Yunyi Electric(SZ:300304) Shanghai Securities·2024-05-24 03:00Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [16]. Core Viewpoints - The company is a veteran in the automotive electronics industry, with a strong growth trajectory driven by its mature and expanding business segments [45]. - The company has established a leading position in the smart power controller market, with a compound annual growth rate (CAGR) of 23.68% in revenue from 2019 to 2023, and a significant increase in net profit in 2023 [16][31]. - The company is well-positioned to benefit from the ongoing trend of import substitution, particularly in its smart power controller segment, which is expected to see increased market share [41]. Summary by Sections 1. Business Overview - The company specializes in automotive smart core electronic products, including smart power controllers, intelligent wiper systems, precision injection molded products, and sensors [45]. - The smart power controller segment includes rectifiers, regulators, and high-power diodes, which are essential for automotive engine and generator systems [48]. 2. Financial Performance - The company achieved a revenue of 1.671 billion yuan in 2023, representing a year-on-year growth of 42.29% [16]. - The net profit attributable to shareholders reached 305 million yuan in 2023, a remarkable increase of 124.07% compared to the previous year [16][31]. - The gross margin slightly increased to 30.90% in 2023, attributed to improved procurement efficiency and production processes [33][51]. 3. Market Position and Growth - The company has a strong customer base, including major automotive manufacturers such as Ford, General Motors, and BMW, which enhances its market credibility [24][66]. - The growth segment, particularly in intelligent wiper systems and nitrogen oxide sensors, has shown a CAGR of 57.65% from 2020 to 2023, increasing its revenue share from 7.10% to 27.01% [51]. - The company is expanding its overseas market presence, with a CAGR of 46.25% in export revenue from 2020 to 2023 [51]. 4. Technological Advancements - The company has developed key technologies in its product lines, such as high-temperature co-firing ceramics for nitrogen oxide sensors, which positions it favorably in the market [80][84]. - The intelligent wiper system incorporates advanced features like rain sensors and control units, enhancing vehicle safety and user experience [71][74]. 5. Future Projections - Revenue projections for 2024 to 2026 are estimated at 2.273 billion, 3.000 billion, and 3.816 billion yuan, respectively, with corresponding net profits of 419 million, 549 million, and 711 million yuan [41]. - The company is expected to maintain a high growth rate, driven by its solid foundation in mature business and the expansion of its growth segments [41].