAIC and FAW-Volkswagen for MQB and MEB platforms for in-vehicle interconnection, and independently researched and developed V2X car-end products for mass production in 2021. It is expected to become the world’s first 5G-V2X mass production project.
With the advent of the 5G era, the market for V2X connected vehicles is vast, and the company’s grasp of opportunities is promising.
In terms of electric vehicle business, the company’s new energy vehicle management system and other products have advanced technology, and have successively won new orders such as Volkswagen’s MQB and MEB and Mercedes-Benz’s next-generation electric platform.
In addition, the company is optimistic about the overall layout of charging, power distribution, and discharge.
The Internet of Vehicles business is expected to spin off and go public.
In August 2019, the China Securities Regulatory Commission issued “Several Provisions on the Pilot List of Spin-off Subsidiaries of Listed Companies (Consultation Draft)”, which clarified the substantive conditions for the spin-off of listed companies.
The company’s connected car business has advanced technology, sufficient orders, and meets relevant conditions. It is expected to spin off and go public in the future and increase the company’s expected level.
We estimate that the company’s 2019-2021 revenue will be 0.
93 yuan, 1.
17 yuan and 1.
55 yuan, the company has good prospects in the areas of smart car, new energy, and car safety.
The main risks faced by the rating are 1) the progress of security business integration is less than expected; 2) the development of new automotive electronics business is less than expected.