Key investment points:
Investment suggestions: 1) complete vehicles and parts: in February 2022, China’s automobile sales volume was 1.737 million, with a year-on-year increase of 18.7%. From January to February, the cumulative sales volume was 4.268 million, with a year-on-year increase of 7.5%. Restricted by the repeated local epidemic and the rise of oil prices, the sales volume of traditional Chinese automobiles was under pressure in the short term. We believe that with the mitigation of chips and the improvement of the epidemic, the demand for automobiles is expected to be further released. According to the experts at the recent electric vehicle hundred people’s meeting forum, L2 automatic driving has realized large-scale commercial application. Because the automatic braking system (AEB) can significantly reduce traffic accidents, mature technology and low cost, it is suggested to make AEB standard. With the development of autopilot, more ADAS is expected to be widely applied. 2) New energy vehicles: in February 2022, the sales volume of new energy vehicles was 334000, with a year-on-year increase of 184.3%. From January to February, the cumulative sales volume was 765000, with a year-on-year increase of 154.7%. Xin Guobin, Vice Minister of the Ministry of industry and information technology, said at the forum of China electric vehicle hundred people’s Congress that he would pay high attention to the price rise of raw materials for power batteries, and mentioned that he would moderately accelerate the progress of China’s resource development, resolutely crack down on unfair competition such as hoarding and speculation, guide upstream and downstream enterprises in the industrial chain to strengthen cooperation, win-win development and promote the return of the price of key raw materials to rationality. The rise in the price of raw materials has led car companies to continuously increase the price of models, which has aroused the concern of the market about the pressure on the demand side. With the reasonable guidance of the policy side and the smooth development of upstream resources, it is expected that the price of raw materials will gradually return to rationality. In the medium and long term, the new energy vehicle industry is still worthy of special attention.
Market review: last week, the automobile (Shenwan) industry index fell 1.36%, outperforming the Shanghai and Shenzhen 300 index by 0.78 percentage points. Among them, the rise and fall of key subdivided industries in the week were – 1.49% for passenger cars, – 0.78% for commercial vehicles and – 1.62% for auto parts. The new energy vehicle index fell 3.38%, underperforming the CSI 300 index by 1.24 percentage points. Among them, the rise and fall range of key sub industries in the week was – 4.91% for power battery, – 2.02% for lithium positive electrode, – 3.84% for lithium negative electrode, – 2.51% for lithium diaphragm and – 4.44% for electrolyte.
Industry trends: 1) Xin Guobin, Vice Minister of the Ministry of industry and information technology, will pay close attention to the price rise of raw materials for power batteries; 2) The United States resumed tariff exemption for some Chinese goods and benefited from a small number of auto parts; National Development and Reform Commission: 3) no new production capacity will be added until the existing base of new energy vehicles reaches a reasonable scale.
Company dynamics: 1), Iat Automobile Technology Co.Ltd(300825) : Announcement on signing cooperation agreement; 2) Changzhou Xingyu Automotive Lighting Systems Co.Ltd(601799) : annual report for 2021; 3) Annual report; 4) Hunan Changyuan Lico Co.Ltd(688779) : voluntary disclosure announcement of performance forecast for the first quarter of 2022.
Risk factors: the sales volume of vehicles is lower than expected, the sales volume of new energy vehicles is lower than expected, and the policy is lower than expected.
