Rimage (603730): Steady Growth of Leading Categories in Segments

    Rimage (603730): Steady Growth of Leading Categories in Segments

    Invisible champion in the field of sun visor segmentation, category and customer expansion Zhang Wenjian Growth Company is a leader in the automotive sun visor industry, with excellent customer structure and higher profitability, which proves that it has excellent product quality, cost control and customer response capabilities.

    In 2019, the company’s global market share in the field of sun visors exceeds 30%, and the domestic market share exceeds 20%.

    The company’s main customers are mainly mid-to-high-end brands, and they have entered the mainstream supply chains of GM, Volkswagen, Ford, Chrysler, Mercedes-Benz, BMW, Toyota, Honda and other major manufacturers.

    In the first three quarters of 2019, under the drag of Motus, the company achieved a net profit margin of 12.

    6%, ROE18%, profitability is still better.

    We expect the company’s EPS to be 1 in 2019-21.

    68, 1.

    97, 2.

    31 yuan, maintaining the “overweight” level.

    Motus integration has accelerated, and the impact of tariff increases has weakened. Q3 of 19 may be the inflection point of net interest rate in 2017. The company’s gross profit rate was 37%, net interest rate was 18%, and ROE was 20%.

    After the acquisition of Motus in 2018, the company’s gross profit margin was dragged back to 29%, and net interest rate and ROE replaced 13% and 17%.

    In Q3 2019, the company’s gross profit margin rose to 32.

    2%, ten years +3.

    7pct, +3 from the previous quarter.

    5pct, net profit margin increased to 14.

    2%.

    We believe that the reasons for the improvement of the company’s gross profit margin are as follows: 1. The US dollar appreciates, the company’s revenue grows faster than costs, and the gross profit margin increases; 2. Q3, the Motus merger has progressed and the gross profit margin has increased;Growth rate of server business.

    We believe that in 20-21 years, the performance will be improved through the integration of Motus. After the company’s transfer of production capacity to Mexico, the integration is completed. The impact of tariffs imposed by the United States will weaken, and the company’s net interest rate is expected to gradually improve.

    Customer Expansion: Persistent development of Japanese visor market penetration The company’s sun visor business accounts for a relatively high proportion in American and German cars, and Japanese has always accounted for a relatively small number, but in 2019 the company won Guangfeng and Guangben fixed points.We believe that the company has broken through Japanese customers and the city share is expected to further increase in the future.

    We expect that the global market share of the company’s sun visor is expected to reach 40%?
    50%.

    In addition, the company is also a supplier of new car manufacturing forces such as Tesla, which will also benefit from the rising sales of Tesla in the future.

    Increasing categories: Headrest and ceiling business are working hard to replicate the success path of sun visors. We believe that the company’s main growth point is still the increase in categories.

    With strong cash flow and the development of stable sun visors, the company actively expanded its headrest and ceiling business.

    According to a company survey, the ASP of a bicycle with a sun visor is about 60 yuan, and the ASP of a bicycle with a headrest can reach 180?
    About 200 yuan, ASP300 ceiling bike?
    700 yuan.

    At present, the company’s headrest business has entered the general supply chain. We expect the company to gradually penetrate the headrest and ceiling business into the supply chain of existing customers such as Ford to support the company’s long-term development.

    Invisible champion in segmentation, maintaining “overweight” rating. The company takes sun visor business as its core business, and penetrates headrest and ceiling controller and other businesses, 北京夜网 and its products are continuously diversified.

    The company strives to continuously increase its domestic market share, and outbound mergers and acquisitions further expand the international market.

    We believe that the company’s overseas business integration can be successful and the company’s profitability can be improved.

    We expect the company’s net profit attributable to its parent to be approximately 6 in 2019-21.

    72, 7.

    90, 9.

    2.4 billion (up 1).

    8%, 2.

    2%, 2.

    2%), EPS are about 1.

    68, 1.

    97, 2.

    31 yuan, the average valuation of comparable companies in the industry in 2020 is about 19 XPE, giving the company 18 in 2020?
    19 times PE estimates, the target price range is adjusted to 35.
    46?
    37.

    43 yuan, maintaining the “overweight” level.

    Risk warning: Sino-U.S. Trade frictions expand, and company’s overseas market expansion is less than expected

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