Market review: affected by the Russia Ukraine incident, some overseas enterprises began to shut down factories, the global supply chain was tight, and the overall performance of the automobile sector was poor this week. This week (2.28-3.4), SW automobile sector was – 4.47%, ranking 31 / 31; In the sub sections, SW passenger cars – 4.75%, SW commercial vehicles – 2.63%, SW auto parts – 4.80%, SW Auto Services – 0.48%, SW motorcycles and others – 4.24%. From the perspective of valuation level, the overall PE of SW auto sector was callback to 36.5 times, which was 63.7% of the past five years, and the PE of SW auto parts sub sector was callback to 36.1 times, which was 42.7% of the past five years.
Industry status: in February 2022, affected by the Spring Festival holiday, China’s retail sales volume was 1312000 units, with a year-on-year increase of 10% and a month on month decrease of 37%. From February 21 to 28, 644000 passenger cars were retailed in China, with a year-on-year increase of 31% and a month on month increase of 81%. The weekly situation recovered well. Steel, aluminum, copper and other raw materials and freight prices are still high, and corporate profits are under pressure.
The two sessions emphasized supply chain guarantee and supported the consumption of new energy vehicles. On March 5, 2022, the 2022 government work report was released (hereinafter referred to as the report). In terms of automobiles, it is mainly mentioned as follows: 1 Orderly promote carbon peak and carbon neutralization; 2. Strengthen the guarantee of raw materials and key parts; 3. Guide financial institutions to increase medium and long-term loans for manufacturing; 4. Continue to support the consumption of new energy vehicles. Disturbed by adverse factors such as “core shortage + epidemic + overseas situation”, the supply of core parts is tight, and the price of raw materials continues to rise. At present, the pressure on the industrial chain is obvious, and the support of top-level macro-control is conducive to the recovery of the industrial chain.
Investment suggestion: electrification and intellectualization of automobiles are still the general trend of the industry. It is suggested to continue to pay attention to three main lines: electrification & lightweight: the boom of new energy demand is determined, and the penetration rate continues to increase. It is suggested to pay attention to: Byd Company Limited(002594) , Ningbo Tuopu Group Co.Ltd(601689) , Wencan Group Co.Ltd(603348) , Nanjing Chervon Auto Precision Technology Co.Ltd(603982) , Zhejiang Shuanghuan Driveline Co.Ltd(002472) , Ningbo Xusheng Auto Technology Co.Ltd(603305) , Ikd Co.Ltd(600933) , etc; Intellectualization: intelligent cockpit and intelligent driving are accelerated, and the intelligent configuration of new cars is continuously improved. It is suggested to pay attention to: Huizhou Desay Sv Automotive Co.Ltd(002920) , Foryou Corporation(002906) , Bethel Automotive Safety Systems Co.Ltd(603596) , Anhui Zhongding Sealing Parts Co.Ltd(000887) , Shanghai Baolong Automotive Corporation(603197) , Ningbo Jifeng Auto Parts Co.Ltd(603997) , Suzhou Sonavox Electronics Co.Ltd(688533) , etc; Improvement of core shortage: traditional automobile enterprises are greatly impacted by core shortage. With the improvement of supply, enterprise operation is expected to improve. It is suggested to pay attention to: Changzhou Xingyu Automotive Lighting Systems Co.Ltd(601799) , Keboda Technology Co.Ltd(603786) , Fuyao Glass Industry Group Co.Ltd(600660) , Great Wall Motor Company Limited(601633) , Geely motor.
Risk tip: the industry’s terminal sales volume is less than expected, the manufacturer’s R & D or new car release progress is less than expected, the upstream raw material supply is insufficient or the price rise leads to the decline of industry profits, etc
