您的浏览器禁用了JavaScript(一种计算机语言,用以实现您与网页的交互),请解除该禁用,或者联系我们。EVA Holdings Auto components’ inflection point has arrived_【发现报告】
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EVA Holdings Auto components’ inflection point has arrived

亿和控股,008382022-05-13-招银国际金***
EVA Holdings Auto components’ inflection point has arrived

CMB International Global Markets | Equity Research | Company Initiation PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG: RESP CMBR <GO> OR http://www.cmbi.com.hk China Auto Sector SHI Ji, CFA (852) 3761 8728 shiji@cmbi.com.hk DOU Wenjing, CFA (852) 6939 4751 douwenjing@cmbi.com.hk Stock Data Mkt Cap (HK$ mn) 2,309 Avg 3 mths t/o (HK$ mn) 23 52w High/Low (HK$) 2.58/0.66 Total Issued Shares (mn) 1,749 Source: Bloomberg Shareholding Structure Zhang Hwo Jie’s Family 44.3% Others 55.7% Source: HKEx Share Performance Absolute Relative 1-mth 7.3% 13.8% 3-mth -11.4% 9.0% 6-mth -43.1% -21.6% Source: Bloomberg 12-mth Price Performance Source: Bloomberg Auditor: PricewaterhouseCoopers 0.00.51.01.52.02.53.02021-052021-082021-112022-022022-05838 HKHSI (rebased)(HK$)BUY (Initiation) Target Price HK$ 3.00 Up/Downside +127.3% Current Price HK$ 1.32 1 12 May 2022 Initiate with BUY. We initiate coverage of EVA Precision Industrial Holdings with a BUY rating and target price of HK$ 3.00. We are of the view that EVA’s penetration into Tesla (TSLA US, NR) and Great Wall Motor (2333 HK, BUY / 601633 CH, BUY) could lift its revenue and margins. We see an inflection point for EVA especially its auto components business, which could be overlooked by investors.  Ride on Tesla’s strong sales growth. EVA has become Tesla’s supplier for its front-seat frames of all the models produced in North America since Jul 2021. We expect EVA’s revenue from Tesla to rise 5x to HK$ 150mn in FY22E and 77% YoY in FY23E amid Tesla’s strong sales growth. We also project gross margin of 50% for such business given less competitive car seat industry landscape in North America. EVA also benefits from Tesla’s strong growth as a tier-2 supplier through Faurecia (EO FP, NR). Despite lower gross margin outlook (about 27% in our assumption), we expect such business to contribute an additional revenue of HK$ 140mn in FY22E (from HK$ 60mn to HK$ 200mn), as Faurecia is the sole supplier of the rear seat assembly for the Model Y in North America, and EVA is the sole supplier for Faurecia in such business.  Another growth driver from Great Wall Motor. Great Wall Motor could become EVA’s largest customer in the auto components segment in FY22E, as its Jingmen plant ramps up. After being stamping components supplier for the P-series pickup trucks and Tank 300 produced in Chongqing, EVA has received more orders from Great Wall, especially from its new plant in Jingmen producing the Tank 500. We project EVA’s revenue from Great Wall to rise 107% YoY to HK$ 600mn in FY22E.  Steady growth for office automation equipment. The exit of foreign makers could bolster EVA’s office automation equipment business, especially for the assembly. We project its segment revenue to rise 15%/20%/6% YoY during FY22-24E and net profit to surge 72%/31%/42% YoY during the same period.  Valuation/Key risks. We use sum-of-the-parts (SOTP) valuation for EVA, as we value HK$ 2.34 per share for its auto components business, based on 20x our FY22E P/E; and HK$ 0.66 per share for its office automation equipment, based on 8.5x our FY22E P/E. Key risks to our rating and target price include lower sales or margins, and more severe production disruption than we expect. Earnings Summary (YE 31 Dec) FY20A FY21A FY22E FY23E FY24E Revenue (HK$ mn) 4,008 5,109 6,353 8,238 9,777 YoY growth (%) 7.0 27.4 24.4 29.7 18.7 Net income (HK$ mn) (15) 155 340 545 787 EPS (HK$) (0.01) 0.09 0.19 0.30 0.43 YoY growth (%) N/A N/A 119.0 60.4 44.4 P/E (x) N/A 14.7 6.8 4.2 3.1 P/B (x) 0.9 0.8 0.7 0.6 0.5 Yield (%) 0.0 2.0 4.4 6.9 9.8 ROE (%) (0.6) 5.7 11.5 16.3 20.2 Net gearing (%) 14.1 17.5 5.9 Net cash Net cash Source: Company data, Bloomberg, CMBIGM estimates EVA Holdings (838 HK) Auto components’ inflection point has arrived 12 May 2022 PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE 2 Contents Focus Charts ............................................................................................ 3 Automotive Components Business........................................................ 4 Car seat components: Set to enjoy high growth as Tesla supplier ..................... 4 Structural stamping components: Great Wall is another driver ........................... 5 Margin improvement amid strong topline growth .................................................. 6 Office Automation Equipment Business ................................................ 8 Exit of foreign makers could bolster EVA’s OA revenue and margins ................ 8 Weihai and Vietnam plants are revenue and margin drivers ................................ 8 Financial Analysis .................................................................................. 10 We project FY22-24E revenue CAGR

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