Zhou’s point of view update: on the evening of December 23, Huawei launched the first Hongmeng car with its own in-depth participation in the whole process – AITO Q & A M5. Qjie M5 is positioned as a medium and large luxury SUV. It adopts an additional program powertrain, with a comprehensive range of more than 1000km. AITO M5 applies Huawei intelligent driving technology, harmony OS intelligent cockpit, Huawei sound system and other technologies.
Huawei has fully “led” the design, R & D, engineering technology, software and hardware and sales of AITO M5, but still adheres to the strategic decision of “Huawei does not build cars”. We believe that this is similar to Google’s previous practice of jointly launching Android’s annual flagship through mobile phone manufacturers to show its technical strength. Huawei’s smart car solution Bu shows its perfect layout and profound technical accumulation in various fields of smart cars through a number of advanced technologies of AITO M5.
Industry rating and investment strategy: maintain the “recommended” rating of the automotive industry. Optimistic about the continued growth of the automobile market. On the one hand, with the gradual easing of the epidemic in Malaysia and Bosch and other manufacturers increasing investment in chip production capacity, the impact of chip shortage is continuously improving. On the other hand, the rise of raw material prices and freight is expected to usher in marginal improvement in Q4. The limited capacity of Q3 of major main engine plants is expected to be gradually released. Driven by the superposition of inventory replenishment, the automobile sector will usher in strategic allocation opportunities. At the same time, we believe that this round of chip shortage will accelerate the reconstruction of the new pattern of the automobile market, continue to be optimistic about the accelerated rise of independent brands, and continue to be optimistic about new energy / new forces to seize the market share of traditional automobiles. We expect the year-on-year decline of Q4 China’s automobile sales to narrow month by month, maintain a growth rate of about 10% month on month, and maintain a high growth rate of new energy sales. It is estimated that China’s whole vehicle sales in 2021 will be about 26.1 million, with a year-on-year increase of about 3.4%, of which the sales of new energy vehicles will be about 3.43 million, and the annual penetration rate is expected to reach 13%.
Three main lines are recommended:
1. Complete vehicle: revaluation of complete vehicle valuation brought by Tesla wave α Opportunities, first Byd Company Limited(002594) , Saic Motor Corporation Limited(600104) , Great Wall Motor Company Limited(601633) , Guangzhou Automobile Group Co.Ltd(601238) , recommend Geely Automobile, Yutong Bus Co.Ltd(600066) , Chongqing Changan Automobile Company Limited(000625) .
2. Tesla industrial chain: new energy vehicles are in large quantities, and the negotiated prices of core supply rise together. First Ningbo Tuopu Group Co.Ltd(601689) , Zhejiang Yinlun Machinery Co.Ltd(002126) , recommend Ningbo Xusheng Auto Technology Co.Ltd(603305) , Ikd Co.Ltd(600933) , Huayu Automotive Systems Company Limited(600741) , Zhejiang Sanhua Intelligent Controls Co.Ltd(002050) , Changzhou Xingyu Automotive Lighting Systems Co.Ltd(601799) , Fuyao Glass Industry Group Co.Ltd(600660) , Ningbo Joyson Electronic Corp(600699) , Zhejiang Shuanghuan Driveline Co.Ltd(002472) , and pay attention to Huada Automotive Technology Corp.Ltd(603358) , Guangdong Hoshion Aluminium Co.Ltd(002824) .
3. Intelligent driving & Automotive Electronics: the change of business model and the improvement of automotive electronics brought by intelligence. 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) are recommended.
Market review: 1) this week, A-Shares of Shanghai Stock Exchange, A-Shares of Shenzhen Stock Exchange and CSI 300 rose and fell by – 0.30%, – 0.87% and – 0.14% respectively, and the rise and fall of automobile plate was – 0.25%. The rise and fall ranked 17th among 30 industries and the middle range. 2) Among the sub sectors, commercial vehicles performed the best: from the perspective of molecular sectors, passenger cars, commercial vehicles, parts, automobile sales and services, motorcycles and others increased or decreased by – 4.36%, – 1.18%, 5.31%, – 2.19% and – 1.48% respectively. 3) The top five stocks with rise and fall: from the perspective of individual stocks, the top five companies in the industry this week were Yunnan Xiyi Industrial Co.Ltd(002265) , Suzhou Sonavox Electronics Co.Ltd(688533) , Shanghai Yanpu Metal Products Co.Ltd(605128) , Shanghai Baolong Automotive Corporation(603197) , Hainan Drinda Automotive Trim Co.Ltd(002865) , with increases of 40.68% / 28.94% / 25.38% / 21.65% / 19.51% respectively, and the top five companies with declines were Zhejiang Yueling Co.Ltd(002725) , Guangdong Dcenti Auto-Parts Stock Limited Company(603335) , West Shanghai Automotive Service Co.Ltd(605151) , Zhengqiang shares, Zhongjie (Jiangsu) Technology Co.Ltd(301072) , with decreases of – 22.57% / – 21.22% / – 20.08% / – 17.00% / – 16.16% respectively
Industry highlights: 1) the passenger Federation predicts that the retail sales of narrow passenger vehicles in December will be 2.05 million, and the annual sales volume will be 2.09 million; 2) The United States introduced the most stringent new regulations on automobile emission in history; 3) The market share of electric vehicles in Europe reached 26% in November.
Key company trends: 1) Huawei launched the first Hongmeng auto AITO M5, showing strong technical strength; 2) Byd Company Limited(002594) will increase its shareholding in Tengshi to 90%; 3) In 2021 Guangzhou Automobile Group Co.Ltd(601238) , the production and sales of automobiles are expected to be about 2098000 and 2113000 respectively, with a year-on-year increase of about 3.1% and 3.4% respectively. GAC AEAN will start round a financing and employee stock ownership; 4) Audi’s main plant will only produce electric vehicles from 2028; 5) Volkswagen upgrades software to improve charging performance; 6) Gotion High-Tech Co.Ltd(002074) has signed an agreement with a large listed automobile company in the United States. The automobile company expects to purchase lithium iron phosphate batteries from Gotion High-Tech Co.Ltd(002074) with a total amount of not less than 200gwh from Gotion High-Tech Co.Ltd(002074) between 2023 and 2028.
Risk tip: if the overseas epidemic continues to deteriorate, it will affect China’s automobile export volume; Recommend the risk that the company’s performance is less than expected; Risk that demand growth is less than expected; Risk of continuous rise in raw material prices and freight; There is a risk that the penetration rate of new energy vehicles is lower than expected.
