Xingyu Co., Ltd. (601799): Layout, Incremental Market Opening, Accelerating Growth

Xingyu Co., Ltd. (601799): Layout, Incremental Market Opening, Accelerating Growth

The company established a factory in Serbia to increase the competitiveness of the European market and expand emerging markets.

The release of European production capacity is expected to help the company make new breakthroughs in global platforms such as Mercedes-Benz, BMW, and Audi.

Raise target price to 115 yuan (original 94.

15 yuan), maintaining the company’s “overweight” rating.

The company announced in August 2019 that it plans to invest 60 million euros in the construction of Xingyu Co., Ltd. Serbia. According to our grassroots research, the new project will start in the first quarter of 2020 and is expected to be put into production in 2022. The construction progress slightly exceeds market expectations.

It is expected that the additional production capacity will strengthen the company’s competitiveness in the European market, make breakthroughs in global platforms such as Mercedes-Benz, BMW, and Audi, and bring new growth momentum.

Maintaining the company 2019?
EPS 2 in 2021.

69/3.

28/4.

24 yuan, maintaining the company’s 35 times PE, corresponding to a target price of 115 yuan in 2020 (originally 94.

15 yuan, corresponding to 35 times PE in 2019).

Enhance competitiveness and expand overseas 深圳桑拿网 markets.

The company increased its production capacity in Serbia and started with the European market as a starting point. It is expected that the new plant will have an annual output of 5.7 million lights (including 3 million rear tail lights, 1.7 million small lights, and 100 headlights).Million), the planned production capacity is larger than the company’s domestic Foshan (about 250?
3 million) and Jilin factory (150?
2 million), showing the company’s determination and motivation to enter the European market.

There are sufficient orders in hand, and growth is expected in 2020.

In terms of new models, the new Sagitar Q4 and Magotan will be listed in Q4 in 2019, and the Nissan Xuanyi will be listed in Q1 in 2020. From the perspective of product upgrades, Geely Emgrand and Bolly will be equipped with LED lights in 2020杭州桑拿网. Guangfeng Highlander, Mercedes-Benz GLCWait to start matching taillights.

The sales volume of downstream customers is relatively high. The company’s light source products have been upgraded significantly, and the company will continue to maintain rapid growth.

Catalyst: Passenger car sales are picking up, and the expansion of ADB products is accelerating.

Risk Warning: Sales in the automotive industry decline.