Analysis of automobile production and sales in February: production and sales increased significantly year-on-year, and new energy vehicles continued to grow at a high rate

Key investment points

Demand rebounded, and automobile production and sales increased significantly year-on-year in February: according to the data released by China Automobile Association on March 12, the national automobile production and sales in February 2022 completed 1.813 million and 1.737 million respectively, with a month on month decrease of 25.2% and 31.4% respectively, and a year-on-year increase of 20.6% and 18.7% respectively. In February, automobile production and sales increased significantly year-on-year, mainly due to: 1) driven by new energy vehicles and automobile exports; 2) Inventory replenishment drives demand growth. From January to February, the production and sales of automobiles reached 4.235 million and 4.268 million respectively, with a year-on-year increase of 8.8% and 7.5% respectively.

According to the survey results of "automobile dealer inventory" in February 2022 released by China Automobile Circulation Association, the comprehensive inventory coefficient of automobile dealers was 1.85, an increase of 10.1% year-on-year and 26.7% month on month. The Spring Festival and scattered epidemic in many places were the main reasons for the increase of inventory in February. At the end of February, dealers entered the replenishment stage, and the inventory level was above the warning line. The inventory coefficient of high-end luxury & imported brands was 1.60, up 31.1% month on month; The inventory coefficient of joint venture brands was 2.01, up 37.7% month on month; The inventory coefficient of independent brands was 1.74, up 10.1% month on month. Affected by the gradual decline of luxury brand prices and the rise of independent brands against the trend, the superimposed core shortage continued, the sales volume of joint venture brands continued to decline, and the inventory pressure increased significantly.

New energy vehicles continued to maintain rapid growth year-on-year, with a monthly penetration rate of 19%. In February, the production and sales of new energy vehicles were 368000 and 334000 respectively, with a year-on-year increase of 2.0 times and 1.8 times respectively. Among them, the production and sales of pure electric vehicles were 285000 and 258000 respectively, with a year-on-year increase of 1.7 times and 1.6 times respectively; The production and sales of plug-in hybrid electric vehicles were 83000 and 75000 respectively, with a year-on-year increase of 4.1 times and 3.4 times respectively; The production and sales of fuel cell vehicles were 213 and 178 respectively, with a year-on-year increase of 7.5 times and 5.4 times respectively. Xinneng automobile market penetration reached 19.2%, accelerating penetration.

From January to February, the production and sales of new energy vehicles were 820000 and 765000 respectively, with a year-on-year increase of 1.6 times and 1.5 times respectively. Among them, the production and sales of pure electric vehicles were 652000 and 604000 respectively, with a year-on-year increase of 1.4 times; The production and sales of plug-in hybrid electric vehicles were 168000 and 160000 respectively, with a year-on-year increase of 2.8 times and 2.5 times respectively; The production and sales of fuel cell vehicles were 356 and 371 respectively, with a year-on-year increase of 5.0 times and 3.1 times respectively.

Driven by policy support and supply, China Shanxi Guoxin Energy Corporation Limited(600617) automobile industry chain has gradually matured, diversified new energy vehicle products continue to meet market demand, and new energy vehicles are expected to continue to maintain higher than expected growth this year.

The year-on-year growth rate of passenger car production and sales was better than the industry level: in February, the production and sales of passenger cars completed 1.534 million and 1.487 million respectively, with a month on month decrease of 26.1% and 32.0% respectively, and a year-on-year increase of 32.0% and 27.8% respectively, which was better than the overall performance of the industry.

From January to February, the production and sales of passenger cars were 3.612 million and 3.674 million respectively, with a year-on-year increase of 17.6% and 14.4% respectively. In terms of vehicle segments: car production and sales accounted for 20.7% and 16.4% respectively year-on-year; MPV output decreased by 4.9% year-on-year, and sales increased by 3.8% year-on-year; The production and sales of cross passenger cars increased by 39.5% and 35.2% respectively year-on-year

In February, 634000 Chinese brand passenger cars were sold, with a year-on-year increase of 27.9%, accounting for 42.6% of the total passenger car sales, which was basically the same as that in the same period last year. From January to February, the sales of Chinese brand passenger cars were 1.637 million, a year-on-year increase of 20.3%, accounting for 44.6% of the total sales of passenger cars, an increase of 2.2 percentage points over the same period last year.

As China's passenger car market is gradually changing from incremental market to stock market, competition intensifies, and differentiation will become the main theme of independent brands in the future. Brands with weak technology, slow launch of new cars and small scale will be gradually eliminated, and the market share will accelerate to the concentration of leading enterprises with brand and technical advantages such as great wall and Geely.

The year-on-year decline in the production and sales of commercial vehicles narrowed: in February, the production and sales of commercial vehicles were 279000 and 250000 respectively, down 19.2% and 27.4% month on month respectively; The year-on-year decline was 18.3% and 16.6% respectively, and the year-on-year decline was narrowed by 9.7 and 8.5 percentage points respectively compared with the previous month.

From January to February, the production and sales of commercial vehicles were 624000 and 594000 respectively, with a year-on-year decrease of 24.0% and 21.7% respectively. In terms of subdivided models, the production and sales of freight cars decreased by 25.0% and 22.7% year-on-year respectively, and the production and sales of passenger cars decreased by 10.8% and 10.9% year-on-year respectively.

In February, the sales volume of heavy trucks was 59000, down 50% year-on-year and 27.8% month on month; From January to February, the cumulative sales volume of heavy trucks was 154000, a year-on-year decrease of 49%. The sales volume of Sinotruk Jinan Truck Co.Ltd(000951) heavy trucks of major automobile enterprises in February was 12000, a year-on-year decrease of 54%; From January to February, the sales volume of Sinotruk Jinan Truck Co.Ltd(000951) heavy trucks was 39000, a year-on-year decrease of 24%. We predict that with the end of the off-season from February to March and the introduction of steady growth policies, the recovery of the heavy truck industry may be earlier than expected.

Investment suggestion: in February 2022, the automobile production and sales performance was stable, with a large year-on-year increase. In February, the production index and new order index of the automobile industry were higher than 54.0%, and the expected index of production and operation activities has been in the high boom range of more than 60.0% for two consecutive months since January, which is higher than the average level of the manufacturing industry. We expect that the automobile market demand in the first quarter will be relatively stable and the core shortage will continue to ease. However, considering the high base factor in the same period last year, the automobile production and sales will achieve a slight year-on-year growth in the first quarter of this year, and the new energy vehicles will continue to grow at a high rate, with a high probability of exceeding expectations throughout the year. We recommend three main lines:

(1) independent brand leader with strong new product cycle: Great Wall Motor Company Limited(601633) .

(2) parts enterprises closely related to the electric intelligent industrial chain with high growth certainty: Huizhou Desay Sv Automotive Co.Ltd(002920) , Guangdong Senssun Weighing Apparatus Group Ltd(002870) , Zhejiang Sanhua Intelligent Controls Co.Ltd(002050) , Changzhou Xingyu Automotive Lighting Systems Co.Ltd(601799) , Shandong Linglong Tyre Co.Ltd(601966) .

(3) heavy truck enterprises with increasing market share and expected to usher in a performance inflection point: Sinotruk Jinan Truck Co.Ltd(000951) .

Risk warning: the price of upstream raw materials has risen sharply; The impact of the shortage of automotive chips continues; Weak economic growth affects automobile demand.

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