Zhou’s views and investment suggestions
In November, the monthly sales volume of Chinese cars was 2.522 million, with a month on month ratio of – 9.1% / + 8.1% respectively. From January to November, the cumulative sales volume was 23.712 million, with a cumulative year-on-year increase of + 3.5%. From the production and sales data, it is not difficult to find that 1) the sales volume of new energy vehicles continues to grow rapidly. In November, the sales volume of new energy vehicles was 450000, with a month on month ratio of + 121.1% / + 17.3% respectively, and the monthly penetration rate reached 17.8%, a record high. 2) The sales pattern under epidemic + core shortage has been reshaped, and independent brands have risen. On the one hand, the growth rate of independent sales in typical independent + joint venture car enterprises represented by GAC and SAIC is higher than that of joint venture. On the other hand, the sales of pure independent enterprises represented by Byd Company Limited(002594) , great wall and Wei Xiaoli are rising. 3) The core shortage continued to ease, and the dealer’s inventory coefficient tended to be better. In November, the dealer inventory coefficient was 1.35, which was still lower than the warning line of 1.50, but increased by 4.7% month on month. Considering the production cycle of the whole vehicle, we believe that the most severe period of core shortage has passed.
In December, the Ministry of Commerce said that it would focus on promoting the expansion of consumption of key commodities, encourage relevant regions to optimize automobile purchase restriction measures, carry out a new round of policy support such as automobile going to the countryside and exchanging old for new. At the same time, the promotion of replenishing inventory after core shortage improvement, as well as the continued marginal improvement of raw materials, freight and other factors. We expect that the sales of complete vehicles in China in 2021 will be about 26.1 million, with a year-on-year increase of about 3.4%, The sales volume of new energy vehicles is about 3.43 million, and the annual penetration rate is expected to reach 13%. The most difficult period of the automobile industry has passed. Looking forward to 2022, it is expected that the industry will usher in a simultaneous rise in volume and price, especially the profitability of parts companies is expected to rebound significantly, and continue to maintain the view that the automobile sector will usher in strategic allocation opportunities. Maintain the “recommended” rating of the automotive industry.
Three main lines are recommended:
1. Complete vehicle: recommend Byd Company Limited(002594) , Great Wall Motor Company Limited(601633) represented by independent revitalization, and pay attention to Saic Motor Corporation Limited(600104) , Guangzhou Automobile Group Co.Ltd(601238) dominated by joint venture.
2. Tesla industrial chain: it mainly focuses on the production and manufacturing revolution, 4680 battery, CTC and integrated die casting. It is recommended that Ningbo Tuopu Group Co.Ltd(601689) , Zhejiang Yinlun Machinery Co.Ltd(002126) , Ningbo Xusheng Auto Technology Co.Ltd(603305) , Wencan Group Co.Ltd(603348) , Huada Automotive Technology Corp.Ltd(603358) etc.
3. Intelligent driving & Automotive Electronics: the change of business model and the improvement of automotive electronics brought by intelligence have sorted out four tracks: 1) domain controller 2) chassis by wire system 3) 800V high voltage 4) intelligent cockpit. It is recommended to Huizhou Desay Sv Automotive Co.Ltd(002920) , Foryou Corporation(002906) , Keboda Technology Co.Ltd(603786) , Bethel Automotive Safety Systems Co.Ltd(603596) , Thunder Software Technology Co.Ltd(300496) , Xiamen Faratronic Co.Ltd(600563) , Wuhan Lincontrol Automotive Electronics Co.Ltd(688667) .
Market review: 1) the rise and fall of the automobile sector this week ranked 26th among all industries. This week, Shanghai A shares, Shenzhen A-Shares and Shanghai and Shenzhen 300 rose or fell by 1.69%, 1.14% and 2.90% respectively. The auto sector rose or fell by – 0.23%, ranking 26th among 30 industries, in the downstream range. 2) Among the sub sectors, automobile sales and service performed best. From the perspective of molecular sectors, passenger cars, commercial vehicles, auto parts, auto sales and services, motorcycles and others increased or decreased by 0.40% / – 1.04% / – 1.10% / 4.40% / – 1.09% respectively. 3) The top five stocks rose or fell. In terms of individual stocks, the top five companies in the industry this week were Yunnan Xiyi Industrial Co.Ltd(002265) , Guangdong Dcenti Auto-Parts Stock Limited Company(603335) , Hunan Tyen Machinery Co.Ltd(600698) , Zhejiang Yueling Co.Ltd(002725) , Guangdong Hongtu Technology (Holdings) Co.Ltd(002101) , with increases of 61.18% / 61.18% / 61.14% / 60.97% / 35.68% respectively. The top five companies with decreases were Foryou Corporation(002906) , Ningbo Heli Technology Co.Ltd(603917) , Dynavolt Renewable Energy Technology (Henan) Co.Ltd(002684) , Nanjng Yueboo Power System Co.Ltd(300742) , Changchun Faway Automobile Components Co.Ltd(600742) , with decreases of – 14.08% / – 14.60% / – 15.72% / – 18.60% / – 23.18%.
Industry highlights: 1) in November, the contraction of traditional fuel vehicles coexisted with the sharp increase of new energy vehicles, Byd Company Limited(002594) became a dark horse in the market (passenger Association); 2) Ford confirmed Contemporary Amperex Technology Co.Limited(300750) as its battery supplier for the first time; 3) BMW signed a long-term supply agreement with Inova and lattice core, which can obtain “millions” of chips every year; 4) LG new energy will be listed on January 27, with an issue price of US $218-255; 5) the approval of Xiaomi vehicle identification patent can reduce the number of children abducted.
Key company dynamics: Saic Motor Corporation Limited(600104) : Saic Motor Corporation Limited(600104) November sales exceeded 600000, and new energy vehicles increased by 45.6% year-on-year. Geely Automobile: core engine technology officially released 7Nm intelligent cockpit chip, and Geely won the first battle of making core. Byd Company Limited(002594) : Byd Company Limited(002594) the new energy project with an annual output value of 70 billion will be settled in Xi’an and completed and put into operation in 2024. Chongqing Changan Automobile Company Limited(000625) : it has obtained international certification, and Chang’an Hunter won the best pickup truck in Saudi Arabia in 2021.
Risk tips: 1 If the overseas epidemic continues to worsen, it will affect China’s automobile export; 2. The performance of the recommended company is less than expected; 3. The demand growth of new energy vehicles is lower than expected; 4. The chip shortage was alleviated less than expected; 5. The launch performance of new models is lower than expected.
