Ren Lang, Li Junyi recently conducted research on Huguang shares and released a research report "Company In-depth Report: Leading Automotive Wiring Harness Enterprises, Performance Inflection Point Has Arrived", this report gives an overweight rating to Huguang shares, and the current stock price is 1931 yuan.
Huguang shares (605333).
With more than 20 years of deep cultivation in the industry, customers have increased their performance to meet the inflection point.
The company is mainly engaged in high and low voltage wiring harnesses for automobiles, benefiting from the general trend of electrification and intelligence, and has been designated by a number of high-quality OEMs. Due to the lower than expected utilization rate of the Chongqing factory, the company incurred a loss in 2023H1, so we lowered the 2023-2024 profit and added a 2025 profit**, and the net profit attributable to the parent company is expected to be 065（-1.41） /3.92（-0.08） /5.5.2 billion yuan, corresponding to EPS of 015（-0.32） /0.90（-0.02） /1.26 yuan shares, the current stock price corresponds to a PE of 127 in 2023-20250/20.9/14.8 times. Since the release of the new M7 in 2023Q3, the capacity utilization rate of the company's Chongqing plant has climbed rapidly, and it has been in full production, and the performance inflection point has arrived, maintaining the "overweight" rating.
Electric intelligence drives the improvement of market space, and domestic enterprises accelerate domestic substitution.
The improvement of the level of autonomous driving increases the demand for sensors, and more low-voltage wiring harness connections are required for intelligent functionsThe general trend of high-voltage fast charging has driven the long-term demand for high-voltage wiring harnesses. We estimate that the domestic automotive wiring harness market is expected to reach 98.3 billion yuan in 2025, with a CAGR of about 10% from 2022 to 2025, and the new energy vehicle wiring harness market space accounts for 71%, becoming an important driving force. Local enterprises gradually realize domestic substitution with excellent technology + high-quality service + cost advantages. The automotive wiring harness industry is mainly monopolized by foreign-funded enterprises, and the CR3 of the global automotive wiring harness industry will exceed 70% in 2021. With reliable product quality, rapid response to customer needs and low-cost advantages, local enterprises have gradually entered the supporting system of well-known OEMs to replace foreign-funded enterprises.
Supporting multiple model platforms, we continue to reduce costs and improve profitability.
On the revenue side, the company has entered the ** chain of SAIC Volkswagen, Daimler-Benz, Audi, Li Auto, Cialis, Chery Automobile, and T Company of the United States. (1) The company has cooperated with Volkswagen Group for more than 20 years, and its development strength and product quality have been highly recognized(2) The company provides supporting services for the high and low voltage wiring harnesses of the new M7, M9 and M5, and at the same time, the delivery of the new M7 exceeds expectations and brings new performance increments(3) The company supplies new power car companies such as T Company and Li Auto in the United States, and is about to enter the harvest period. On the cost side, (1) the company promoted the replacement of copper wire with aluminum wire, and a number of models were successfully mass-produced;(2) The company continued to improve the intelligent manufacturing system, and the proportion of direct labor costs in 2022 was reduced by 1 compared with 201841pct, helping the gross profit margin to rise steadily.
Risk Warning: Raw materials fluctuate, industry competition intensifies, and the company's product research and development progress is less than expected.
*According to the calculation of the research report data released in the past three years, the research team of Deng Xue of CICC has conducted in-depth research on the stock, and the average accuracy of the stock in the past three years is as high as 8626%, and its **attributable net profit in 2023 is 37 million, and the **PE converted according to the current price is 22149。
The latest profit** breakdown is as follows:
A total of 7 institutions have rated the stock in the last 90 days, with 6 ratings ** and 1 overweight ratingsThe average institutional price target over the last 90 days is 2222。
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