2021-10-15 Open Source Securities Co., Ltd. Ren Lang studied Desai Xiwei and issued a research report "small and medium-sized information update:" lack of core "and high performance under the background of rising raw material prices". The current share price is 90.45 yuan.

Desai Xiwei (002920)
Against the background of lack of cores and rising prices of raw materials, quarterly net profit returned to positive growth, in line with expectations
The company issued a forecast of results for the first three quarters of 2021, and is expected to achieve a net profit of 480-495 million yuan in the first three quarters of 2021, an increase of 50.79% 55.50% over the same period last year. Q3 is expected to achieve a net profit of 1.10-125 million yuan in the single quarter of 2021, an increase of 23.94% over the same period last year. In 2021, the company's Q1 and Q2 single-quarter net profit growth rate was 312.08% and-18.89% respectively. Under the double disturbance of core shortage and upstream raw material price increase, Q2 single-quarter profit was affected to a certain extent, and Q3 returned to positive growth. We believe that with the relief of the lack of core in the industry and the entering of the traditional peak season in the fourth quarter, the full-year performance is expected to increase. We maintain the estimated 2021-2023 net profit of 807 million yuan, 1.028 billion yuan and 1.376 billion yuan respectively. The corresponding EPS is 1.47 shock 2.50 yuan per share, and the current share price corresponding to PE is 57.3 shock 45.0 plus 33.6 times, maintaining the "buy" rating.
Sit on the high growth track, countering the trend under the double pressure of upstream and downstream.
The company's intelligent cockpit business continues to benefit from the intelligent upgrading of large-screen, multi-screen and domain-based industries. The penetration of 10-inch / 12-inch large-screen and multi-screen products continues to increase, with revenue growth of 44.13% in the first half of 2021. And continue to obtain FAW Toyota, Great Wall Motor, Geely Automobile and other head car enterprises intelligent cockpit orders. At the same time, smart driving products began to launch gradually, with revenue growth of 182.68% in the first half of 2021. 360-degree HD look, cameras and millimeter wave radar continued to contribute to revenue. Intelligent driving products won Li Auto Inc., XPeng Inc., NIO Inc. Automobile, FAW Red Flag and other customer orders. According to the statistics of the Federation of passengers, retail sales of domestic passenger cars from July to September in 2021 fell by 6.2%, 14.7% and 17.3% respectively compared with the same period last year. Under this background, the company achieved reverse growth in revenue and performance, reflecting the high growth under the prosperous track.
The marginal relief of the lack of core in the industry, the autopilot business is ready to start, and the company ushered in a high growth starting point.
With NVIDIA Corp's next-generation autopilot chip OrinX about to be mass produced in 2022, NIO Inc. ET7, Zhiji L7, ideal X01 and a series of models supporting high-grade self-driving will also be mass-produced one after another, and autopilot will usher in the first year of development. The company's autopilot domain controller IPU04 equipped with OrinX has been designated by Li Auto Inc. and other projects, benefiting from the first-mover advantage of NVIDIA Corp's cooperation. It is expected that the follow-up company domain controller will continue to obtain new orders and become a new force driving the company's performance. At present, the lack of core in the automotive industry has been alleviated, and the company's self-driving business is ready to usher in a new round of rapid growth.
Risk hint: downstream car sales are less than expected and self-driving products are facing fierce competition.