This week’s view: Luxshare Precision Industry Co.Ltd(002475) enter auto OEM and Tier1, and the value of platform auto parts companies is highlighted. On the evening of February 11, Luxshare Precision Industry Co.Ltd(002475) announced that: 1) it plans to establish a joint venture with Chery new energy (30% of Tencent and 70% of Chery new energy), specializing in the R & D and manufacturing of new energy vehicles, and providing cutting-edge R & D, design, mass production platform and access to the sea for Luxshare Precision Industry Co.Ltd(002475) core parts business; 2) Luxshare Precision Industry Co.Ltd(002475) the controlling shareholder, Lixun Co., Ltd., plans to purchase 19.88% equity of Chery holdings, 7.87% equity of Chery shares and 6.24% equity of Chery new energy for 10.05 billion yuan. We believe that; 1) Luxshare Precision Industry Co.Ltd(002475) is a leading company in Apple’s industrial chain. It has laid out the automobile business for more than 10 years. The automobile business revenue in 2021h1 is 1.77 billion yuan, accounting for 3.7%. This acquisition marks its formal entry into the automobile OEM business and automobile parts Tier1. 2) Compared with the consumer electronics industry, the automotive industry has higher requirements for the safety and qualification of parts suppliers. By acquiring Chery shares and taking it as the R & D and mass production platform, Luxshare Precision Industry Co.Ltd(002475) can quickly establish the vehicle regulation system and build Tier1 capacity, so as to prepare for the subsequent OEM and supply of parts for apple. 3) The value of platform tier 1 is prominent. Smart car is a broader market than consumer electronics. The entry of Luxshare Precision Industry Co.Ltd(002475) into the auto parts business is going from 0 to 1. The traditional Tier1 with category expansion ability, such as Ningbo Tuopu Group Co.Ltd(601689) , Huayu Automotive Systems Company Limited(600741) , Anhui Zhongding Sealing Parts Co.Ltd(000887) , is going from 1 to 10. The value is expected to be revalued with the entry of “novices”.
Market review: the performance of the automobile sector was weak this week, led by new energy and intelligent vehicles. CITIC auto index fell 1.37%, 2.19 percentage points behind the market, ranking 26th among 30 industries. Among them, passenger cars rose 0.69%, commercial vehicles rose 1.20%, auto parts fell 3.90%, new energy vehicle index fell 5.57% and smart vehicle index fell 5.56%. The sharp decline of Contemporary Amperex Technology Co.Limited(300750) led to a sharp decline in the new energy sector, and the segments that were relatively resistant to decline in the early stage, such as smart cars and auto parts, also ushered in a make-up decline.
Data tracking: 1) the wholesale sales of the passenger Union in January was + 1.9% year-on-year, and the retail sales was – 4.4% year-on-year. From the perspective of wholesale, the average sales volume of the first four Sundays were 52000, 58000, 75000 and 84000 respectively, with a year-on-year increase of – 4.2%, + 0.2%, + 21.8% and – 5.2% respectively. From the retail perspective, the average sales volume of the first four Sundays were 58000, 63000, 86000 and 66000 respectively, with a year-on-year increase of + 5.6%, – 1.9%, 27.7% and – 31.8% respectively. On the whole, the performance of passenger car sales in January was weak, which was mainly affected by the early release of some volumes in the Spring Festival and December 21. 2) Some raw material prices rose again. From January to February, the quotation of Changjiang nonferrous aluminum A00 increased by 9.8% and 17.8% respectively compared with December of 21 years. The profit of aluminum alloy die casting company is under pressure again.
Investment suggestions: 1) intelligent driving industry chain, focusing on Foryou Corporation(002906) , Huizhou Desay Sv Automotive Co.Ltd(002920) , Lianchuang Electronic Technology Co.Ltd(002036) , sunny optics, Bethel Automotive Safety Systems Co.Ltd(603596) , Nextel and China Automotive Engineering Research Institute Co.Ltd(601965) . 2) Auto parts, focus on ① Tesla industrial chain, Ningbo Tuopu Group Co.Ltd(601689) , Ningbo Xusheng Auto Technology Co.Ltd(603305) , Zhejiang Sanhua Intelligent Controls Co.Ltd(002050) , Zhejiang Yinlun Machinery Co.Ltd(002126) ; ② Lightweight, Wencan Group Co.Ltd(603348) , Ikd Co.Ltd(600933) ; ③ Platform company, focus on Huayu Automotive Systems Company Limited(600741) , Anhui Zhongding Sealing Parts Co.Ltd(000887) . 3) The trend of independent rise is clear. The vehicle manufacturer suggests paying attention to Geely Automobile, Great Wall Motor Company Limited(601633) , and the undervalued value Saic Motor Corporation Limited(600104) .
Risk tip: the lack of chips exceeded expectations, resulting in the industry recovery less than expected; The progress of intelligent electric is less than expected; Bulk price increases and core deficiency fermentation exceeded expectations.
