Changshu Automobile Decoration (603035): Multiple positives pushed up the target price to 25.

6 yuan

Changshu Automobile Decoration (603035): Multiple positives pushed up the target price to 25.

6 yuan

The rapid recovery of investment points downstream is expected to drive the company’s short-term performance growth beyond expectations.

Passenger car industry sales increased by -6 in 19Q3.

0%, -13 from earlier 19Q1.

8% and 19Q2 of -14.

The current 3% narrowed significantly.

Driven by the sales growth of major downstream customers, the company’s performance growth has already started at an inflection point from 19Q3. In November, sales of FAW-Volkswagen, Beijing Benz and Chery Jaguar Land Rover increased by 28% and 22 respectively.

5% and 52.

4%, continued to maintain rapid growth.

Considering that 18Q4 and 19Q1 are the company’s low performance in recent years, the company’s 19Q4 and 20Q1 net profit 南京桑拿网 is expected to achieve rapid growth under the low base effect.

  In the long run, the chairman will not reduce his commitment to enhance market confidence.

The company’s chairman Luo Xiaochun, Wang Weiqing and his wife and Chunqiu held 1 in total.

0.8 billion restricted shares (38% of the company’s total share capital).

49%) was lifted from listing on January 6, 2020.

In order to protect the interests of the majority of small and medium investors, Luo Xiaochun, Wang Weiqing and Chunqiu Company promised not to use anyWays to reduce the holding of the first restricted shares (including new shares resulting from equity distribution, equity accumulation, etc.) during the commitment period, highlighting confidence in the company’s future development prospects and recognition of long-term investment value.

  Accelerating into the 重庆耍耍网 electric intelligent industry chain is expected to enjoy the long-term expected premium.

Judging from the recent CES and major auto shows, smart cockpits have become a key point for major automakers and manufacturers to compete, and the commercialization has accelerated.

The company is the core supplier of “Smart Cockpit” of Weilai Automobile. It includes intelligent cockpit products such as door panels, dashboards, and sub-dashboards, and has excellent interior design integration capabilities.

Taking supporting new car companies as an opportunity, the company is accelerating its entry into the high-quality new energy vehicle industry chain in the Yangtze River Delta region (such as Tesla, SAIC-Volkswagen MEB, Great Wall BMW Project, etc.) to achieve long-term performance growth and estimation under the trend of electric intelligencePremium.

  Investment suggestion: Expect a strong recovery in downstream customers’ production and sales and the company’s long-term layout in the field of electric intelligence. We will raise the company’s EPS forecast for 2019-2021 to zero.

96 yuan, 1.

28 yuan and 1.

61 yuan (the original value is 0.

96 yuan, 1.

26 yuan and 1.

58 yuan), corresponding to PE are 16.

7 times, 12.

5 times and 9.

9 times.

Consolidating the company’s rapid growth in performance, adjustments to pressure to reduce holdings, and the estimated premium of electric smart replacement, we give the company 20 times PE (2020) and raise the target price to 25.

6 yuan, maintain “Buy” rating.

  Risk warning: The downstream customers’ production and sales growth is less than expected; new customer expansion is less than expected; raw material prices fluctuate significantly.