Huayu Automobile (600741) Important Matters Review: Interior, Seating Business Streamlined Global Penetration Accelerates Expectation

The company issued an announcement on the evening of February 2, 2020, intending to acquire a 30% minority stake in Yanfeng Interiors; acquiring control of Yanfeng Adorto’s mechanical components, and intending to purchase patents for core components of automotive seats from Adorto.

After the above transaction is completed, the company’s interior and seat business will be further streamlined, which will help continue to increase the global penetration of the interior business and accelerate the overseas expansion of the seat business.

Looking ahead, through further optimization of the product matrix, especially the volume of electric and intelligent products such as Huayu Magna and Huayu Vision, we believe that the company has scalability.

Maintain the company’s 2019/20/21 EPS forecast2.

09/2.

23/2.

49 yuan, maintain “Buy” rating.

The company intends to acquire a minority stake in Yanfeng Interiors and gain control of Yanfeng Adient’s mechanical components.

The company issued an announcement on the evening of February 2, 2020, and proposed to use 3.

$ 7.9 billion (contract 26.

(4.4 billion yuan) from Adorto to acquire a 30% minority shareholding in the extension period and achieve 100% control.

The net assets of Yanfeng Interior in 2019 were 102 trillion, and the net profit attributable to its mother was 9.

50,000 yuan, the purchase consideration corresponds to 9.

3 times PE.

At the same time, the company reached an agreement with Adorto Asia Pacific to obtain control of Yanfeng Adorto Machinery Parts System Co., Ltd., and plans to purchase a car seat slide, angle adjuster, lock and adjustment mechanism from Adorto for $ 20 million.Relevant countries’ intellectual property rights of mechanical parts.

The interior and seat business are streamlined, and global penetration is expected to accelerate.

The company’s planned 100% holding of Yanfeng Interiors, reorganization, and cash acquisition of minority equity in Yanfeng Interiors will thicken the company’s performance; after the merger and minority shareholders exit, Yanfeng Interiors ‘business strategy and management structure will be completely streamlined, and it will be able to moreIt has achieved good business synergy with other business segments of the company, and its operating efficiency has improved significantly.

In addition, the company obtained the control of Yanfeng Adorto’s mechanical components and purchased intellectual property rights of core components of automotive seats from Adorto, which is beneficial to the global development of the company’s seat business.

After the contract is signed, the business scope of Yanfeng Machinery Parts will be expanded from the original seat business of domestic automobile customers and the business of Andorto’s overseas affiliates to all global vehicle and other customer businesses.

The company’s growth and transformation is expected to continue to improve.

The company’s shares have been extended through acquisition of minority shareholders, a joint venture with Johnson Controls Global Interiors, the acquisition of Shanghai Huizhong’s chassis business, the acquisition of a minority stake in Shanghai Koito, and a joint venture holding Huayu Magna, which has gradually transformed from an investment holding companyIt is a true comprehensive parts group.

At the same time, each also built the world’s largest interior business, China’s largest automotive lights, chassis business and so on.

Therefore, although the current estimate of Huayu Automobile is above its historical center, we believe that the company’s estimated center is actually upgrading its business and continuously improving.

At the same time, the company’s non-SAIC customers’ revenue share continued to increase, demonstrating the company’s supporting capabilities as an industry leader.

Product matrix upgrade, it is estimated that there is still room.

In 2018, the company held 100% of Shanghai Xiaoyu and renamed Huayu Vision.

Huayu Vision is the absolute leader in domestic car lights, with a domestic market share of 26% in 2017.

The company’s LED smart headlights are equipped with Cadillac XTS, SAIC-GM-Lacrosse and other joint-venture brand models, and its technological capabilities have always maintained domestic leadership.

Huayu Electric, the company’s subsidiary, mass produced the first flat copper wire motor in China, technically following Hitachi and LG.

Huayu electric products are subdivided into Roewe Marvel X and ERX5 equations, and have already been designated by the Volkswagen MEB project.

The company and Magna jointly established Huayu Magna, which has been designated by the Volkswagen MEB platform and the universal BEV3 platform for electric drive systems. The value of bicycles exceeds 10,000 yuan, and mass production is expected in 2020.

As the company continues to increase the volume of electric and smart products, it is expected that the center will continue to improve space.

Risk factors: SAIC’s sales are less than expected; foreign business is less than expected; new business falls short of expectations.

Investment suggestion: Maintain the company’s EPS forecast for 2019/20/212.

09/2.

23/2.

49 yuan.

The company’s operating efficiency has remained stable under the 杭州夜生活网 industry’s low economic climate, which reflects its ability to overcome pressure; considering the prospect of the future recovery of the industrial economy and the company’s intelligent network, electrification and lightweight new business continue to land, we think the company’s estimated valueExpansive and maintain “Buy” rating.