2021-12-29 Wang Huajun of Zheshang Securities Co., Ltd. conducted a research on Weitang Industry and issued a research report "Weitang Industrial Review report: Vietnamese customers' first streetcar delivery; Power Battery Box is expected to be released next year". This report gives a buy rating to Weitang Industry. the current share price is 20.37 yuan.

Weitang Industry (300707)
Main points of investment
Events:
December 25, VinFast, Vietnam has held the first VFe34 electric vehicle delivery ceremony. The incident makes Vietnam one of the few countries in the world to master the technology for the production of clean energy vehicles. (Yue Tong News Agency)
VinFast's first pure electric model, e34, is delivered, and the company's matching models are expected to be mass produced next year.
VinFast, founded in 2017, aims to become Vietnam's first global carmaker and plans to list in the US in the second half of 2022, with a reported current valuation of $50 billion. Three new smart EV--VFe34, VFe35 and VFe36 will be launched in 2021. VFe34 is a C-class electric SUV model developed specifically for the Vietnamese market. Its delivery means that Vietnam has officially joined the list of producers of new energy vehicles, and it also means that the VFe35 and E36 models are expected to be delivered successfully next year. According to the announcement of the listed company on May 13th, the company has obtained the fixed point of the project for the power battery box assembly of a certain model of VF, and the life cycle of the project is 5 years.
The profit of the traditional main business is expected to reverse; stamping parts / battery boxes / lithium devices build the driving force for long-term growth.
1. Stamping parts: the compound growth rate of income in the next three years is nearly 100%, and the long-term space is broad. 1) the sales volume of customers with important stamping parts is growing rapidly; 2) the customer is expected to supply global factories from only Chinese factories; 3) the matching value of bicycles has the potential to double; 4) with the increase of welding proportion of stamping parts, there is room for improvement in profitability; 5) strengthen the stamping parts sales team and constantly open up new customers.
2. Power battery box: the volume is expected to be released in the second half of next year, and the follow-up new fixed point can be expected. 1) the project fixed point of the battery box assembly of a certain model of VF has been obtained; 2) the market space is broad, and the domestic power battery box market size is expected to be 300-40 billion yuan in 2025; 3) actively open up new customers of power battery and vehicle factory.
3. Lithium power equipment: Ningbo Jiuju, which is 29% owned by Wuxi Weitang Industrial Investment Co., Ltd., a wholly owned subsidiary of the listed company, is actively developing some new energy equipment.
4. Traditional stamping dies: basic export, for the world's famous auto parts manufacturers, with a compound income growth rate of more than 10% in the next three years. 1) the mold is related to the number of models, and the number of new energy models has increased significantly in recent years; 2) to issue convertible bonds to achieve full-category mold coverage; 3) the freight has risen sharply and the exchange rate appreciation has a greater impact.
Profit forecast and valuation
It is estimated that the company's homing net profit from 2021 to 2023 is 0.5C1.1 / 160 million yuan respectively, with a three-year compound growth rate of 72%. The PE corresponding to 2021-2023 is twice that of 64-31-20, maintaining a "buy" rating.
Risk Tips:
The progress of production expansion of stamping parts is not as expected, the competition pattern is worse and the risk of technology iteration is worse; the newly signed order of battery box is not as expected; the progress of research and development of new energy equipment is not as expected.

The stock has been rated by two agencies in the last 90 days, including one buy rating and one overweight rating; according to the Securities Star valuation analysis tool, the Weitang Industrial (300707) good company has a rating of 2.5 stars, a good price rating of 1.5 stars and a comprehensive valuation rating of 2 stars. (rating range: 1-5 stars, up to 5 stars)