Investment logic and representation of the company

Investment logic

Domestic investment logic: In the case that the products and technologies are not much different from foreign countries, the localization advantages such as price and development cycle are used to cooperate with the competition of downstream OEMs, so as to seize the share and seek breakthroughs.

Breakthrough difficulties: As the core functional components and safety parts of automobiles, the chassis has a long introduction cycle and a high threshold, which needs to stimulate the willingness of OEMs to replace

Brake-by-wire: EHB overseas advantages are outstanding, as the core safety parts of the car domestic cut is easy but difficult to replace, domestic manufacturers are generally used as a secondary supply, the actual market share is not high, the pattern of domestic head manufacturers Bethel and other listed companies is basically determined, in the downstream OEMs continue to compete under the situation, small companies lack the opportunity to enter. The gap between EMB at home and abroad is relatively small and has not yet been mass-produced as a new thing, and the domestic bet is heavier, and there is an opportunity to change lanes and overtake. However, because EMB also has a long introduction cycle and a large threshold for continuous investment in the early stage, listed companies and head startups with good resources and sufficient funds have greater opportunities.

Steer-by-wire: It may be the last piece of the puzzle for intelligent driving, completely changing consumer cognition from user habits such as steering wheel changes and even disappearing, not only facing its own technical and cost dilemmas, but also needs to solve a series of problems such as automatic driving, user acceptance, laws and regulations. The NIO ET9 (equipped with ZF's latest generation SBW, which has completed the new car application catalog of the Ministry of Industry and Information Technology, and has a pre-sale price of 800,000 yuan) launched in 2025 is expected to become the first model in the world's civilian production vehicles to adopt steer-by-wire technology. In the short term, focusing on solving technical problems and testing user acceptance on high-end models may become one of the important selling points of car companies' competition. In the medium term, it will rely on cost reductions to drive market penetration. It is expected that a large market will not be formed in such an investment cycle of 3-5 years, but there is huge room for imagination in the future. OEMs and intelligent chassis solution providers will be the main players, and it will be very difficult for single-business startups to run out.

Intelligent suspension: the domestic head is basically clear, Kong Hui Automobile occupies more than 40% of the share, plus Baolong Technology, Tuopu Group two listed companies, the total installed capacity has reached more than 80%, there is basically no opportunity for domestic substitution, you can pay attention to the air suspension more upstream subdivision track suppliers (such as Kong Hui Automobile suppliers), or there are opportunities for mergers and acquisitions and even listing. The focus can be on the secondary market.

Listed companies

Tuopu Group (601689)

The company is a leading platform-based parts company in China, with a forward-looking layout of electrification and intelligent transformation. After expanding from the main NVH shock absorption system business to eight product lines such as lightweight, thermal management, chassis and intelligent driving, the company's bicycle value has continued to increase, its core customer base has continued to expand, and its performance growth has accelerated. Intelligent cockpit, brake-by-wire IBS and steer-by-wire EPS, air suspension and other projects have been gradually mass-produced. The company's operating income in the first three quarters was 19.352 billion yuan, a year-on-year increase of 36.7%; the net profit attributable to the parent company was 2.234 billion yuan, a year-on-year increase of 39.9%; The current market capitalization is approaching 90 billion.

Zhongding shares(000887)

Zhongding Co., Ltd. started with the traditional seal business, and in the past ten years, it has actively merged and integrated around the construction of the industrial chain, on the one hand, it has consolidated its industry-leading position in the sealing and shock-absorbing rubber of its own base business, and on the other hand, it has been able to expand the three incremental businesses of new energy vehicle air suspension system, thermal management system and chassis lightweight parts, and fully benefit from the rapid penetration of new energy vehicles in the market trend. Zhongding Co., Ltd. entered the intelligent chassis market through the acquisition of German AMK, and was designated for air supply unit assembly and air spring project in 24Q3. 24Q3 achieved revenue of 4.83 billion yuan, +5% year-on-year and -3% month-on-month; net profit attributable to the parent company was 340 million yuan, -3% year-on-year and -6% month-on-month; The market capitalization is about 17 billion.

Baolong Technology(603197)

Since its establishment, Baolong Technology has taken automotive metal pipe fittings, valves, and TPMS as its core business, and gradually stabilized its leading position in the subdivision track through endogenous expansion and epitaxial mergers and acquisitions. In recent years, the company has actively laid out the intelligent driving track, successfully developed a series of products including air suspension, six types of sensors, ADAS systems and other products, and vigorously expanded its own brand customers to open up incremental space. In the third quarter of 2024, it was designated for a number of air suspension assembly projects: 24Q3 achieved revenue of 1.84 billion yuan, +20% year-on-year and +8% month-on-month; The net profit attributable to the parent company was 100 million yuan, -35% year-on-year and +25% month-on-month. The current market value is nearly 10 billion.

Bethel (603596)

The company is a modern high-tech enterprise specializing in the research, development and manufacturing of automotive safety system related products, with independent research and development capabilities and manufacturing capabilities of various brakes, vacuum boosters, ABS, ESP and other products. In the first three quarters, the company's main business income was 6.378 billion yuan, a year-on-year increase of 29.43%, and the net profit attributable to the parent company was 778 million yuan, a year-on-year increase of +30.79%. In terms of products, the sales volume of intelligent electronic control products was 3.34 million sets, a year-on-year increase of 32.53%; the sales volume of disc brakes was 2.27 million sets, a year-on-year increase of 13.70%; The sales volume of lightweight brake parts was 9.66 million pieces, a year-on-year increase of 58.99%. The sales volume of mechanical steering products was 2.06 million sets, a year-on-year increase of 19.86%. The current market capitalization is about 27 billion.

HASCO Automobile(600741)

The company has been deeply involved in the auto parts business for more than 30 years, and its current business covers more than 40 auto parts products, making it a comprehensive auto parts leader in China. In order to adapt to the trend of "New Four Modernizations" of new energy vehicles, the company has started the transformation of "intelligence + lightweight + electrification", in-depth layout of core products including millimeter-wave radar, brake-by-wire, steer-by-wire, etc., and actively layout the core technology of intelligent chassis. The company's operating income in the first three quarters was 119.491 billion yuan, a year-on-year decrease of 1.7%; The net profit attributable to the parent company was 4.473 billion yuan, a year-on-year decrease of 5.6%, and the current market value was more than 50 billion.

The main engine factory invests in the research on behalf of the research

In the fierce transformation competition, OEMs are the most active capital parties in the field of enterprise parts, and they frequently increase their weight up and down the industrial chain. Among them, car manufacturers with relatively weak self-accumulation pay more attention to "investment instead of research", and make significant efforts in industrial chain investment. Taking Xiaomi as an example, there have been many shots in the field of wire-controlled chassis, and investment institutions can also rely on the industrial chain of the main engine factory as an entry point for investment layout.

Tongyu Automobile

Tongyu Automobile was established in 2016 and was incubated by Tongji University. As early as 2012, the core team of Tongyu Automobile began to develop the core technology of wire-controlled chassis, and the current products cover wire-controlled electro-hydraulic braking system, integrated wire-controlled electro-hydraulic braking system, electronic parking brake system, anti-lock braking system, electronic stability control system and other intelligent braking.

|Likrypton Technology

Likr Technology is a leading provider of intelligent chassis system solutions for wire-by-wire. Focusing on the core areas of new energy vehicles and autonomous driving, the company took the lead in launching the world's first mass-produced hydraulic fully decoupled brake-by-wire technology solution DHB-LK® (Decoupled) by relying on the complete development and application capabilities of the chassis-by-wire platform, and taking the difficult brake-by-wire technology as the starting point Hydraulic Booster) and IHB-LK® (Integrated) intelligent braking system integrated with international cutting-edge technology Hydraulic Brake), the product performance has reached the world's leading level, and has been designated by many domestic car companies, among which DHB-LK® products have achieved small-batch mass production in July 2022, and IHB-LK® products have achieved mass production in December 2022.

In the future, Likr Technology will comprehensively deploy brake-by-wire, steer-by-wire, and chassis-by-wire domain controllers, gradually build a complete chassis-by-wire product ecology, and provide safe, efficient and intelligent complete solutions for car companies and industries.

Bibost

Bibost (Shanghai) Automotive Electronics Co., Ltd. is the world's leading supplier of intelligent chassis solutions, with two R&D centers in Shanghai Hongqiao and Beijing Fengtai, and a production base in Nantong, Jiangsu, covering an area of 6,000 square meters in the first phase, with world-class processing production lines, intelligent assembly and testing lines and intelligent chassis product development laboratories, which have passed GB/T 19001, IATF16949 and other quality management system certifications, the annual production capacity of full-stack intelligent brake products exceeds 1.5 million sets.

As an independent and controllable innovative enterprise in the field of drive-by-wire chassis in China, Bibost has brought together more than 20 years of R&D experience and technology accumulation of automotive electronic products from the State Key Laboratory of Automotive Safety and Energy Conservation of Tsinghua University, forming three product matrices of intelligent braking, intelligent steering, domain controller & integrated wire-controlled chassis, and has long been committed to providing technical services such as intelligent chassis core components and chassis domain controllers for the global automotive market.

Kong Hui Automobile

Zhejiang Konghui Automobile Technology Co., Ltd., jointly founded by Mr. Guo Konghui, Guo Chuan, the first academician of the Chinese Academy of Engineering and the first academician of the automotive industry, is located in South Taihu New District, Huzhou City, Zhejiang. The Huzhou base covers an area of 97 acres, with a plant area of 100,000 square meters, which can accommodate a total adult production capacity of 1.8 million sets of air springs. In addition, Konghui Technology has manufacturing bases in Chongqing, Guangzhou and Wuhan, and a general R&D institute in Suzhou. The company is the first enterprise in China to realize the OEM mass production and supply of passenger car air suspension systems.

At present, it has more than 100 invention patents and 900 employees. At present, there are more than 20 models supplied, and it has obtained the qualification of air suspension system or air spring assembly for more than 40 models from 16 car companies, including VOYAH, Ideal, Zeekr, Changan, AVATAR, Aion, Xiaopeng, and Chery.