De Run Electronics enters the automotive connector market, bullish brokers are optimistic

Derun Electronics announced that it will jointly invest with German companies to establish a complete vehicle wiring harness product company to enter the high-end automotive connector market. The stock price of the company rose sharply on Tuesday. A number of brokerages issued research reports to favor the company's development.

Derun Electronics recently announced that the company will jointly invest with a wholly-owned subsidiary of the German Kromberg Schubert Group to establish a Sino-foreign joint venture “Shenzhen Gaorun Technology Co., Ltd.”. The joint venture company expects a total investment of 10 million euros, and the company is expected to invest 4.5 million euros in proportion to the investment. The joint venture company is mainly engaged in the development, production and sales of automotive complete wiring harness products in China.

After the announcement, the company's share price rose strongly on Tuesday and closed up 9.58%.

Huatai United Securities pointed out that the performance requirements of automotive connectors and wire harness products relative to consumer electronic connectors are far more stringent, and there are extremely high requirements for various technical indicators such as insulation performance, electromagnetic interference, and bending performance. The company and Kromberg & Schuber form a joint venture subsidiary to enter the high-end automotive wire harness market. This is an effective way for the company to rapidly learn advanced R&D, design experience, improve management, and shorten the certification time of first-class OEMs.

Hongyuan Securities believes that the joint venture company has significant significance for the company to establish its position in the automotive connector industry in China. The company’s previous products were mainly concentrated on domestic self-owned brand automotive customers. This cooperation represents the trust of German companies in DeRun’s electronic quality and helps the company to successfully enter the high-end market for automotive connected devices.