Chunfeng Power (603129) Research Report: Focus on consumption upgrade and lead locomotive culture

Chunfeng Power (603129) Research Report: Focus on consumption upgrade and lead locomotive culture

Analyze and deepen the power industry, focus on ATVs and medium and large displacement motorcycle companies. Focus on the development, production and sales of ATVs and motorcycles with engine as the core (60% of revenue in 2018, 31%).Among them: 1) All-terrain vehicle: The product is fully distributed in three market segments: ATV (CForce series), UTV (UForce) and SSV (ZForce), covering 400?
1000cc displacement segment; the company’s all-terrain vehicle products are mainly exported, and the 2019H1 export market share is as high as 75%, leading in the European market share, and the industry leader position is stable; 2) Motorcycles: The products mainly focus on medium and large displacement models with 250cc or more,Covering market segments such as street cars, cruises, motorcycles, and retros, it mainly meets the needs of sports, athletics, and leisure; 2019H1 company’s domestic market share of straddle motorcycles with a displacement of more than 250cc is close to 18%, ranking the top two in the industry.

  All-terrain vehicle: Absolute leader in export and broad market space At present, developed economies such as North America and Europe are the main consumers of all-terrain vehicles. Domestic consumption is gradually at the level of consumption and traffic regulations. All-terrain vehicle consumption is still in its infancy.

  The company is the first domestic and the seventh largest ATV manufacturer in the world. It will export 28,039 ATVs in 2019H1, with an export market share of 75%. It also leads the market in Germany, Britain, Switzerland, Russia and other European countries.Established a sales and finance company in the United States to actively break through the largest market.

The company expects that the global sales of all-terrain vehicles will exceed 1.6 million units in 2020, corresponding to about 100 billion market space. The company’s current global market share is only about 2%, and there is room for improvement.

  Motorcycles: The combination of independent research and development and joint ventures, leading the demand for high-end to benefit from the improvement of consumer consumption levels, and the overall relaxation of bans and motorcycle restrictions, the rise of domestic demand for motorcycle leisure and entertainment, and the rapid growth in sales of motorcycles with large displacement, 2019H1 Sales of straddle-type motorcycles over 250cc increased by 27% year-on-year.

  The company uses medium-to-large displacement water-cooled power as its core technology, and its motorcycle products are positioned at the mid-to-high end, focusing on 250cc, 400cc, and 650cc displacement segments.

In 2014, the company’s self-developed CF650G became a special model for the Chinese Ambassador Guard, showing its technical level and market.

The company has a close relationship with the Dakar rally champion and the old Austrian motorcycle company KTM. In 2014, it used the CKD model Date 200DUKE and 390DUKE two models. In 2017, it established a joint venture company Chunfeng Katemo and completed KTM 1 in 2018.

17% equity acquisition, the joint venture company is expected to date KTM 800cc and other large displacement models, which will further increase the company’s market share in the high-end motorcycle field.

  Investment suggestion: The company’s domestic absolute leaders in the field of all-terrain vehicles are consolidated and consolidated, and business development in the United States and other markets continues to contribute incremental growth; domestic demand for large and medium-displacement motorcycles has just risen, and the penetration rate and the scale of advanced economies in Europe and the United States are vast. The company willThe combination of independent research and development 深圳桑拿网 and joint ventures continues to benefit from the rapid growth of the leisure and entertainment motorcycle market.

  The company’s EPS for 2019-21 is expected to be 1.



70 yuan, the current sustainable corresponding PE is 35.



8x, considering that the company’s entire product line focuses on consumption upgrades and high growth, it gives a PE estimate of 28 times in 2020, corresponding to a target price of 54.

60 yuan, the first coverage given “overweight” rating.

  Risk reminders are banned, tightening the motorcycle restriction policy has reduced the demand for motorcycles, the joint venture company Chunfeng Caterpillar has built capacity, the model date progress is gradually expected, and the Sino-US trade friction has caused the US ATV market to expand less than expected.