The Zhitong Finance App learned that Everbright Securities released a research report saying that the US inflation reduction bill boosts demand for new energy vehicles in North America, superimposes restrictions on parts assembly and production in North America, and domestic parts companies are showing a trend of speeding up their overseas expansion. The bank estimates that the number of domestic parts suppliers that have built or are planning to build factories in Mexico is as high as 26; of these, about 40% + (11) are related to weight reduction. Judging from industry trends, there is strong certainty that aluminum will replace steel for car bodies. The aluminum die casting process is expected to benefit the most widely used, and the acceleration trend of large-scale high vacuum die casting is obvious. The bank believes that the core barrier to large-scale high vacuum die casting is process+mold, and parts suppliers that have mastered related processes and have mold design capabilities may have long-term competitiveness.

The views of Everbright Securities are as follows:

Lightweighting accelerates the overseas layout of supporting parts manufacturers:

The US Inflation Reduction Act (IRA, 2022) boosted demand for new energy vehicles in North America (US NEV sales grew 52.9% year on year in 2023, penetration rate +2.4 pcts to 9.0% year on year), superimposed restrictions on parts assembly and production by some North American regulations, and domestic parts companies showed a trend of speeding up overseas sales. The bank estimates that the number of domestic parts suppliers that have built or are planning to build factories in Mexico is as high as 26; of these, about 40% + (11) are related to weight reduction. Judging from industry trends, there is strong certainty that aluminum will replace steel for car bodies. The aluminum die casting process is expected to benefit the most widely used, and the acceleration trend of large-scale high vacuum die casting is obvious. The bank believes that the core barrier to large-scale high vacuum die casting is process+mold, and parts suppliers that have mastered related processes and have mold design capabilities may have long-term competitiveness.

Car body aluminum castings are showing a trend of large-scale expansion, and large-scale high-vacuum die-casting processes are expected to benefit:

According to the bank's judgment, the process trend of car body structural parts used in high/ultra-high vacuum high pressure casting is clear: 1) New energy vehicles no longer require complex transmission and exhaust systems, and the body floor structure is simple, providing favorable conditions for transition to large-scale high vacuum die castings; 2) Compared with ordinary die casting, the advantages of high vacuum high pressure die casting are that it can manufacture parts with thin walls, parts that are less prone to porosity, and better ductility and impact resistance.

Four elements of process barriers:

Process > mold > material > equipment: large-scale high vacuum die casting process barriers are: 1) equipment: large high vacuum die casting machines are larger in size and require high clamping force; 2) materials: the heat-free aluminum alloy used must meet performance requirements while ensuring compatibility with structural design; 3) mold: larger mold size+higher sealing requirements+long development cycle; 4) process: strict control of process parameters. Temperature control strategies and pressure changes in different filling states+real-time monitoring of mold temperature trends are the core key to the process. According to the bank, the importance of the four factors is ranked as process > mold > material > equipment.

Long-term coexistence with OEMs and leading die-casting manufacturers: The bank expects the world's large-scale high-vacuum die-casting to enter the “1-10” stage of rapid development in 2025, and the market space for the rear floor+front cabin is expected to exceed 10 billion yuan.

In the long run, improving the yield of large high-vacuum die castings still requires accumulation of experience, speeding up model iteration, and continuous updating of mold equipment. They are optimistic about mastering related processes and relevant targets with independent mold design capabilities.

Investment advice: Domestic component targets that have already laid out or planned layouts in Mexico, master die-casting processes, and have independent mold design capabilities are expected to expand their business. 1) iKodi (600933.SH): Focusing on “invisible champion” products for small and medium parts, lean management+global layout empowers the company's long-term development and first “buy” rating; 2) Xusheng Group (603305.SH): The new energy business grew along with Tesla, and the three major aluminum alloy molding processes+household storage business may drive rapid growth in the company's performance, giving the first “buy” rating; 3) Rongtai Co., Ltd. (605133.SH): As a market leader in the domestic automobile transition to aluminum casting+overseas layout, it first received a “buy” rating. .

Risk analysis: Global trade frictions and macroeconomic policy uncertainty, US NEV penetration rate falls short of expectations, parts company construction progress in Mexico falls short of expectations, and integrated die-casting global market growth falls short of expectations.