20220721-西牛证券-英恒科技-01760.HK-Riding_the_trend_of_NEV___ADAS_9页_311kb

Intron (01760.HK) Summary

Core Content

Intron (01760.HK) is a Chinese automotive electronics solutions provider that is positioned to benefit from the growing trends in New Energy Vehicles (NEV) and Advanced Driver Assistance Systems (ADAS). The report highlights the company's potential for growth, supported by favorable government policies, improving market conditions, and the increasing adoption of NEV and ADAS technologies.

Main Views

• Positive Outlook on NEV & ADAS Trends: Intron is expected to benefit significantly from the long-term growth of NEV and ADAS adoption. The government's support for NEVs, including tax cuts and purchase subsidies, is anticipated to drive a stronger recovery in the automotive market in the second half of 2022.

• Sales Recovery: Despite a 12.8% YoY decline in PV retail sales for the first five months of 2022, there was a noticeable recovery in May due to reduced pandemic restrictions and improved logistics. The report suggests that the automotive market will rebound further in 2022 H2.

• Market Penetration of NEVs: The penetration rate of new energy vehicles in China reached 23.4% for the first five months of 2022, with the number of new registrations increasing significantly. The ownership of NEVs reached approximately 10 million, representing 3.2% of the total automobile ownership.

• Supply Chain Stability: The company's long-term relationships with suppliers have helped it manage the impact of supply shortages. Although semiconductor supply remains tight, the Group does not expect further deterioration in delivery schedules.

• Dividend and Financial Performance: Intron declared a record high dividend of HKD 0.068 per share in early July. Its financial performance for FY 2021 showed strong revenue growth of 59.4% to RMB 3,176.2 million, with an increase in gross margin and net profit.

Key Information

Stock Rating and Target Price

• Stock Rating: BUY
• Target Price (TP): HK$ 7.76
• Current Price: HK$ 6.55
• 52-Week Range: HK$ 2.52 – 7.03
• Market Cap (HKD, bn): HK$ 7.1

Financial Highlights

Performance

Key End Customers

• BYD
• GAC Aion
• XPeng
• Li Auto
• Nio

Business Strategy

• Intron provides a wide range of automotive electronics solutions, including BMS, MCU, VCU, DC-DC converters, battery power inverters, and SIAPM Modules.
• The company is well-positioned to benefit from the growing adoption of NEVs and ADAS, particularly from traditional auto manufacturers with lower market share.

Risk Factors

• Slower-than-expected NEV penetration
• Regulatory delays in ADAS adoption
• Chip supply shortages
• Economic downturn and pandemic-related demand suppression

Conclusion

Intron (01760.HK) is well-positioned to benefit from the long-term growth of NEV and ADAS adoption in China. Despite short-term economic and pandemic-related challenges, the company's strategic positioning and strong relationships with suppliers support its ability to navigate the current market conditions. The report recommends a "BUY" rating with a target price of HK$ 7.76, reflecting confidence in the company's future growth potential.