- Buy Entry – 9.4 Target – 10.6 Stop Loss – 8.8
- Nexteer Automotive Group Limited is an investment holding company. The Company through its subsidiaries are primarily engaged in the design and manufacture of steering and driveline systems, advanced driver assistance systems (ADAS) and automated driving (AD) and components for automobile manufacturers and other automotive-related companies. Its operations are in the United States of America (USA), Mexico, Poland and the People’s Republic of China (China). The principal markets for the Company’s products are North America, Europe, South America, China and India. The Company has approximately 27 manufacturing plants, one global technical center, over two regional technical centers, one software service center and approximately 13 customer service centers. Its subsidiaries include Nexteer US Holding I LLC, Rhodes I LLC, Steering Solutions IP Holding Corporation, Chongqing Nexteer Steering Systems Co., Ltd., CNXMotion, LLC and Dongfeng Nexteer Steering Systems (Wuhan) Co., Ltd.
- Ford Motor (F US) reached a 20-year high. The demand for the EV version of the Ford F150 pickup truck, F150 Lightning, is so strong that the company had to stop reservations. The preorder of this pickup model had reached 200,000 units. The CEO mentioned they were pushing full production capacity at 70,000 or 80,000 units for the Lightning. The other auto giant General Motor (GM US) also planned to invest more than US$3 billion to make electric vehicles in its home state of Michigan. North America is the main revenue contribution for Nexteer, accounting for more than 60% of the total annual revenue over the past 5 years. General Motors and Ford are two of the key customers of Nexteer. GM’s EV pickup truck, the electric Chevrolet Silverado, features all of Nexteer’s product lines, including the HO REPS, Ball Spline Axle Halfshaft and steering column. Ford’s F150 Lightning utilises Nexteer’s REPS system with 10-FIT High Availability technology, as well as the power steering column.
Nexteer’s price performance mimicking Ford’s and GM’s movements
- Updated market consensus of the EPS growth in FY22/23 are 52.2%/20.2% YoY respectively, which translates to 11.1x/9.3x forward PE. Current PER is 16.0x. Bloomberg consensus average 12-month target price is HK$12.64.