Is Sanhua Group a family business?

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Three Flowers Intelligent Control: Downstream Outbreak, Financial Stability, Dividend Conscience | Focus on Main Business Company Series

202 1-02-08

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Since 20 15, the company has never stopped paying dividends in cash, with a cumulative dividend of 3.397 billion yuan, accounting for 38.89% of the cumulative net profit.

Author | Little Fish

Process Editor | Xiaobai

The predecessor of Sanhua Zhikong (002050). SZ) is a Sino-Japanese joint venture Sanhua Buerjun Co., Ltd., established in 1994.

200 1 was changed to Sanhua shares as a whole, and was listed on Shenzhen Stock Exchange in 2005. On 20 16, it was renamed Sanhua Zhikong.

The company is a family business, and the actual controllers are Zhang Daocai, Zhang Yabo and Zhang.

By the third quarter of 2020, Sanhua Holding Group, Sanhua Green Energy and Zhang Yabo held 29.78%, 20.68% and 65,438+0.45% of the shares of the company respectively, and they acted in concert.

First, the world's leading refrigeration components

The main products of Sanhua Intelligent Control are refrigeration, air conditioning, refrigerator, automobile air conditioning and thermal management of new energy vehicles, coffee machines, dishwashers and washing machine parts.

At present, the company has become the world's largest refrigeration control component and the world's leading manufacturer of automotive air conditioning and thermal management system control components.

The main products of the company's refrigeration and air conditioning intelligent control parts business are electronic expansion valves, four-way reversing valves, solenoid valves, microchannel heat exchangers, Omega pumps and other products, ranking first in the world, and the market share of cut-off valves, automotive thermal expansion valves and accumulators ranks first in the world.

"Sanhua" brand refrigeration intelligent control module has become a world-famous brand, and its customers include johnson controls, Daikin, Carrier, Gree, Midea and Haier, as well as Tesla, Valeo, Mahler, Volkswagen, Mercedes-Benz, BMW, Volvo, Toyota, General Motors, Geely, BYD and SAIC.

From 2005 to 20 19, the company's revenue increased from 494 million to112.97 million, with a cagr of 25%. The company has customers at home and abroad, and the ratio of overseas income to domestic income is about 1: 1.

At first, the company started from the refrigeration component business of air conditioners and refrigerators. Later, through the acquisition and business restructuring of the group, four major parts were formed, namely, refrigeration business, auto parts business, micro-channel business and Yaweike business, and there were certain synergies among the businesses.

20 13 acquired the German Yawick Group, cut into the business of coffee machine, dishwasher and washing machine parts, and expanded the company's market space in the field of home appliance systems and parts.

20 15 issued shares to purchase Sanhua Micro-channel Heat Exchanger Co., Ltd. of Sanhua Holding Group, which mainly produces heat exchanger components of refrigeration system.

20 17 Sanhua Auto Parts Co., Ltd. (hereinafter referred to as Sanhua Auto Zero) issued shares to purchase Sanhua green energy, expanding the company's refrigeration system to the thermal management system of fuel-fired vehicles and new energy vehicles.

In 20 18, the company's refrigeration business, auto parts business, micro-channel business, yaweike business and other income accounted for 55.0 1%, 13.22%,1.22% and/kloc-0, respectively.

In 20 19, according to mature business and strategic business, the company divided its business into refrigeration and air-conditioning electrical parts business and auto parts business, with revenue accounting for 85.37% and 14.63% respectively.

The company's net profit increased from 45 million in 2005 to 65.438+0.434 billion in 2065.438+09, with a CAGR of 28%.

Judging from the changes of the company's revenue and net profit, the consolidated auto parts business has made the greatest contribution to the company since 20 17. In 20 17, the company's revenue and net profit increased by 42% and 45% respectively.

In addition, the auto parts business is growing faster than the refrigeration and air conditioning electrical parts business. From 20 17 to 20 19, the income of auto parts business was121000 million, 1432 million,1651000 million respectively, and the CAGR was 6544.

In the same period, the revenues of refrigeration and air conditioning electrical components business were 83.7 1 billion, 9.404 billion and 9.604 billion respectively, and CAGR was only 7%.

Business of listed company Du Nan Environment (0020 1 1. SZ) includes refrigeration accessories products, refrigeration equipment products and energy-saving industries. From 20 17 to 20 19, the environmental revenue of Du Nan was 8.279 billion, 9,405,438+0 billion and 9 1.04 respectively.

The main products of Du Nan environmental refrigeration accessories business include four-way valves, stop valves, electronic expansion valves, solenoid valves, pipeline integrated components, liquid reservoirs, heat exchangers and other products. Similar to the products of "refrigeration business+microchannel business" controlled by Sanhua Intelligent, the revenue of refrigeration accessories business is higher, above 60%.

Therefore, Du Nan Environment is chosen as the comparable company of our company.

From 20 15 to 20 19, the R&D investment of Sanhua Intelligent Control increased from 226 million to 532 million, both higher than that of Du Nan, and the CAGR was 24%, higher than that of Du Nan.

Moreover, under the condition of leading R&D investment in the same period, the R&D expense rate of Sanhua Intelligent Control is continuously higher than that of Du Nan. In 20 19, the R&D expense rates of the two companies were 4.7% and 4.2% respectively.

By the end of 20 19, Sanhua Zhikong had obtained 1957 patents at home and abroad, including 9 18 invention patents.

The continuous high investment in R&D enables the company to have the advantages of first-Mover technology and excellent product quality, so as to achieve the advantage of the first or leading global market share of multiple products.

(1) refrigeration business

From 20 13, the company merged into Avico business and WeChat business. By 20 19, the business income of refrigeration and air conditioning electrical accessories has nearly doubled, from 4.930 billion to 9.637 billion.

Among them, the contribution of refrigeration business to tax revenue is absolute. The main products of refrigeration business include cut-off valves for split air conditioners, four-way reversing valves for heating and cooling air conditioners, and electronic expansion valves, which are key components of variable frequency air conditioners. The global market share is relatively leading, and the market leading position is stable.

At the same time, the company's product range has continuously expanded from the field of household air conditioners and refrigerator components to the field of commercial air conditioners and commercial refrigeration, and extended to the direction of frequency conversion control technology and system integration and upgrading.

From 20 13 to 20 18, the company's refrigeration business income increased from 4.264 billion to 7.095 billion, and the CAGR was 1 1%.

The revenue growth rate of the company's refrigeration business mainly depends on the demand of air conditioning terminals. Since July 1 day, 2020, the new air-conditioning energy efficiency standard has been implemented, and the original primary frequency conversion has become secondary energy efficiency, and the original frequency conversion and frequency conversion three-level energy efficiency products will be eliminated.

Moreover, the new energy efficiency stipulates that primary and secondary air conditioners must use electronic expansion valve components, and the sales volume and penetration rate of electronic expansion valves are expected to accelerate in the future. As the absolute leader of electronic expansion valve products, Sanhua Intelligent Control will benefit first.

According to industry online data, in 20 19 years, there were about 60 160000 electronic expansion valves for air conditioners sold in China, and the penetration rate of electronic expansion valves increased from 20 12 years to 39% in 20 19 years.

(Source: Industry Online, Huajin Securities Research Institute)

In order to meet the needs of the industry, the company will issue convertible bonds to raise 3 billion yuan, which was approved on 2002115, mainly used for the construction project with an annual output of 65 million sets of intelligent control components for commercial refrigeration and air conditioning and the technical transformation project with an annual output of 50.5 million sets of high-efficiency and energy-saving refrigeration and air conditioning control components.

The construction project with an annual output of 65 million sets of intelligent control components for commercial refrigeration and air conditioning started on 20 19.

(2) Microchannel service

Established in 2006, Sanhua microchannel heat exchanger Co., Ltd. has been engaged in the design, manufacture and sales of microchannel heat exchangers for refrigeration and air conditioning systems. Its products include microchannel condensers, microchannel evaporators, microchannel heat pump heat exchangers, microchannel water tank heat exchangers and other products.

At present, the company has become a leading enterprise in the global air conditioning microchannel industry, and the market share of microchannel heat exchanger products ranks first in the world.

From 20 15 to 20 18, the company's WeChat business achieved revenue of 899 million,10.76 million,12160,000 respectively, and the CAGR was/kloc-.

Sanhua Microchannel realized non-net profit deduction of10.5 billion,/kloc-0.53 billion and1.respectively in 20 15, 20 16 and 20 17 years.

Compared with the refrigeration accessories products in Du Nan, Sanhua Intelligent Control's "refrigeration business+microchannel business" has a larger capacity. In 20 18, the revenue of Sanhua Intelligent Control "Refrigeration Business+Microchannel Business" was 83 1 1 billion, which was 5.879 billion 1.4 1 billion of Du Nan environment.

Large-scale production capacity gives Sanhua Intelligent Control an advantage in raw material procurement. In 20 18, raw materials accounted for 77% and 70% of the operating costs of Sanhuazhi's controlled cooling business and micro-channel business, respectively, while the data of environmental refrigeration accessories in Du Nan was 82%.

Scale effect, high R&D and the advantages of product technology and quality of casting make the gross profit margin of Sanhua Paper higher, and the gap with Du Nan environment is getting bigger and bigger. In 20 18, the gross profit margin of Sanhuazhi's controlled cooling business and microchannel business were 32.6% and 30.4% respectively, which was about 20 percentage points higher than that of Du Nan environment.

(3) Yavik Business

AVECO Group, acquired by 20 13 Sanhua Zhikong, has been in the leading position in the fields of dishwashers, washing machines and coffee machine water heaters for more than 50 years, and has long been regarded as the first supplier of dishwasher system components development by home appliance customers.

Avico Group's business model is to cooperate with major customers, including BSH, Miller, Whirlpool, Philips, Electrolux, Helbling and other well-known manufacturers, among which the top 10 customers account for about 90% of Avico Group's sales.

Before it was acquired, Yavik Group mainly conducted business in Germany, Austria, Poland, Slovakia, Shanghai and other places.

After the acquisition, Sanhua Zhikong reorganized its business, closed the German factory and transferred its business to the production base in Poland, further transferred some Austrian business to the production bases in Poland and Shanghai, China, and moved the Shanghai factory to Wuhu. At present, Poland and Wuhu are important production bases of Avico business.

From 20 13 to 20 17, the operating income of Yaweike increased from 666 million to12.05 million, and decreased to10.93 million from 20 1093 million. However, due to the current business focus in Europe, the production cost of raw materials and other products is high, and the impact of business adjustment, the gross profit margin level is low.

Moreover, since the acquisition of 20 13, the net profit of Yaweike's business has been hovering at the profit and loss point, and its profitability is poor.

In other words, the Yavik business that contributed more than 10% to the company's revenue did not contribute to the company's net profit, which lowered the company's overall gross profit margin and net interest rate.

At present, the market penetration rate of dishwashers in developed countries in Europe and America is 50%-70%, while that in China is only about 1.3%, which has great development potential. With the increasing popularity of dishwashers in China and the release of production capacity of Wuhu factory, Yavik's business is expected to improve.

(Source: Prospective Industry, Huajin Securities Research Institute)

(4) Auto parts business

Sanhua Auto Zero was established in 2004. Its initial products are mainly thermal expansion valves and accumulators, which are the core components of traditional fuel vehicles, and its market share ranks among the top in the world.

With the rapid development of new energy vehicle industry in recent years, the company actively explores the fields of air conditioning and thermal management of new energy vehicles. The main products include electronic expansion valve, electronic water pump, battery cooler and water cooling plate.

Compared with comparable companies, Sanhua Auto Parts has a complete range of products, covering three categories of parts, such as valves, pumps and heat exchangers, so it has gradually developed from parts to integrated products of parts and subsystems.

At present, the company's products in the field of new energy have been recognized by well-known automobile manufacturers at home and abroad, and have successively obtained orders for new energy platforms such as Daimler, Volvo, BMW, Volkswagen and General Motors. Domestic customers are mainly Geely, Weilai and BYD, and Sanhua Auto Zero is the exclusive supplier of new energy vehicles such as BYD and GM.

In addition, according to the report that Sanhua Zhikong issued shares to buy Sanhua Auto Parts, Sanhua Auto Parts has become an important supplier of Tesla since 20 16, providing parts for Tesla model3 in the field of thermal management.

At present, because the company has signed a confidentiality agreement with Tesla, it will no longer disclose matters related to cooperation with Tesla.

(Source: Panorama Network)

As the core component of automobile air conditioning and thermal management system, the product development of Sanhua Automobile Zero has formed a mode of early collaborative development and high participation with customers in the early stage of customer development projects, so as to design suitable parts solutions for customers. The early participation of R&D ensures the continuity of product order acquisition.

The thermal management system of traditional fuel vehicles mainly includes automobile air conditioning and engine cooling system, while the thermal management system of new energy vehicles mainly consists of air conditioning system, battery thermal management system and motor cooling system.

Compared with traditional fuel vehicles, the thermal management system of new energy vehicles is more complicated. The thermal management system of new energy vehicles accounts for about 8%- 10% of the whole vehicle value, which is about three times that of traditional vehicles.

With the rapid growth of the sales of new energy vehicles of Tesla, BYD and other big customers, the company's auto zero business ushered in a good situation of rising volume and price.

From 20 17 to 20 19, the income of auto parts business was 12 1 billion,143.2 billion,1655438+billion respectively, and the CAGR was/kloc-0.

In the same period, Sanhua Automobile realized zero non-net profit deduction of 65.438+0.78 million, 256 million and 277 million respectively, which fulfilled the performance commitment of Sanhua Green Energy, and the overall completion rate was 654.38+065.438+04%.

From 20 17 to 20 19, the zero gross profit margin of Sanhua Automobile is 30.83%, 29.38% and 30.64% respectively, which is higher than that of comparable company Zhong Ding (000887. SZ) and Yin Lun (002 126. SZ)。

Sanhua Zhikong 20 17 issued shares to buy Sanhua Automobile, and raised13.22 million matching funds for the construction project of new energy automobile parts with an annual output of1/KLOC-0.5 million, the technical transformation project of thermal management system parts of new energy automobile with an annual output of 7.3 million, and the technical transformation project of automobile air conditioning control parts with an annual output of/KLOC-0.27 million.

By the end of the semi-annual report in 2020, the progress of these three projects will be 64%, 49% and 80% respectively, accounting for 40%, 23% and 80% of the fixed assets respectively. With the gradual production of fundraising projects, the company's production capacity has been released, which will support the rapid growth of income.

The second is the improvement of profitability.

From 20 13 to the first half of 2020, the overall gross profit margin of the company showed a slow upward trend, rising from 24.9 1% to 27.8%, and the highest in 20 17 years was 3 1.23%.

From the above analysis, we know that the gross profit margin of different businesses of the company is different. The gross profit margin of refrigeration business and micro-channel business is relatively high, above 30%, and the auto parts business is slightly lower, which is basically consistent with the overall gross profit margin.

However, the gross profit margin of Yaweike's business is low, which lowers the overall gross profit margin, resulting in the overall gross profit margin of the company being basically the same as that of the refrigeration business with the largest revenue share, but lower than that of the refrigeration business.

During the period from 20 13 to the first half of 2020, the company's sales expense ratio and management fee rate (including R&D) were relatively stable, both around 5% and 10%, and the financial expense ratio continued to decline, with the last three periods being negative.

With the increase of gross profit margin and the decrease of financial expense ratio, the company's net interest rate is on the rise, from 6. 13% in 20/kloc-0 to 12.05% in the first half of 2020, and its profitability is greatly improved.

Third, the cash flow situation has improved.

Since its listing in 2005, the company's net operating cash flow has gradually increased, but there are certain fluctuations, mainly due to the fluctuation of raw material prices, which leads to fluctuations in cash for goods and services.

In the same period, the company's cash-to-cash ratio is stable at around 1, while the net cash ratio fluctuates greatly, and its fluctuation trend is basically consistent with the net operating cash flow.

The difference between the net operating cash flow and the company's net profit is mainly determined by the inventory changes caused by the fluctuation of raw material prices and the operating accounts receivable and payable items.

The growth of the company's income depends on the growth of production capacity, so the company's capital expenditure has been relatively large. From 20 1 1 to 20 13, the company found that the net operating cash flow could not cover the capital expenditure, resulting in a negative free cash flow.

However, since 20 14 years, although the capital expenditure has increased substantially, with the substantial increase of the company's net operating cash flow, the free cash flow has continued to be positive and the amount is large, and the cash flow situation has improved significantly.

The continuous capital expenditure is reflected in the asset side, that is, the continuous growth of fixed assets and construction in progress.

Because the company's operating cash flow can basically cover capital expenditure, the company's interest-bearing liabilities are relatively low, and remain below 2 billion before 20 19. The company's asset-liability ratio is also relatively stable, ranging from 35% to 50%, and the interest guarantee multiple fluctuates greatly, reaching a high of 32 times in 20 19.

At the end of the third quarter of 2020, the balance of the company's interest-bearing liabilities was 2.6 billion, up 36% from 20 19. The asset-liability ratio has increased by 3 percentage points to 40%, and the interest guarantee rate has dropped to 28 times, which still has strong solvency.

In addition, the company's 3 billion yuan convertible bonds were approved, and the capital cost was low, indicating that the company's overall debt risk was low.

Since 20 15, the company has never stopped paying dividends in cash, with an accumulated dividend of 3.397 billion yuan, accounting for 38.89% of the accumulated net profit, 92.54% of the accumulated free cash flow and 40.8% of the accumulated investment fund of 8.327 billion yuan, which is worthy of recognition.

label

As the world's largest refrigeration control component company, Sanhua Zhikong has gradually formed four parts: refrigeration business, microchannel business, Yaweike business and auto parts business through acquisition or group reorganization.

At present, except for the acquired German Jarvik business, which has not yet created profits for the company, the other three businesses have performed very well, and many products have the first or leading market share in the world.

The income of the company's air-conditioning refrigerator and auto parts business mainly depends on downstream demand. Faced with the introduction of new energy efficiency standards for air conditioning and the huge demand for the rapid development of new energy automobile industry, Sanhua Zhikong actively expanded its production capacity and its performance was sustainable.

With high R&D investment and scale advantages, the company has high gross profit margin and good profitability. In addition, the company's cash flow situation continues to improve, debt risk is lower, and financial stability is more stable.

Moreover, since listing, it has a conscience of dividends and is a good company.

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Comment 6

There is no doubt about the power.

202 1-02-09 07:39:39

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My nickname is Cao Twelve.

202 1-02-08 20:52:52

(of investors) buy in

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202 1-02-08 18:0 1:0 1

There are three good companies in Xinchang County, Shaoxing City, namely Sanhua Intelligent Control, Xinhecheng and Changjie Drive.