Desay SV(002920) 东吴证券·2024-11-14 02:18Investment Rating - Buy (Maintained) [1] Core Views - The company has successfully captured industry dividends during both the SUV era (pre-2017) and the electrification era (post-2020), leveraging structural changes in downstream automakers and industry trends such as large-screen car cabins and smart driving [2] - The management team has maintained a forward-looking approach, with the current leadership consisting of founding employees and a strategy that includes employee equity incentives to retain core talent [2] - The market's pessimism towards the automotive electronics supply chain is exaggerated, and the company, as an industry leader, is expected to benefit from the broadening capabilities of the supply chain due to E/E architecture upgrades and software-defined trends [2] - The company is well-positioned to capitalize on the growing market space for automotive electronics both domestically and internationally, with significant growth expected in smart cabins and smart driving domain controllers [3] Market Space and Growth Projections - The domestic and international market space for smart cabins (including screen instruments, HUD, and cabin domain controllers) is expected to grow from 119.1 billion/181 billion in 2024 to 200 billion/250.7 billion by 2027 [3] - The market space for low-to-mid-tier smart driving domain controllers in China is projected to increase from 21.8 billion in 2024 to 25.3 billion by 2027, while high-tier smart driving domain controllers are expected to grow from 19.3 billion/3.9 billion in 2024 to 44.2 billion/30.1 billion by 2027 [3] - The integration of cabin and driving functions is anticipated to begin scaling in 2025, with a long-term market space exceeding 10 billion [3] Financial Projections - Revenue is forecasted to grow from 149.33 billion in 2022 to 461.73 billion by 2026, with a compound annual growth rate (CAGR) of 25% [1] - Net profit attributable to the parent company is expected to increase from 1.185 billion in 2022 to 3.963 billion by 2026, with a CAGR of 28.71% [1] - Earnings per share (EPS) is projected to rise from 2.13 yuan in 2022 to 7.14 yuan by 2026 [1] Competitive Advantages - The company has a strong foothold in the automotive electronics supply chain, with a history of adapting to industry shifts and maintaining a competitive edge through strategic management and technological advancements [2] - The company's ability to secure key clients and adapt to the evolving demands of the automotive industry, particularly in the areas of smart cabins and smart driving, positions it as a leader in the sector [2][3] Industry Trends - The automotive industry is transitioning from electrification to intelligence, with the next phase expected to be driven by the penetration of intelligent features [174] - The company is expected to benefit from the "democratization of smart driving," where high-tier smart driving features become accessible to a broader range of vehicles, and from the globalization of automotive electronics, expanding its reach from domestic to global markets [181]