20161114-三星证券-Auto_Parts__Product-mix_upgrades_needed_during_Autos_1.5_era_81页_5mb

Sector Update Summary: Auto Parts (OVERWEIGHT)

Core Content

This document provides an analysis of the auto parts sector, focusing on the transition from traditional vehicles to fully autonomous electric vehicles (EVs) during the Autos 1.5 and Autos 2.0 eras. It highlights the opportunities and challenges for both traditional automakers and parts suppliers, as well as IT innovators, in this evolving landscape.

Main Points

1. Autos 1.5 and 2.0 Era Overview

• Autos 1.5 Era (2016–2025): A transitional phase where traditional automakers and parts suppliers benefit from the integration of eco-friendly features and ADAS (Advanced Driver Assistance Systems).
• Autos 2.0 Era (2025+): The future of fully autonomous vehicles, where IT innovators and software firms are expected to dominate value creation, while traditional automakers must invest in new ecosystems to remain competitive.

2. Key Technology Requirements for Self-Driving EVs

• AI, Digital Maps, and OS: Essential for autonomous driving.
• Battery Cost and Range: Batteries must be priced below USD100/kWh and offer over 5 miles/kWh range.
• Sensor Integration: Integrated sensors are expected to cost around USD5,000 per vehicle.

3. Market Forecasts

• 2030 Demand Projections:
  • Autonomous vehicles: 15% of global auto demand
  • EVs: 23% of global auto demand
• Global EV Growth: Expected to grow at a CAGR of 14.4% from 6.9 million units in 2020 to 26 million units in 2030.
• ADAS Standardization: Level 2 ADAS is expected to become standard by 2030.

4. Competitive Landscape and Strategy Shifts

• Traditional Automakers: Will benefit from ASP hikes and product-mix upgrades during the Autos 1.5 era.
• IT Innovators: Face execution risks and must integrate with traditional automakers to avoid being left behind.
• Korean Firms: Despite being latecomers, are expected to lead through strategic shifts and R&D investments.

Key Companies and Their Prospects

1. Hyundai Mobis (012330 KS)

• Target Price: KRW350,000 (42.9% upside)
• Growth Outlook:
  • Green car and electronic parts sales expected to grow at 38% CAGR through 2020.
  • Green vehicle/ADAS sales to reach 9% of module sales by 2020.
• R&D Investment: Helps differentiate earnings and reduce cost-to-sales ratio.
• Market Position: Leading parts supplier with diversified sales and strong aftermarket presence.

2. Mando (204320 KS)

• Target Price: KRW350,000 (51.5% upside)
• Growth Outlook:
  • ADAS portion of sales expected to reach 18% by 2020.
  • Green vehicle parts sales to grow at 59.2% CAGR through 2020.
• Strategic Partnerships: Collaborates with GM and Geely, leveraging their growth strategies in autonomous and EV markets.

3. Hanon Systems (018880 KS)

• Target Price: KRW14,000 (34.6% upside)
• Growth Outlook:
  • Green car-related sales to reach 10% of total sales by 2020.
  • Focus on thermal management systems and heat pumps.
• Market Position: Diversified sales with strong ties to HMC and Kia, and expanding into EV-related components.

4. Hyundai Wia (011210 KS)

• Target Price: KRW90,000 (27.1% upside)
• Growth Outlook:
  • Needs to shift product portfolio away from ICE components toward EV and self-driving parts.
  • Likely to face challenges as demand for ICE parts declines and EV parts grow.

5. S&T Motiv (064960 KS)

• Target Price: KRW50,000 (26.6% upside)
• Growth Outlook: Expected to benefit from the shift toward eco-friendly and autonomous vehicles.

Strategic Recommendations

• Focus on Execution: As the roadmap for self-driving EVs becomes clearer, market watchers should prioritize the execution capabilities of firms.
• Moderate Anticipation for Second-Tier Vendors: Companies focused on stand-alone parts may see shipment growth disappoint once technologies are integrated and prices fall.
• Invest in Ecosystems: Traditional automakers must invest in AI, OS, and software to remain competitive in the Autos 2.0 era.
• Leverage R&D and M&A: Companies like Hyundai Mobis and Mando are using R&D and M&A to strengthen their positions in the new vehicle ecosystem.

Conclusion

The transition to self-driving EVs will bring significant changes to the auto parts industry. Traditional manufacturers are expected to benefit during the Autos 1.5 era through product-mix upgrades and increased ASPs. However, to thrive in the Autos 2.0 era, they must invest heavily in emerging technologies and integrate with broader ecosystems. Korean firms, in particular, have the potential to lead if they adapt quickly and effectively.