A-share subscription | Zhejiang Huayuan (301535.SZ) opens subscription as a first-tier supplier for automobile manufacturers such as GAC Honda

On March 14, Zhejiang Huayuan (301535.SZ) started its IPO subscription, with an issue price of 4.92 yuan per share and a subscription limit of 12,000 shares. The P/E ratio is 25.91 times, and it belongs to the ChiNext board of the Shenzhen Stock Exchange. Haitong is its exclusive sponsor. According to the prospectus, Zhejiang Huayuan is a high-tech enterprise specializing in the research and development, production, and sales of customized automobile system connecting parts. It is designated as a Zhejiang Province "specialized, refined, new" small and medium-sized enterprise by the Zhejiang Provincial Department of Economy and Information Technology. The company's main products are special-shaped fasteners and seat locks, widely used in automobile body chassis and power systems, automotive safety systems, automotive intelligent electronic systems, automotive interior and exterior decoration systems, including car seats, automotive sensors, new energy power battery packs, and other parts. In the fastener business, the company is a first-tier supplier to major car manufacturers such as Volkswagen China, Guangqi Honda, Changan Mazda, Great Wall Motor, and has established partnerships with global leading automotive component companies like Lear, Magna, Autoliv, Faurecia, and Yanfeng. It is one of the important suppliers of special-shaped fasteners for automobiles in China. It is understood that Zhejiang Huayuan plans to use the capital raised after deducting issuance expenses for the following projects: In the field of new energy vehicles and automotive intelligent electronics, Zhejiang Huayuan, as a second-tier supplier, has entered the supplier system of major domestic new energy vehicle manufacturers such as NIO, XPeng Motors, GAC Aion, BYD, and Ideal Automobile through first-tier suppliers such as Autoliv and Faurecia. Its products are used in models such as NIO ES6, NIO ES8, NIO ET7, GAC Aion S, GAC Aion V, GAC Aion Y, BYD Wangchao series and Ocean series, Ideal ONE, and Ideal L7. In addition, the company has cooperation with global automotive electronics giant Sensata for providing customized sensors, bolts, and other products for its sensors in the automotive intelligent electronics field. Financially, in the years 2021, 2022, and 2023, the company is expected to achieve operating revenues of approximately 454 million yuan, 491 million yuan, and 553 million yuan, respectively. The net profits are expected to be approximately 200 million yuan, 76.8197 million yuan, and 82.6384 million yuan RMB, respectively. It is important to note that the prospectus specifically reminds investors to pay attention to the low market share risk. The company's main products have relatively low market shares. According to estimates, in 2023, the company's fastener sales volume will be approximately 926 million pieces, with a market share of about 0.71% in the national passenger car fastener market; seat lock sales volume will be 11.6848 million pieces, with a market share of about 7.45% in the national passenger car seat lock market.