【Writer / Lai Jiancheng】
Benefiting from the support of electric vehicle policies in various countries, in the third quarter of this year, Tesla, BYD, Ford, Mercedes, etc. all delivered outstanding results. However, Tesla’s stock price has been losing ground. Could it be that the electric vehicle supply chain is bullish? Is it over? Jiancheng doesn’t think so! First of all, the overall auto industry has delayed orders and demand due to chip shortages in the past two years. However, Morgan Stanley has recently made a shocking bomb, saying that Renesas and ON Semiconductor have issued orders to cut orders and decided to cut Q4 orders, showing that there is no shortage of automotive chips. Cargo, TrendForce estimates that global car sales will be about 83.9 million in 2023, an annual increase of 3.7%, to about 91 million in 2025. Although the growth rate is limited, there is still a lot of room for growth in electrification and advanced driving. It is estimated that the global sales of new electric vehicles will reach 38.2 million by 2025, accounting for about 40% of global automobile sales. Therefore, electric vehicle-related components will be Major growth markets for the next ten years.
Tesla stock hits 2-year low
Musk continued to receive a lot of controversy, mainly because after entering Twitter, the market worried about the shift of Musk’s work focus. In addition, in recent months, Tesla has had multiple recalls in the United States, one of which was more than 40,000 vehicles. The recall of cars for the risk of power steering failure, and this time around 321,000 vehicles in the U.S. due to taillight problems, is the latest trouble for Musk. Moreover, the recent escalation of the epidemic situation in China has also caused the market to worry that shipments will be blocked, which will affect its profits, causing the stock price to show a sharp drop, hitting a low since November 20, 2020. As various car manufacturers compete to launch electric vehicles, the days when Tesla is judged to be the dominant force will no longer return, and instead will enter the realm of flourishing. This will be a big benefit for Taiwan-related components, and the MIH alliance created by Hon Hai and Yulon is even more promising. Let Taiwan’s auto industry have the opportunity to attack the world again. Since Hon Hai and Yulon hold 51% and 49% of the shares respectively, Hung Hua Advanced will be listed on the Innovation Board in the next quarter, and electric vehicle orders are enthusiastic, and it will cooperate with the group to make accounts at the end of the year. It is judged that Yulong (2201) will be the leader of the bulls.
With the support of electric vehicles, Yulon will make a big turnaround next year
Yulon was impacted by the claims of Xin’an Tokyo’s epidemic prevention insurance, showing losses for two consecutive quarters, EPS-3.97 yuan in the second quarter, -0.13 yuan in the third quarter, and an accumulated EPS-1.98 yuan in the first three quarters. However, with the new cars of Yuri Automobile and Luzhijie coming on the market before the end of the year, and Yuri Automobile’s investment in China is gradually improving, and Xin’an Tokyo’s losses in the fourth quarter are expected to shrink, and it is judged that the fourth quarter will turn from loss to profit. Looking forward to 2023, in addition to not being dragged down by epidemic prevention insurance, thanks to the performance of Yurong and Yuri Automobile, and Luzhijie’s first pure electric n⁷ will be launched, it is estimated that the annual EPS will be more than 6 yuan. As for Honghua’s advanced themes, its predecessor was “Hua Chuang Electronics”, which was originally a research and development center under the Yulon Group. At the invitation of Hon Hai, Yulon held 49% of Honghua’s shares after pricing Huachuang’s car technology. If Honghua is successfully listed in the future, the potential profit of Yulong will be as high as 70 billion yuan. In line with the group’s accounting theme, in addition to some foreign capital buybacks, investment credit prices have also broken through the neckline since mid-to-late November, and the short-term pull back to the 5-day line can be used for bargain hunting.
Zhending-KY, Hongzhun share price is undervalued
There are quite a lot of MIH members, including Zhending-KY (4958) and Hongzhun (2354) of Hon Hai Group, Delta Electronics (2308), Dongyang (1319), Realtek (2379) and Taiban (5425), among which Zhen Ding-KY’s EPS in the first three quarters has reached 10.04 yuan. With the support of foreign investors, the stock price has also stood above all moving averages. If the 10-day moving average does not break, there is a chance to overcome the 6/1 high of 122 yuan. Once it breaks through, it will start another wave of offensive opportunity. Hongzhun has not made outstanding profits in recent years. The EPS in the first three quarters was only 2.43 yuan, but the net value per share was as high as 72.7 yuan, and the P/B ratio was only 0.68 times. Have the strength to challenge the annual line counter pressure. As for Delta Electric, which has a deep presence in electric vehicles, its stock price has already risen sharply under the corporate card position, and it is about to challenge the 300 yuan mark. Because the EPS reached 9.53 yuan in the first three quarters, it also broke through the downward pressure line of 335 yuan and 302 yuan. , so as long as the upward trajectory is not lost, the possibility of challenging the historical high is not low.
The AM market is booming, focusing on Dongyang, electric vehicle recruits look at Realtek
A few days ago, State Farm, the largest auto insurance company in the United States, will expand the compensation for AM collision parts in December. In addition to operating in Texas and Oklahoma in June this year, it plans to start operations in other 39 states in the United States in December, which will enhance the AM market in North America. Taiwanese manufacturers including Dongyang, Tyvisi, and Dibao are expected to benefit from the purchase of spare parts. Dongyang, which focuses on the AM market, recorded an EPS of RMB 3.06 in the first three quarters. In addition to the North American AM market entering its peak season, China’s OEM spare parts sales are growing, and revenue in the fourth quarter can increase by 5% to 7% quarterly. Dongyang’s AM products account for nearly 70% of the total sales, and OEM accounts for about 30%. AM’s main products include plastic parts, sheet metal parts, car lights, etc., accounting for 70% of the global AM plastic parts market, and 70% of the global AM sheet metal parts market. Accounting for about 35%. After the stock price has been consolidated, it has gradually hit the bottom. Once the head-and-shoulders bottom is completed, there should be room for supplementary growth under the low price-to-earnings ratio. As for Realtek (2379), its EPS in the first three quarters was 27.47 yuan. It has been in the automotive Ethernet market for 8 years and has entered the production chain of international car manufacturers in Europe, the United States, Japan, China, and South Korea. With the accelerated digital transformation of the auto industry and the explosion of business opportunities in electric vehicles and self-driving cars, Realtek’s automotive Ethernet chips are expected to rank among the top three. Recently, foreign investors and investment trust have joined hands to overbuy, and the stock price has also quietly reached the half-line, and it will be supported when it returns to the 10-day line.