Invested 2 billion yuan to set up a new company top Group “bet” skateboard chassis track

2022-08-31 0 By

After the layout of a series of lightweight chassis expansion action, Ningbo Top Group Co., LTD. (hereinafter referred to as “Top Group”, 601689.SH) once again moved into the bureau skateboard chassis track.According to the announcement of Top Group, top Skateboard Chassis (Ningbo) Co., LTD. (tentative name), a wholly-owned subsidiary, is to be set up in Hangzhou Bay New Area of Ningbo city with a registered capital of 2 billion YUAN.As for the purpose of establishing the company and investing in foreign countries, Top group said, “Using the skateboard chassis can quickly create differentiated models, thus reducing the development cost of car companies and shortening the development cycle.”It is understood that as one of the few companies that master automotive chassis lightweight technology, Top Group has gained a lot in the market dividend of the rapid development of the automotive industry, but it is also facing the bottleneck of production capacity, and urgently needs to expand the capacity reserve of lightweight chassis to ensure the ability to undertake orders.On February 18, in response to the comments of China Securities Regulatory Commission, Top group said that at present, the company’s production capacity of lightweight chassis system modules (including subframe, suspension system, steering knuckler) will be about 1.8 million sets in 2020, with a capacity utilization rate of about 92.75%.From January to September 2021, the production capacity is about 1.85 million sets, and the capacity utilization rate is about 95.49%.In addition, as a “Tesla concept stock”, Top Group has attracted much attention for taking advantage of the “wind wind” of new energy vehicles, especially tesla’s rapid development.Relevant data show that in 2021, Top Group’s revenue from Tesla is expected to be 2.6 billion yuan, accounting for 30% of the revenue.As for the production capacity layout plan of skateboard chassis, the reporter of China Business News wrote to Top Group. The relevant person in charge said that it was not convenient to be interviewed at present, and relevant information should be subject to the annual report and announcement.Top Group, headquartered in Ningbo, Zhejiang province, has been committed to the research and development, production and sales of automotive shock absorbers, interior function parts, chassis systems and intelligent brake systems, and is a well-known auto parts manufacturer in China.In recent years, the company continues to improve lightweight chassis system module products, lightweight chassis business is becoming an important engine for the company’s performance to maintain rapid growth.At present, Top group is actively promoting the “2+3” industry layout, namely NVH shock absorber system, vehicle acoustic suite, lightweight chassis system, thermal management system, intelligent driving system.In terms of production capacity layout, the company proposed to accelerate the construction of Xiangtan base, Ningbo Hangzhou Bay New Area base and Ningbo Yinzhou District production base to meet the rapidly growing demand for orders.The skateboard chassis field, in which Top Group invested heavily this time, also has a good market prospect.It is understood that the skateboard chassis can integrate the battery, electric transmission system, suspension and brake components on the chassis, to achieve the separation of the body and chassis, so as to quickly create differentiated vehicles for McLe-powered enterprises.This also means that the skateboard chassis can be turned into a fully functional integrated module, with oems customizing the body to further speed up product launches.In addition, compared with the traditional vehicle construction architecture, the skateboard chassis can realize the purpose of reducing the vehicle construction threshold and improving efficiency.According to the announcement, Top has a rich product line of suspension systems, drive-by-wire braking and steering, and chassis tuning capabilities, as well as cooperation experience with RIVIAN on skateboard chassis, and has all the necessary elements to integrate skateboard chassis and drive-by-wire chassis.Top group has set up a new factory in Hangzhou Bay New Area to integrate the above modules into the same platform, so as to provide the best performance, quality and cost of skateboard chassis products for surrounding and overseas customers in the future.In fact, Top has previously partnered with RIVIAN in skateboard chassis, providing it with lightweight chassis systems, including sub-frames, control arms, steering knuckles and other products, with a combined value of about 11,000 yuan per bike.According to the relevant person in charge of Top Group, it is expected that the skateboard chassis project can be put into production formally in two years, and the project may be implemented in Hangzhou Bay New Area, or other production bases in China.It is understood that as early as 2002, GENERAL Motors proposed the skateboard chassis concept, but did not achieve mass production.With RIVIAN’s landing on the NASDAQ market in the United States, the concept of skateboard chassis was on the forefront, and RIVIAN was once pursued by all kinds of capital.Zhang Xiang, a researcher at the Automotive Industry Innovation Research Center of North China University of Technology, pointed out that with the development of skateboard chassis technology, it is even possible for car companies to completely outsource chassis research and development, with less capital and a shorter period of time to produce new cars.”For car companies, the skateboard chassis technology can not only be used by themselves, but also shared with other car companies to increase the procurement of parts and reduce production costs.”In addition to betting on the skateboard chassis track, Top Group has also made great efforts to lay out lightweight chassis technology, and to take a ride on tesla’s rapid development.In August 2016, Top announced that it has officially become a supplier to Tesla, authorized to provide lightweight aluminum chassis components to Tesla.Since then, top’s lightweight business has flourished.According to the annual report of Top Group, the company achieved revenue of 5.09 billion yuan in 2017, of which 2.22 billion yuan was shock absorbing parts business, accounting for 45.8%;Interior functional parts business achieved revenue of 2.3 billion yuan, accounting for 45.2%; chassis system business was 364 million yuan, accounting for 7.2%;The business of intelligent brake system was 110 million yuan, accounting for 1.9%.According to the 2021 semi-annual report, Top Group achieved revenue of 4.92 billion yuan, including shock absorbing parts business, interior function parts business and chassis system business revenue of 1.7 billion yuan, 1.53 billion yuan and 890 million yuan respectively.In other words, chassis business with lightweight products accounted for 18% of the revenue, and the company’s product mix has been further optimized.On the other hand, due to the increasingly strict carbon emission standards, the pursuit of automotive lightweight has become a consistent goal of the global automotive industry.According to relevant data, every 10% reduction in the weight of a car can reduce its fuel consumption by 6% to 8%. If the traditional steel parts of a car are replaced by lightweight materials, the weight of the car body and chassis can be reduced to 50%, and the corresponding carbon emissions will also be reduced.Qi Haizhen, president of Beijing Teyi Sunshine New Energy pointed out: “The acceleration of new energy vehicles, the weight of the power battery ratio is too large will be higher for the lightweight requirements of the vehicle, lightweight body, frame and other products demand is also increasing.With the improvement of the technological level, the chassis lightweight system market is very promising, especially to help improve the range of new energy vehicles.”In the face of the growing market demand, Top group is also continuing to increase in the field of lightweight chassis.In February 2021, the company raised 1.978 billion yuan in net capital through private placement to increase the weight chassis system business.By the end of September 2021, the company has invested a total of 1.024 billion yuan in the project “Automotive Lightweight Chassis System Project”, and temporarily supplemented the working capital of 400 million yuan.In November 2021, Top Group made another effort to publicly issue RMB 2.5 billion convertible bonds, and all the raised funds will be invested in the annual output of 1.5 million sets of lightweight chassis system construction project and annual output of 3.3 million sets of lightweight chassis system construction project.This is also closely related to the capacity bottlenecks facing The Tep Group.According to the announcement of the company replying to the feedback of China Securities Regulatory Commission, from January to September 2021, the production capacity of the company’s lightweight chassis system module is about 1.85 million sets, and the capacity utilization rate is about 95.49%.”The current capacity is basically saturated, and the existing production line can no longer meet the rapidly growing market demand. It is urgent to break through the bottleneck of production capacity and keep up with the development trend of the industry.”Top group believes that under the global trend of “carbon neutrality”, automotive lightweight has become the development goal of the industry.”In order to enable the company to have enough production capacity, support oems and successfully land new orders, the company urgently needs to continue to expand production capacity in the field of lightweight chassis to meet the strong demand of the future market.”Get rid of dependence according to top Group recently disclosed performance forecast, the company is expected to 2021 net profit of 1.05 billion to 1.15 billion yuan, year-on-year growth of 67% to 83%.On the main reason for the increase, the company said:”Thanks to the company to grasp the market opportunity of new energy vehicles industry, expanding the intelligent electric related product line, actively expand domestic and international intelligent electric customer base, relying on the system research and development and modular supply ability innovative business model, such as bicycle supply amount is improved, therefore, new energy automotive business is growing rapidly.”However, while enjoying the development dividend of the new energy vehicle market, Top Group’s performance in gross margin and other aspects as well as the previous involvement in the Tesla storm also caused market attention.On the one hand, top Group’s gross margin declined year by year while its revenue increased substantially.From 2017 to 2020, Top group’s gross margins were 29.03%, 26.89%, 26.29% and 22.69%, respectively.The chassis systems business accounted for an increasing percentage of revenue, while the gross margin fell from 22.21% in 2017 to 15.27% in 2020.On the other hand, top group’s high customer concentration has also attracted the attention of regulators.According to the inquiry letter, during the reporting period (from 2018 to 2020 and from January to September 2021), the sales revenue of top five customers accounted for 65.71%, 58.45%, 62.18% and 68.60% of the company’s operating revenue respectively, indicating a high degree of customer concentration.Companies are also required to state whether high customer concentration is industry practice, whether there is a significant reliance on major customers, and whether there is a risk of being replaced at any time.In its response to the SFC’s comments on February 18, Top said that the company’s high customer concentration is in line with industry practice, there is no significant dependence on customers, no special interest arrangements or relationships with the top five customers, and no risk of being replaced at any time.According to the information disclosed by Top Group, top group’s main customers include A Customer, Geely Automobile, SAIC-GM, Chrysler, BYD and other well-known vehicle manufacturers at home and abroad.And “CUSTOMER A” may be Top’s main partner Tesla.Data from Tianfeng Securities Research report show that in 2020, Top Group’s revenue from Tesla was 1.1 billion yuan, accounting for 18% of the revenue;In 2021, Top group’s revenue from Tesla is expected to be 2.6 billion yuan, accounting for about 30% of the total revenue.Previously, due to the impact of Tesla recall, Top Group’s share price continued to fall, in three consecutive trading days closing price decline deviation of 20%.As for the specific reasons related to tesla’s recalled products, Top Group said that the main reason was that some products were not completely immersed by quenching liquid due to insufficient water level of the quenching tank in a heat treatment production line, resulting in the strength of the steering knuckle may not meet the design requirements.In this regard, some market insiders believe that top Group’s heavy investment in skateboard chassis track may be to further strengthen cooperation with RIVIAN in skateboard chassis field, expand new business areas and customers, and reduce over-dependence on Tesla.(Edited by Zhang Jiazhen and proofread by Yan Jingning)