Industry trend and valuation
From February 19, 2022 to March 11, 2022, CSI 300 fell by 7.41%, SW auto sector fell by 9.23%, underperforming the market by 1.82 percentage points. The upgrading of the situation in Russia and Ukraine and the impact of the price rise of main raw materials on profit expectation are the main reasons for the downturn of the market and the sector.
As of the closing on March 11, the TTM P / E ratio of SW automobile industry had dropped to 25 times, and the valuation premium ratio relative to Shanghai and Shenzhen 300 continued to drop to 112.84%, including 31 times for passenger cars and 24 times for parts.
Industry: sales volume increased by double digits year-on-year, and the pressure on the cost side disturbed the short-term profit expectation
In February, the automobile sales volume was 1.737 million, with a year-on-year increase of 18.7%, showing a strong performance, with a month on month decrease of 31.4%, which was less than the same period since 2018. Among them, the passenger car sales volume was 1.487 million, with a year-on-year increase of 27.8% and a month on month decrease of 32.0%. By department, the sales volume of independent passenger cars reached 634000 in February, with a year-on-year increase of 27.8%, basically in line with the growth rate of the industry, with a corresponding market share of 42.6%, a month on month decrease of 0.3/3.3pct.
At the end of February, the inventory of passenger cars was 481000, an increase of 9.82% compared with the beginning of the month; In the same period, the inventory depth coefficient of auto dealers increased to 1.85 compared with the previous month, and the channel replenishment continues.
In terms of price, the price of passenger cars is at a relatively high level, and the terminal preference is narrowed year-on-year; In terms of cost, the price of main raw materials has increased recently, and the pressure of short-term automobile manufacturing cost remains.
New energy vehicles: the high prosperity remains unchanged, and the proportion of LFP loading remains high
In February, the sales volume of new energy vehicles was 334000, with a year-on-year increase of 184.3% and a month on month decrease of 22.6%, which was less than that in the same period of 2019 and 2021. At present, the supply of new energy vehicles continues to be diversified and high-quality. There are still many orders to be delivered by major vehicle enterprises, and the terminal demand is still strong. In terms of upstream industrial chain, the loading volume of power battery in February was 13.68gwh, with a year-on-year increase of 145.09% and a month on month decrease of 15.50%. Structurally, LFP accounted for 56.89% in February, with an increase of 17.46/2.06pct on a month on month basis. We expect that with the promotion of high nickel line this year, the proportion of ternary power battery is expected to rise steadily.
Investment strategy
1) in February, under the influence of tight chip supply (especially the insufficient ESP supply caused by the epidemic in Suzhou Bosch) and the spread of the epidemic, the month on month decline was less than that in the same period in recent years, indicating that the terminal demand is still in progress and there is a foundation for the recovery of the industry. Although the short-term rise in the price of raw materials has a great impact on the profits of the industry, especially small and medium-sized parts manufacturers, from the perspective of lengthening the cycle, the trend of automobile intelligent electric and lightweight promotes the continuous upgrading of the industrial structure, and finally realizes the “import substitution” and “going out”, with upward volume and price profits. From a comprehensive analysis, we expect that on the premise of improving the marginal supply of chips and strict prevention and control of the epidemic in China, the sales volume is expected to turn positive year-on-year under the conditions of normal replenishment and delayed order delivery this year. Combined with the low base effect of last year, it is expected to achieve rapid growth throughout the year. In terms of internal structure, we believe that the brand and pattern of the passenger car sector will continue to be optimized. It is suggested to pay attention to the independent industrial chain with strong product power and resonance with the new car cycle, as well as the high-quality joint venture brand industrial chain under the logic of replenishment and recovery of follow-up industries, especially the investment opportunities of high-quality parts under the joint vibration of replenishment and export recovery. Generally speaking, the recommended targets are Saic Motor Corporation Limited(600104) ( Saic Motor Corporation Limited(600104) ), Guangzhou Automobile Group Co.Ltd(601238) ( Guangzhou Automobile Group Co.Ltd(601238) ), Chongqing Changan Automobile Company Limited(000625) ( Chongqing Changan Automobile Company Limited(000625) ), and the targets of high-quality parts are Huayu Automotive Systems Company Limited(600741) ( Huayu Automotive Systems Company Limited(600741) ), Mingxin Automotive Leather Co.Ltd(605068) ( Mingxin Automotive Leather Co.Ltd(605068) ).
2) in terms of new energy vehicles, although the prices of many models have been raised due to the decline of subsidies and the price adjustment of power batteries since the beginning of the year, and the rapid growth of the industry is expected to face certain pressure, we believe that at present, the independent and new forces of car manufacturing and international car enterprises such as Tesla and Volkswagen continue to speed up the layout of the Chinese market, the supply of models is increasingly diversified and the market competitiveness is continuously improved, The logic of supply stimulating demand will continue to be deduced. Therefore, we are not pessimistic about the sales volume this year. Among them, hybrid and class a vehicles will effectively supplement the model product line this year, which is expected to contribute to the main increment. At the same time, the global new energy vehicle market will continue to grow rapidly under the leadership of China, Europe and the United States. Therefore, along the supply chain mainline of globalization, along the supply chain mainline of global supply chain, we are optimistic: ① ① China will enter and bind international car companies such as Tesla, Volkswagen and others like Tesla, Volkswagen and other international car companies such as Tesla, Volkswagen and others, and companies in the supply chain of new forces for car making, such as Tianjin You Fa Steel Pipe Group Stock Co.Ltd(601686) 01689 \ ( Zhejiang Yinlun Machinery Co.Ltd(002126) ) Wencan Group Co.Ltd(603348) Wencan Group Co.Ltd(603348) ）； ② Enterprises that enter the leading supply chain of power batteries such as Contemporary Amperex Technology Co.Limited(300750) , Freddy battery, lgenergysolution and Panasonic, such as Wuxi Lead Intelligent Equipment Co.Ltd(300450) ( Wuxi Lead Intelligent Equipment Co.Ltd(300450) ), Shanghai Putailai New Energy Technology Co.Ltd(603659) ( Shanghai Putailai New Energy Technology Co.Ltd(603659) ), Yunnan Energy New Material Co.Ltd(002812) ( Yunnan Energy New Material Co.Ltd(002812) ). ③ Independent automobile enterprises that are expected to continuously improve their technology and stand out in the fierce competition, such as Byd Company Limited(002594) ( Byd Company Limited(002594) ) and Yutong Bus Co.Ltd(600066) ( Yutong Bus Co.Ltd(600066) ).
3) in terms of smart cars, we believe that with the joint active promotion of car enterprises, technology giants and new forces in car manufacturing, from the medium and long-term perspective, the sales and penetration of global and Chinese smart Internet connected vehicles are expected to rise rapidly. This year, many high-end smart models in China are expected to be launched one after another (pay attention to this year’s Beijing auto show), and the industry is expected to achieve a qualitative breakthrough from L2 to L3, The intelligent driving market has entered a period of accelerated development. It is suggested to pay attention to two main lines: 1) Huawei’s intelligent vehicle industry chain targets, such as Chongqing Changan Automobile Company Limited(000625) ( Chongqing Changan Automobile Company Limited(000625) . SZ), Baic Bluepark New Energy Technology Co.Ltd(600733) ( Baic Bluepark New Energy Technology Co.Ltd(600733) . SH), Guangzhou Automobile Group Co.Ltd(601238) ( Guangzhou Automobile Group Co.Ltd(601238) . SH), etc; 2) At the perception level, the demand for cameras, millimeter wave radar, lidar and other sensors and intelligent lamps will continue to increase; Meanwhile, the penetration rate of smart cockpit / smart chassis (including air suspension, brake by wire, electric steering, lightweight chassis and integrated die casting technology) will continue to increase. It is recommended to pay attention to Huizhou Desay Sv Automotive Co.Ltd(002920) ( Huizhou Desay Sv Automotive Co.Ltd(002920) ), Changzhou Xingyu Automotive Lighting Systems Co.Ltd(601799) ( Changzhou Xingyu Automotive Lighting Systems Co.Ltd(601799) ), Keboda Technology Co.Ltd(603786) ( Keboda Technology Co.Ltd(603786) ), Shanghai Baolong Automotive Corporation(603197) ( Shanghai Baolong Automotive Corporation(603197) ), Foryou Corporation(002906) ( Foryou Corporation(002906) ), Ningbo Tuopu Group Co.Ltd(601689) ( Ningbo Tuopu Group Co.Ltd(601689) ).
Risk warning: policy fluctuation risk; Risk of chip shortage; The recovery of automobile production and sales was less than expected; The production and sales of new energy vehicles are less than expected; Price rise of raw materials and exchange rate risk; The global covid-19 pneumonia epidemic control was less than expected.
