Industry status
Last week (March 7-march 11), the CSI 300 index fell – 4.2%, the A-share auto sector – 4.8%, underperforming the market by 0.6ppt, and the auto parts sector – 5.2%, underperforming the market by 1.0pt.
Commentary
Pay attention to the low absorption opportunities under the historical undervalued value of the sector, rebound and buy long-term varieties. The Federation of passenger cars released the production and sales data in February: the retail / wholesale / output of passenger cars in a narrow sense was 124.6/145.5/1.492 million, with a month on month ratio of – 40% / – 32.6% / – 27.0%. Retail sales fell significantly month on month. Although affected by the Spring Festival, it still caused the market to worry about the demand side. We believe that we still need to continuously track the data in March to judge the tolerance of the market scene. Since 2022, the profit forecast of some leading enterprises has been significantly reduced, which we believe has reflected the market’s expectation of demand and upstream price rise. Combined with the marginal changes looking forward, we believe that the current low valuation level of the sector provides medium and long-term buying points: 1) stable demand and low inventory ensure that the landscape is supported, which is conducive to the development of structure and growth; 2) In the face of the shortage of batteries and chips, the scarce resources are inclined to electric intelligent vehicles, the penetration is still accelerated, and the prosperity of subdivided tracks continues; 3) After systemic risk release, the valuation obstacles restricting capital allocation were removed. We predict the follow-up catalyst: the sales data in March stabilized, the battery price negotiation, the chip shortage slowed down, and it is expected to restart the performance and valuation repair after the profit expectation in 2022 is established.
The ideal L9 interior decoration was officially released, and the ideal valuation difference is expected to converge throughout the year. The initial design price of the SUV is 450000 yuan in Beijing auto show, and it is the ideal SUV in 20292023. From the current exposure design, the ideal L9 demonstrates the hard core technology in the field of intelligent cockpit with innovative five screen interaction, three-dimensional space interaction and a computing platform equipped with two Qualcomm 8155 chips. In addition, the detailed design of incubator and roof skylight further highlights the company’s accurate insight into the needs of target families and increases the attractiveness of products. We believe that the ideal L9 locates family users, defines models based on needs, and covers a wider range of users. It is expected to continue to significantly surpass more than 400000 SUV fuel models with the insight into consumer needs and product polishing ability internalized on the ideal one. We estimate that the ideal L9 broad market space can be expanded to 900000 vehicles a year, which is expected to achieve steady-state sales of more than 10000 vehicles next month. The subsequent performance of listing and delivery in September is expected to make the market more fully aware of the ideal strong product gene and accurate product insight, and drive the narrowing of the valuation difference between ideal and other new car making forces.
Valuation and recommendations
Suggestions: 1) heavy trucks: Weichai Power Co.Ltd(000338) a / h, Sinotruk Jinan Truck Co.Ltd(000951) a / h, Weifu High-Technology Group Co.Ltd(000581) , Aofu Environmental Technology Co.Ltd(688021) (not covered); 2) Head independent vehicle and new power vehicle enterprises: Xiaopeng, ideal, great wall, Chang’an and Geely; 3) Electric Intelligence: Shanghai W-Ibeda High Tech.Group Co.Ltd(688071) , Suzhou Sonavox Electronics Co.Ltd(688533) , Changzhou Xingyu Automotive Lighting Systems Co.Ltd(601799) , Shinry Technologies Co.Ltd(300745) (uncovered), etc; 4) Parts: Tianrun Industry Technology Co.Ltd(002283) , Anhui Zhongding Sealing Parts Co.Ltd(000887) ; 5) Power exchange equipment: Suzhou Harmontronics Automation Technology Co.Ltd(688022) , Shandong Weida Machinery Co.Ltd(002026) ; 6) Motor: Wuxi Longsheng Technology Co.Ltd(300680) , Tongling Jingda Special Magnet Wire Co.Ltd(600577) (uncovered), Jee Technology Co.Ltd(688162) .
Risk
Chip supply eased less than expected, and the epidemic repeatedly affected automobile production and sales.
