KDTECH(002516) 东海证券·2024-07-08 10:00Investment Rating - The report initiates coverage with a "Buy" rating for the company [5] Core Views - The company is a leading domestic supplier of automotive interior fabric materials, with a well-established product layout in the upstream and downstream sectors, including polyester eco-friendly colored fibers and seat covers [3] - The company has been expanding its projects with new energy vehicle manufacturers, optimizing its customer structure, and is expected to see revenue growth from products such as headliners and ultra-fine fabrics [3] - The domestic substitution of ultra-fine materials is driving the penetration of million-level configurations into lower-tier markets, and the company is continuously expanding production to improve its product layout across three major series [4] - The company's eco-synthetic leather business is benefiting from the increasing demand for green and low-carbon materials, with sales revenue steadily growing [19] - The company has invested in Xintouwei, a company focused on RF front-end filters, with its Hefei factory expected to start production soon, potentially boosting the company's investment returns in the medium to long term [20] Financial Projections - The company is expected to achieve net profits attributable to the parent company of 197 million yuan, 211 million yuan, and 229 million yuan in 2024, 2025, and 2026, respectively, representing year-on-year growth of 3%, 7%, and 9% [5] - The corresponding EPS is projected to be 0.13 yuan, 0.14 yuan, and 0.16 yuan, with P/E ratios of 26X, 24X, and 23X based on the closing price on July 8, 2024 [5] Business Segments Automotive Interior Business - The company has a complete industrial chain from colored yarn production to material weaving, maintaining a leading position in the domestic market [57] - The company has successfully transitioned to the synthetic leather business, with sales revenue steadily increasing, and has expanded into ultra-fine products, continuously upgrading its product structure [57] - The company's interior material products include fabric materials, eco-synthetic leather, and ultra-fine suede, which can be applied to various areas of automotive interiors such as seats, door panels, and headliners [57] - The company has production bases in multiple locations across China and R&D centers in Changzhou, Shanghai, North America, and Europe [57] Eco-Synthetic Leather Business - The company's eco-synthetic leather business has been growing steadily, benefiting from the increasing demand for green and low-carbon materials and the expansion of new usage scenarios in the automotive industry [19] - The company introduced eco-synthetic leather products in 2017, and with customers increasing the application of synthetic leather, the company is expected to continue benefiting from the structural changes in interior material demand [19] Ultra-Fine Suede Business - The company's ultra-fine products, including ultra-fine leather and ultra-fine suede, have received project approvals from several OEMs, with some models already in mass production [108] - The company's ultra-fine products are widely used in automotive seats, steering wheels, instrument panels, door panels, and headliners, and can also be applied in fashion design, sports equipment, and smart mobile accessories [108] Xintouwei Project - The company has invested in Xintouwei, which is focused on the RF front-end filter field, with its Hefei factory expected to start production soon [20] - Xintouwei acquired NSD, which has extensive design experience and its own wafer factory production experience, and has been optimizing its IDM model and chip-level and wafer-level packaging processes [146] - The Hefei factory is expected to achieve SAW filter production and small-scale shipments this year, gradually increasing capacity to full production [94] Industry Trends - The domestic substitution of ultra-fine materials is driving the penetration of million-level configurations into lower-tier markets, with domestic brands gaining market share due to their price advantages over traditional overseas products [4] - The demand for green and low-carbon materials in automotive interior CMF design is increasing, with North American electric vehicle manufacturers and overseas brands such as BMW and Kia reducing the use of animal-derived materials [19] - The rise of the domestic new energy vehicle industry is expected to reshape the supply system, with local suppliers benefiting from the restructuring of the supply chain [80]