下载格隆汇APP
下载诊股宝App
下载汇路演APP
社区
会员
机构：中金公司
研究员：Xingyu CHEN/Zhonghai YU/Guanfei WEI
Navinfo announced a new original equipment manufacturer (OEM) order from a Chinese company specializing in smart car full-value-chain R&D (hereinafter referred to as “client A”). Client A, a leading car manufacturer in China, will launch a number of new mass-produced models from September 2022 to September 2027. The models will use Navinfo’s hardware and software integrated Level 2 advanced driver assistance system (ADAS) solutions, whose functions include adaptive cruise control, lane departure warning, and autonomous emergency braking (AEB).
Comments
OEM order proves Navinfo's competitiveness in autonomous driving. In 2021, the firm adjusted its organizational structure and launched the Navinfo autonomous driving solution (ADS) after integrating its long-term accumulation in autonomous driving. The solution provides L1-L2.9 autonomous driving hardware and software solutions in the driving and parking domains. Prior to that, Navinfo had secured orders from Cowin Auto and signed an automated driving-related service agreement with Volvo. It also cooperates with numerous traditional and emerging automakers. We believe the new order from client A proves Navinfo’s competitiveness in autonomous driving.
With substantial accumulation in autonomous driving, Navinfo can provide self-developed hardware and software integrated solutions. The company has engaged in autonomous driving since 2015 and has accumulated much experience in this field. Its full-stack self-developed algorithms for autonomous driving sensing, decision-making, and planning and control can be deeply integrated with high-precision maps to provide vehicles with static traffic planning while working with sensing results to improve the efficiency of autonomous driving systems. With self-developed high-precision maps, data compliance, and autonomous driving controllers, Navinfo’s full-stack engineering capabilities can meet automakers’ need for customized autonomous driving solutions.
Chip capacity shortage may ease in 2022; products such as MCU sustain high growth. In 2021, the firm’s microcontroller (MCU) chips entered mass production with output of nearly 10mn units. Against a shortage of automotive-grade MCU chip supply in 2021, the firm successfully entered the domestic chip supply chain and notably enlarged its chip shipment leveraging its full-stack solutions and rapid response. As for System on Chip (SoC), its AC8015 chip has reported sales volume of over 200,000 units after mass production officially started in 2021, and is equipped on over 20 models through partnership with Desay Group, Capol International & Associates Group, and other tier-1 companies. We believe the firm can enjoy strong bargaining power in capacity in 2022 thanks to its output in 2021. It is solving its capacity problem by meeting the demand of automakers and cooperating with Chinese companies. We expect the firm to maintain rapid growth in MCU chip and SoC shipments in 2022.
Financials and valuation
We are upbeat about smart car demand and the firm’s long-term growth potential. We maintain our earnings forecasts and an OUTPERFORM rating. We adopt a SOTP valuation for 2022, and as the firm is still in a stage that requires continuous investment, we adjust the valuation method of the smart cloud business to P/S valuation and maintain our TP of Rmb17, offering 13.3% upside.
Risks
Intensifying competition in autonomous driving and high-precision map sectors; companies in which Navinfo holds stake continue to suffer losses.