Industry perspective: under the influence of the epidemic situation, geopolitics and other comprehensive factors, the global commodity prices have continued to rise, the prices of important raw materials for automobile production such as aluminum, magnesium, lithium, steel, oil, rubber and chips have continued to rise, and the cost of complete vehicles and parts has continued to be under pressure. Some complete vehicle enterprises have officially announced price increases since February, The market is worried that the pressure on the supply side will eventually be transmitted to the demand side, and the recent correction of the automotive sector is large. We believe that the price trend of raw materials is difficult to predict in the short term, but the electric and intelligent upgrading trend of the automotive industry remains unchanged, which is still the main logic of the next 5-10 dimensions. Some parts have fallen to a reasonable valuation level, and the medium and long-term configuration value is prominent, We recommend two main lines: the rise of independent brands and the upgrading of electric and intelligent vehicles.
Independent rise, electric intelligence. Main line 1: in 2021, the penetration rate of new energy passenger vehicles reached 14.8%. Under the background of the bottom support of three electricity technology, the logic of vehicle production changed, and the independent brand surpassed the joint venture in terms of organizational structure, supply chain perfection and business model. It is optimistic about the industrial chain investment opportunities brought by the rise of independent brands for a long time. Main line 2: new energy vehicles have entered the stage of high-quality development, demand driven models have improved their product power, and the technical trend has been upgraded to lithium iron phosphate, 4680 cylinder, multi-in-one electric drive system, vehicle platform high voltage and other multidimensional upgrades. Mainline 3: the core of automotive intelligence is the application of data flow. Incremental parts include: acquisition end – laser radar, millimeter wave radar, camera and other sensors, transmission end – high-speed connector, calculation end – domain controller, application end – air suspension, wire controlled braking and steering, interaction end – HUD, interactive lamp, central control instrument, sky glass, etc.
Forecast of the annual report: as of March 5, 102 companies in the automotive sector announced the forecast of the 2021 annual report, of which 40 achieved pre increase, 2 continued profit, 4 slightly increased, 13 reversed losses, 14 pre reduced, 9 continued losses, 18 first loss and 2 slightly reduced. At present, the industry is under pressure. With the gradual easing of chip supply and the recovery of passenger car consumption, the overall profitability of the industry is expected to enter the repair channel.
Market: the auto sector was weaker than the market in February. As of February 28, CS auto sector rose by 0.13%, of which CS passenger cars rose by 3.23%, CS commercial vehicles fell by 2.35%, CS auto parts fell by 1.48%, CS auto sales and services rose by 0.99%, CS motorcycles and others fell by 2.38%, and the Shanghai Shenzhen 300 index and Shanghai Composite Index rose by + 0.39% / + 3.00% respectively in the same period; Since the beginning of 2022, the automobile sector has fallen by 11.39%, and the Shanghai Shenzhen 300 and Shanghai composite indexes have decreased by – 7.29% / – 4.88% respectively.
Raw materials: in February 2022, the price of automobile raw materials continued to rise, and aluminum ingots and zinc ingots increased month on month; Float glass and rubber increased month on month and decreased year on year; Steel rubber decreased month on month and increased year on year.
Risk warning: Overseas epidemic brings supply chain risk and demand recovery is lower than expected risk.
Investment suggestion: focus on recommending vehicle enterprises with strong independent new product cycle: Great Wall Motor Company Limited(601633) , Byd Company Limited(002594) , Geely Automobile, Guangzhou Automobile Group Co.Ltd(601238) ; Core increment / growth parts: the core of the core increment / growth parts and components of the core increment / parts of the core increment / growing parts: the following: ofthe following of the following of the following: the core of the core of the core of the core and the parts of the parts of the core: the core of the core increment / parts of the parts of the core of the core increment / parts of the parts of the parts of the parts of the core of the core of the core of the core of the core of the core of the core of the core of the core of the core of the core of the core of the following:: 60179 Changzhou Xingyu Automotive Lighting Systems Co.Ltd(601799) of the\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ and integrated die casting ( Nanjing Chervon Auto Precision Technology Co.Ltd(603982) ), air suspension and other tracks with rapid penetration.
