[Industry Frontline] The auto parts sector is 'painting the town red'! Where are the investment opportunities?

$Shenzhen Inovance Technology (300124.SZ)$ As the largest domestic core component provider for new energy vehicles (electric control systems), based on their advantage in motors and electronic controls, the company has vertically integrated reducers and gradually merged OBC, DC/DC, PDU, and other vehicle charging control modules.

The company has sold over 0.12 million units of electric motor controllers in the new energy vehicle sector. As a star stock, institutional attention naturally follows, with Shenzhen Inovance Technology receiving a total of 3,876 visits from 2,381 institutions in the past year.

The recent wave of share repurchases by listed companies has also involved Inovance Technology. On March 18, 2022, the company first repurchased shares through a dedicated securities account for centralized competitive trading. As of April 30, 2022, a total of 2,743,336 shares have been repurchased, accounting for 0.1041% of the total share capital of the company, with a repurchase amount of 0.153 billion yuan and a repurchase price between 48.50 yuan/share to 57.86 yuan/share.

As of May 18, 2022, Inovance Technology's closing price was 58.50 yuan/share, with a total market value of 154.2 billion yuan and a P/E ratio of 53.74.

$Zhuhai Enpower Electric (300681.SZ)$ The main business of Shenzhen Inovance Technology is the research, development, production, and sales of new energy automotive motors, electronic controls, power supplies, and their assemblies. It has two major production bases in Zhuhai and Shandong, making it one of the few leading domestic enterprises with the research and production capabilities of both new energy automotive powertrains and drive assemblies.

In 2021, the company achieved a revenue of 0.64 billion yuan, an increase of 286% year-on-year, mainly contributed by Wuling Hongguang Mini, Geely, and Nio; of which revenue from whole vehicle products was 0.22 billion yuan, accounting for over 50%, an increase of 173% year-on-year.

As of May 18, 2022, Enpower Electric's closing price was 78.62 yuan/share, with a total market value of 6.025 billion yuan and a P/E ratio of 81.66.

$Zhejiang Founder Motor (002196.SZ)$ As a leading enterprise in the domestic new energy drive motor and electric drive system industry, with a comprehensive market share of nearly 7%, the total logistics vehicle assembly market share ranks first in the country. The drive motor products cover a full range of electric vehicles including low-speed vehicles, logistics vehicles, passenger vehicles, and buses.

On April 15, the company stated on the investor interaction platform that the current market share of the company's drive motors is roughly between 10-15%. Based on the company's first quarter performance in drive motor business, it has started to achieve profitability.

As of May 18, 2022, the company's closing price was 8.22 yuan/share, with a total market value of 4.105 billion yuan and a P/E ratio of 172.05.

$Zhongshan Broad-ocean Motor (002249.SZ)$ The "multi-in-one" electric drive assembly products currently mainly consist of "two-in-one" and "three-in-one" electric drive assemblies, with the "two-in-one" electric drive assemblies applied to models such as Great Wall Motor and Renault; while the "three-in-one" electric drive assemblies are used in various models by Changan Automobile, Chery Automobile, achieving stable production and sales. They have successfully tapped into the Indian market, providing mass production support for Tata Motors' pure electric vehicles.

Despite this, currently, the main revenue of Zhongshan Broad-Ocean Motor does not come from the automotive sector. The revenue composition in the 2021 annual report is as follows: the construction and home industry accounts for 55.58%, while the auto parts industry accounts for 38.5%.

Recently, Zhongshan Broad-Ocean Motor has also been busy with repurchasing. On April 30, 2022, the company repurchased 4.9468 million shares, accounting for 0.21% of the total share capital, with a highest price of 6.2 yuan per share, a lowest price of 5.75 yuan per share, and a total transaction amount of 30.0055 million yuan.

As of May 18, 2022, the company's closing price was 5.47 yuan per share, with a total market value of 12.94 billion yuan and a P/E ratio of 220.3.

$Jee Technology (688162.SH)$ Independently developing electric drive, electronic control, and system integration, with a single vehicle value of about 5000-10000 yuan. Broad-Ocean Motor has matched various models from Chery, JAC, Dongfeng Honda, GAC Honda, VINFAST, Jiangling New Energy, and continuously secured orders from new energy entities, ranking among the top ten domestically in terms of shipments.

New orders for electric drive products include NIO, Ideal, Geely, etc. To alleviate capacity pressure and ensure order delivery, the company has planned for the expansion of electric drive technology and production lines, expecting to add 0.5 million sets of electric drives and 5 billion yuan in equipment capacity in the future.

In 2021, the company shipped 0.083 million sets of electric drives (+206%), accounting for 20% of the revenue. With the mass production of new projects, electric drives are expected to continue to be a significant driver of business development.

As of May 18, 2022, the company's closing price was 46.93 yuan per share, with a total market value of 6.429 billion yuan and a P/E ratio of 48.81.

$Wolong Electric Group (600580.SH)$ The motor and control business are the core business of the company. As an enterprise specializing in new energy vehicle drive systems, the products cover a complete product chain including passenger cars, SUVs, commercial vehicles, light, medium, and large buses, with complete products such as drive motors, pure electric traction systems, hybrid power traction systems, and vehicle assembly automation systems.

In terms of pioneering the third-generation nuclear power plant motor project, the company has supplied multiple third-generation nuclear power plants and is actively preparing to participate in newly approved national projects.

As of May 18, 2022, the company's closing price was 12.24 yuan per share, with a total market value of 16.1 billion yuan and a P/E ratio of 20.33.

$Ningbo Xusheng Group (603305.SH)$ Committed to the field of new energy vehicles and automotive lightweighting. The company's main products include precision machined parts of core systems such as new energy vehicle transmission systems, transmission systems, battery systems, and suspension systems.

As of May 18, 2022, the company's closing price was 24.26 yuan per share, with a total market value of 15.18 billion yuan and a P/E ratio of 31.65.
$Huayu Automotive Systems (600741.SH)$ The main business includes component products such as electric drive systems, drive motors and controllers, electric steering systems, electric air conditioning compressors, electronic braking systems, electronic torque managers, electronic pumps, and battery management systems.

The company has a joint venture controlling stake in Huayu Magna Drive Systems Co., Ltd., seizing the development opportunity of electric drive system products. The company's electric drive systems, drive motors, electronic steering gears, electric air conditioning compressors, new energy battery trays, and other products have been designated as matching products for electric vehicle platforms by many complete vehicle customers such as Volkswagen and SAIC Passenger Cars.

Huayu Automotive's main shareholders are predominantly state-owned enterprises. SAIC Group holds the largest stake at 58.32%. However, Huayu Automotive's dependence on SAIC is diminishing. In 2021, nearly half of the main business revenue of Huayu Automotive, 49.2%, came from complete vehicle customers other than SAIC, indicating that almost half of the revenue is no longer contributed by SAIC.

As of May 18, 2022, the company's closing price was $20.47 per share, with a total market value of $64.54 billion and a P/E ratio of 9.45.

$Ningbo Yunsheng (600366.SH)$ The main business is the research and development, manufacturing, and sales of automotive generators and starters. The brushless permanent magnet synchronous motor drive system and the switched reluctance motor drive system technologies are relatively advanced.

As of May 18, 2022, the company's closing price was $29.11 per share, with a total market value of $9.011 billion and a P/E ratio of 30.5.

$Nanjing YueBoo Power System (300742.SZ)$ As a supplier of integrated powertrains for new energy commercial vehicles, the main products are pure electric vehicle powertrain systems, including vehicle control systems, drive motor systems, and automatic transmission systems, mainly used in the field of pure electric passenger vehicles and pure electric logistics vehicles.

As of May 18, 2022, the company's closing price was $28.9 per share, with a total market value of $2.269 billion and a P/E ratio of -34.36.