[주린이종목공부] 애플전기차파트너는? LG전자인가?

 

오늘 기아차가 애플차의 파트너가 될 수 있다는 기대감에 폭등했다고하는데요.
과연 애플전기차의 파트너는 누가될까요? 지금 LG전자에 관심을 가지고있는데요.
오늘도 LG전자가 올랐지만 내일들어가면 고점이 아닐지 주린이는 고민이 되네요. 

아래의 영문기사 보면 '마그나'라는 회사가 애플카의 파트너가 될 수 있는데 이미 '마그나'는 LG전자와 파트너십을 맺었다! 

[스톡+ 데일리 픽] 오늘(19일)의 추천주는 SK·LG전자

 

LG전자, ‘최고 기록’ 다시 썼다... 역대급 실적, 코로나 뚫어 - 이코노믹리뷰

 

▼ 지난해 12월 23일 LG전자는 세계 3위 자동차 부품 기업인 마그나 인터내셔널(Magna International Inc)과 함께 전기자동차 파워트레인(동력전달장치) 분야 합작법인 ‘엘지 마그나 이파워트레인(LG Magna e-Powertrain Co.,Ltd, 가칭)’을 설립한다고 밝혔다. 이러한 행보는 친환경 자동차 배터리 사업을 전개하고 있는 LG화학과의 시너지를 기대하게 하며 현재 첨단산업계의 새로운 대세로 떠오르고 있는 전기차 시장에서의 입지 구축으로 이어질 수 있을 것이라는 기대를 받고 있다. 출처 : 이코노믹리뷰(https://www.econovill.com)

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Magna International Stock Needs A Bigger Catalyst

Jan. 17, 2021 11:51 AM ETMagna International Inc. (MGA)AAPL, ADBE, AXL...12 Comments5 Likes

Summary

• Lately, there has been a lot of speculation that Apple will be launching an electric car.
• If Apple did release a car, Magna International could become a partner in parts and manufacturing.
• Magna has already partnered with LG on EV car parts.
• In this article, I make the case that an Apple car would be the perfect catalyst for Magna International--but that the stock is of poor quality otherwise.

Lately, there has been considerable speculation about a future electric vehicle (EV) launch by Apple Inc. (AAPL).

After Tesla's (TSLA) success in EVs, many companies are scrambling to get a piece of the pie. Apple is seen by many as a natural entrant to the market, as it has massive engineering resources and has been accumulating EV patents for years.

The question is: "who will manufacture and supply parts for the venture?" Apple generally outsources its manufacturing, and car manufacturing requires specialized expertise the company won't be able to quickly develop on its own.

This is where Magna International (MGA) comes into the picture. Magna is a car parts and car manufacturing company that's already heavily involved in the EV industry. After forming a Joint Venture with LG Electronics (KRX:003550) to make electric car parts, MGA already has a foot in the door.

Now, rumors are swirling that Magna will be the manufacturing partner of choice on Apple's rumored electric car. According to Evercore ISI analyst Chris McNally, Magna Steyr is the natural choice to build any potential car Apple produces. With one foot in the EV door and a confirmed interest in working with Apple, MGA does look like a good choice.

In this article, I'll develop the thesis that an Apple car partnership could be the catalyst that takes Magna International to new heights. Without actively endorsing the stock as it stands now, I make the case that if the catalyst materialized, the stock would be a buy at that point. To understand why that's the case, we first need to look at the competitive scene Magna International faces.

Competition

Car manufacturing is a competitive industry, and Magna international has many rivals. Car brands are free to choose from manufacturing partners all around the world, and the options are extensive.

Magna's competitors include:

• Linamar (TSX:LNR): parts.
• American Axle & Manufacturing (AXL): parts.
• Lear Corporation (LEA): seating systems.
• AM General: contract car manufacturing.
• Hyundai (OTCPK:HYMLF): contract car manufacturing.

This is just a small sampling of the competitors in Magna's verticals. There are many companies supplying auto parts that compete with Magna itself, and many contract manufacturers that compete with its German subsidiary, Magna Steyr. It's a competitive industry that doesn't really have amazing growth prospects or profitability.

However, EV changes the conversation on that entirely. EV is a ridiculously fast growing industry, with Deloitte forecasting 29% annualized growth over the next 10 years. If Magna gets a contract with Apple, then that will be a game-changer. In fact, its existing contract with LG already changed the game, with MGA stock shooting up 14% the week it was announced. It makes sense for investors to view the Magna/LG venture positively, since it positions MGA in the high-growth EV industry. However, a deal with Apple would be on a whole other level entirely.

Will Magna be Chosen?

It's abundantly clear that Magna wants to supply parts for, or manufacture, an Apple car. What's not clear is that such a car is being produced, and whether Magna will be chosen to build it.

So far, it's quite clear that Apple is working on some kind of electric car project. This can be inferred from a few facts that point clearly in that direction:

• Apple is accumulating electric car patents.
• It is confirmed to have a car project codenamed "Project Titan."
• It has hired Tesla engineer Doug Field.
• It has been testing electric vehicles on California roads.

Taken together, these facts all suggest that Apple is working on electric cars. But they don't confirm that the company is working on a physical electric vehicle. A car "project" could be anything from self-driving car software to a car "operating system." The fact that Apple is working on something in this realm, doesn't mean it's getting ready to launch an actual, physical vehicle. In fact, the car testing Apple conducted used leased Lexus SUVs--so they were probably just testing software.

None of this means that Apple isn't building an electric car. But it does mean that there's no guarantee. "Project Titan" could very well be a software project for all we know. And if that's the case then there'll be no need for a manufacturing partner.

On top of that, there's the question of whether Magna actually would get a contract with Apple to build its car. Most likely, Apple would seek the help of an external manufacturer. It doesn't do much manufacturing in-house these days, and somebody else could do it cheaper. But recall the "competition" section of this article. There are plenty of contract car manufacturers out there, and some appear to be closer to the punch than Magna is. Hyundai (OTCPK:HYMLF), for example, has claimed that it is already in talks with Apple on a partnership. On top of that, Foxconn recently launched an auto manufacturing arm--and already has a relationship with Apple.

Growth and Financials

One reason why I think Magna needs the Apple car--or a similar catalyst--to be a buy, is because its historical growth and profitability have been abysmal.

Below I reproduce Magna's revenue and earnings figures for 2014 and 2019:

2014	2019
Revenue	$36.64 billion	$39.43 billion
Earnings (net income)	$1.88 billion	$1.63 billion

So from 2014 to 2019, we have:

• A CAGR revenue growth rate of just 1.4%.
• Negative growth in net income.

So, pretty bad signs on the growth front. It's a similar story with profitability. According to Seeking Alpha data, we have:

• A 1.46% profit margin.
• A 4.46% ROE.
• A 12.5% gross profit margin.

Pretty underwhelming numbers. Overall, Seeking Alpha's quant system assigns Magna International a B+ on profitability. That might not sound too bad, but remember that these scores are sector-relative. The auto industry has been in the dumps in recent years and Magna does reasonably well compared to the industry norm. It does not score well on profitability compared to, say, mature tech companies like Adobe (ADBE) and Microsoft (MSFT).

Risks and Challenges

Because my thesis in this article is catalyst-specific, many of the risks and challenges to the thesis center around the catalyst never materializing. They have been touched on already, but to summarize:

• Apple not making an electric car. If Apple doesn't make an electric car then the most interesting possible catalyst for Magna just isn't there. The recent LG venture sounds promising but the exact scale and revenue potential of the partnership remain unclear.
• Apple choosing a different manufacturing partner. If Apple chooses Hyundai or Foxconn over Magna on manufacturing, then MGA won't be making much off the Apple Car. The Magna/LG joint venture could perhaps get a piece of the action by supplying parts to Apple, but that would be the extent of it.

The Bottom Line

The bottom line is this:

Magna international badly needs a catalyst.

Just recently, it got one, from LG. However, it's unclear how lucrative that partnership will really be. Most likely, the rally in MGA shares will calm down after the initial excitement of that announcement wears off.

An Apple car would be an even better catalyst. If Magna got an exclusive deal with Apple on car manufacturing, the revenue potential would likely be immense. And some analysts do think that Magna is a natural choice. But remember that Apple has many other partners to choose from, and that the contract car manufacturing industry is very competitive.

If the Apple car or some other EV-related catalyst doesn't materialize, then Magna is just a slow growth company with no moat and razor thin profit margins.

So wait for that catalyst. It could make good things happen, but nothing's happening without it.