Key investment points:
Zhou’s view update: on December 31, the four ministries and commissions issued the notice on the financial subsidy policy for the promotion and application of new energy vehicles in 2022, which requires that the subsidy standard for new energy vehicles in 2022 be reduced by 30% on the basis of 2021. The decline was clearly mentioned in the new energy vehicle subsidy notice issued in April 2020. Therefore, many consumers buy lock-in concessions in advance and have certain psychological expectations for the rise of vehicle prices in the future. We believe that the new energy vehicle market has changed from policy driven to market driven. In the face of strong downstream demand, the decline of subsidies has a limited impact on the overall market growth of new energy vehicles, and the overall new energy vehicles will still show steady growth in the future.
On December 31, the rear drive versions of Tesla Model 3 and model y announced price increases. After the price rise, the model y rear drive version will no longer enjoy state subsidies. Considering the soaring price of raw materials, the shortage of chips, the tight supply of power batteries and the shortage of manpower caused by the epidemic this year, the price adjustment is an inevitable result. Tesla has adjusted prices in China many times this year, but downstream demand is still strong, and sales have not been significantly affected. Therefore, we believe that in the environment of generally rising automobile production costs and generally increasing vehicle prices, Tesla can better deal with the impact of price adjustment on downstream demand with its outstanding brand strength and product strength. This price adjustment will not put too much pressure on Tesla’s sales volume.
Industry rating and investment strategy: maintain the “recommended” rating of the automotive industry. Optimistic about the continued growth of the automobile market. 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.
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, Shanghai A-share, Shenzhen A-share and Shanghai Shenzhen 300 rose and fell by 0.85%, 1.88% and 0.30% respectively. The rise and fall of automobile plate was – 1.30%, ranking the 28th among 30 industries and the downstream 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 – 1.07%, – 0.13%, – 2.21%, 0.45% and 2.15% respectively. 3) Top five stocks in terms of rise and fall: from the perspective of individual stocks, the top five companies in the industry this week are Zhejiang Xiantong Rubber & Plastic Co.Ltd(603239) , Liaoning Sg Automotive Group Co.Ltd(600303) , Zhejiang Changhua Auto Parts Co.Ltd(605018) , Ningbo Heli Technology Co.Ltd(603917) , Zhejiang Cfmoto Power Co.Ltd(603129) , with an increase of 10.62% / 9.81% / 8.94% / 8.78% / 6.72% respectively. The top five companies with declines were Shandong Gold Phoenix Co.Ltd(603586) , Hunan Tyen Machinery Co.Ltd(600698) , Harbin Viti Electronics Corp(603023) , Winbo-Dongjian Automotive Technology Co.Ltd(300978) , Nanjng Yueboo Power System Co.Ltd(300742) , with declines of – 20.55% / – 19.44% / – 18.99% / – 17.76% / – 16.89% respectively.
Industry highlights: 1) the negative list of foreign capital access in 2021 was released, and the share ratio of foreign capital in passenger car manufacturing was restricted and open; 2) In 2022, the subsidy standard for new energy vehicles will decline by 30% on the basis of 2021; 3) The exclusive insurance for new energy vehicles was officially launched; 4) A number of Japanese car companies started the layout of automatic driving.
Key company dynamics: 1) Tesla recalled 500000 model s and model 3 in the United States, and the price of products increased significantly at the end of the year; 2) Geely and Foxconn established fujikang company, and the “professional automobile OEM” was launched; 3) Great Wall Motor Company Limited(601633) signed a strategic investment agreement with Tongguang to officially enter the third semiconductor core industry. Euler makes further concessions on the “chip gate”, and the charging equity of 10000 yuan can be discounted;
4) Ideal automobile Shunyi 100000 capacity plant project was launched and officially put into operation in 2023; 5) DPCA completed the annual sales target of 100000 vehicles ahead of schedule.
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.
