Core view:
View update this week
The demand is stable and positive. Dealers still have the demand for replenishment in February. The growth rate of wholesale and retail in February is worth looking forward to and is optimistic about the growth opportunities of the sector. According to the data of China Automobile Association, in January 2022, China’s automobile production and sales completed 2.422 million and 2.531 million respectively, with a month on month decrease of 16.7% and 9.2% respectively, and a year-on-year increase of 1.4% and 0.9% respectively. Due to the early shutdown of production before the festival in January, the channel inventory after the peak sales of the car market in January is still at a low level. With the rapid recovery of normal production and sales status of car enterprises after the festival, dealers still have a good demand for replenishment in February, and the growth rate of wholesale and retail in February is worth looking forward to.
Weekly market review
This week, the Shanghai Composite Index, Shenzhen Component Index and Shanghai Shenzhen 300 index rose or fell by 0.80%, 1.78% and 1.08% respectively. The rise and fall of the automobile sector was 2.07%, ranking 10th among 30 industries, with an upper range. In terms of individual stocks, the top five companies in the industry this week were Dalian Demaishi Precision Technology Co.Ltd(301007) , Zhuhai Enpower Electric Co.Ltd(300681) , Lizhong Sitong Light Alloys Group Co.Ltd(300428) , Dynavolt Renewable Energy Technology (Henan) Co.Ltd(002684) and Zhengqiang shares, with increases of 23.19% / 18.32% / 18.05% / 17.91% / 15.68% respectively. The top five companies with decreases were Shenzhen Roadrover Technology Co.Ltd(002813) , No. 9 company – WD, Senci Electric Machinery Co.Ltd(603109) , Huayang variable speed, Beiqi Foton Motor Co.Ltd(600166) , with decreases of – 8.30% / – 7.64% / – 6.82% / – 6.03% / – 5.96% respectively.
Judgment and rating description of Industry Valuation
The prosperity of independent brands continues to rise, and investment opportunities related to automobile electrification and intellectualization run through the industrial chain. We suggest continuing to pay attention to Guangzhou Automobile Group Co.Ltd(601238) (601238. SH), Chongqing Changan Automobile Company Limited(000625) (000625. SZ), Great Wall Motor Company Limited(601633) (601633. SH / 2333. HK); The parts industry suggests paying attention to the comprehensive leader Huayu Automotive Systems Company Limited(600741) (600741. SH), the scarce subject of lighting controller Keboda Technology Co.Ltd(603786) (603786. SH), and the supplier of intelligent driving active and passive safety Ningbo Joyson Electronic Corp(600699) (600699. SH).
Risk tips
1. The risk that the automobile sales volume does not meet the expectation; 2. Industrial chain risk caused by chip shortage; 3. The risk of adverse impact of rising raw material prices on profits.
