The auto parts industry is opening a new situation in the changing situation!
With the growth of global electric vehicle production and sales, the auto parts industry is undergoing rapid changes. CATL, Joyson Electronics, Sanhua Intelligent Control and other companies will all benefit from this change.
And what I would like to mention today is Yinlun shares, which also play an important role in this change.
Yinlun Co., Ltd. is the first leader in the production and sales of heat exchangers in mainland China. The company's core products are thermal management and exhaust gas post-treatment products. It covers many fields such as commercial vehicles, passenger cars, and engines.
Yinlun Co., Ltd. also provides EGR products for natural gas heavy trucks, and is the core supplier of BYD's EGR products, and it is expected that the sales volume of downstream customers will reach 15-200,000 units this year, and the sales volume is expected to reach 30-400,000 units next year.
So, what are the advantages of Yinlun shares to sit firmly in the first leading position?
1. Strong profitability
Yinlun's revenue has grown rapidly, from 5.521 billion yuan in 2019 to 11.02 billion yuan in 2023, with a compound annual growth rate of 18.86%.
The company's net profit increased from 349 million yuan in 2019 to 700 million yuan in 2023, an increase of 100.52%, with a compound annual growth rate of 19.01%. The company's non-net profit in 2023 will be about 581 million yuan, a year-on-year increase of nearly 100%.
The company's gross profit margin and net profit margin have rebounded in recent years, and the net profit margin has changed more obviously. Net profit margin showed an inflection point in 2021 and grew rapidly from 2021 to 2023, increasing from 3.38% to 6.36%, an increase of about 3 percentage points.
The company's net profit margin for the first quarter of 2024 continued its upward trend, reaching 7.1%.
The reason for the continuous growth of the company's net profit margin since 2021 is the adjustment of the business structure (the increase in the proportion of new energy business) and the effective control of expenses.
2. Strong ability to control expenses
Yinlun's period expense ratio has decreased significantly, from 17.82% in 2019 to 13.34% in 2023, a decrease of about 4.5 percentage points. The decrease in expense ratio during the period indicates that the company has strengthened its ability to control expenses.
3. Pay attention to R&D investment, and have many patents
Yinlun Co., Ltd. has six core technologies, which cover the main areas of automotive thermal management system, and the company continues to invest in research and development in these fields, forming a strong technical barrier.
As we can see from the figure below, Yinlun's R&D investment continued to grow from 2019 to 2022, from 220 million yuan to 386 million yuan. The proportion of the company's R&D investment in total revenue is on the rise, increasing from 3.98% in 2019 to 4.55% in 2022, an increase of 0.56 percentage points.
In 2023, the company will apply for a total of 140 new patents.
What's more powerful is that in 2023, the company will obtain a total of 223 projects, and according to customer needs and forecasts, the new projects in the life cycle will increase the company's annual sales revenue by more than 6 billion yuan after they reach production.
So, what are the highlights of the company's future development?
First, the volume and price of thermal management systems have risen, and the market growth potential is huge
In terms of quantity, the company has made efforts in both the supply side and the demand side.
From the supply side, the company's production capacity continues to expand. In February 2023, the Yibin factory in Sichuan Province will be put into operation, with an output of 790,000 pieces of battery water-cooled plates and an estimated sales revenue of 300 million yuan; In 2024, it is expected to achieve an output of 1.5 million pieces of water-cooled plates, and the estimated sales revenue will be 350 million yuan. The Mexico plant and the Poland plant were also completed and put into operation in the second and third quarters of 2023, respectively, providing a production capacity base for the company's global expansion.
In addition, the company has reached in-depth cooperation with well-known domestic and foreign automobile manufacturers, including Tesla, BMW, Audi, BYD, etc., which has laid a solid foundation for the growth of orders on the demand side.
From the price point of view, the thermal management system upgrade will increase the value of the bicycle.
The value of a thermal management system is the total value of a thermal management system in a particular vehicle. At present, the thermal management system is mainly used in three systems, namely the fuel vehicle system, the PTC system and the heat pump system.
The fuel vehicle system is mainly used in traditional fuel vehicles; The PTC system is more common in electric vehicles; The heat pump system is widely used in new energy vehicles.
According to the figure below, in 2023, the unit value of the thermal management system in the fuel vehicle system will be 2,500 yuan, and the unit value in the heat pump system will be as high as 7,200 yuan, which is about three times that of the fuel vehicle system. The rapid expansion of new energy vehicles will promote the upgrading of thermal management systems, thereby increasing the value of single vehicles.
In addition, on July 1, 2023, China VIB emission regulations will be officially implemented, which will be more stringent than China VI A's emission requirements, and will add RDE (actual driving emission test) requirements, which will improve the technical requirements and complexity of after-treatment and further promote the value of bicycles.
The increase in volume and price of the company's thermal management system is expected to continue to promote the improvement of gross profit margin.
In addition, due to the rise in the volume and price of thermal management systems, the new energy vehicle thermal management system market shows great growth potential.
As an important component of the company's revenue, the thermal management business of new energy vehicles will have an important impact on the company's revenue. The data shows that the development prospect of new energy vehicle thermal management system is broad.
First of all, from a domestic point of view, according to estimates, the domestic new energy vehicle thermal management system market size will increase from 22 billion yuan in 2021 to 80 billion yuan in 2025, with a compound annual growth rate of 38.09%.
From a global perspective, it is estimated that the global new energy vehicle thermal management system market will increase from 72 billion yuan in 2021 to 170 billion yuan in 2025, with a compound annual growth rate of 23.96%.
Second, overseas business is expanding
As early as 2001, Yinlun began to lay out foreign markets. According to the data, the company has set up offices in the United Kingdom and the United States, and in 2010, it set up a logistics and after-sales center in Peoria, USA.
As can be seen from the figure below, the company's export revenue has grown rapidly in the past three years. Export revenue increased from 1.46 billion yuan in 2021 to 2.471 billion yuan in 2023, a significant increase of 69.25%, and a compound annual growth rate of 30.09%.
The proportion of export revenue has increased overall, with a slight decrease in 2023. The proportion of export revenue increased from 18.68% in 2021 to 22.42% in 2023, an increase of about 4 percentage points.
Yinlun's active layout in foreign markets and the strategy of rapidly seizing the market will fully benefit it from the expansion of the global new energy vehicle thermal management system market.
The high growth of Yinlun shares has been clear.
The company's inventory revenue can reflect the stability of the company's performance growth. According to the figure below, the proportion of inventory to operating income of Yinlun Co., Ltd. from 2019 to 2023 remains stable, and the fluctuation range remains between 16% and 22%, indicating that the number of inventories has not increased significantly, and there is basically no backlog and unsalable of finished products, which means that the company's performance is stable and is expected to maintain high growth.
Finally, as a leading enterprise in the automotive thermal management industry, Yinlun Co., Ltd. is expected to continue to maintain its leading position and achieve sustainable growth in the future with its strong R&D strength, excellent profitability and continuous expansion of overseas markets.
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