Report summary
Several vehicle manufacturers confirmed the resumption time, which was longer than expected: as confirmed by all parties in the industrial chain, Tesla Lingang super factory will start work on the 18th and resume low-speed production. Weilai and SAIC successively announced that they will resume work and production in mid and late April. The following table shows the latest resumption time of main engine plants in Shanghai and Jilin. The industrial chain survey shows that the current capacity recovery is still a gradual resumption of low-power production, which is promoted step by step in combination with the resumption of parts enterprises. It is expected that the capacity before the epidemic will not be fully restored until mid May. However, although the supply and demand of Q2 is still weak, the resumption of work and production is a positive reversal signal for the sector, which also alleviates the further deterioration and spread of the shortage of core parts around Shanghai to vehicle enterprises in non epidemic areas to a certain extent. Returning to work ahead of schedule is a better boost to market sentiment.
The marginal effect of the automobile going to the countryside stimulus policy still needs to be seen: different from the obvious stimulus effect of the first automobile going to the countryside in 20092010, the subsequent series of automobile going to the countryside are mainly given certain concessions by automobile enterprises without national financial support. Combined with the fact that the car market has changed from increment to stock, in the traditional vehicle downward cycle, the marginal stimulation effect of a series of cars going to the countryside since 2019 on car sales is very limited (the contents and effects of previous stimulation are summarized in the table below). We believe that as an important economic pillar and damaged industry, automobile is more likely to launch stimulus in the future, and the specific policies are still worth looking forward to, which still plays a certain role in boosting the sentiment and valuation of the sector.
The sentiment of the sector bottomed out and the oversold was mainly repaired and rebounded: subject to concerns about the disturbance of production and sales of the epidemic, the automobile sector has fallen significantly in the past two weeks. Since the end of March, the automobile sector has fallen by nearly 7%, and the parts affected by the shutdown have been greatly affected. The PE valuation of automobile parts and complete vehicles has dropped to 21 times and 27 times (close to the level at the beginning of May last year). With the resumption of work and production, the mood bottomed out and the marginal improvement of Q3 month on month, which is expected to usher in a recovery rebound. However, it is worth noting that: first of all, the policy of going to the countryside by car has not been implemented. It is expected to only boost the mood, and there is no real EPS change. The impact of the epidemic on the economy and demand is still unclear. The annual production and sales are expected to be repaired. The performance of parts generally lags behind that of the whole vehicle for half a year. At present, the demand for the whole vehicle has not been clearly improved. Observing the historical valuation level of the whole vehicle and parts sector, the P / E ratio is still not at the bottom. Therefore, we believe that this round of rebound is a small-level valuation repair based on sentiment and oversold, and the inflection point of the large-scale recovery of the sector has not been really established.
Follow up view: some stocks rebounded sharply on Friday and overdrawn part of the oversold repair in advance. It is suggested to pay attention to the following main lines in the follow-up layout: PE is close to the historical bottom + the growth layout of the new track is stable. We choose from top to bottom: 1) PE (2022e) is close to the 5-year historical bottom; 2) There are many corrections in the early stage, and it is expected to recover month on month after the epidemic; 3) Better layout of new tracks and high growth downstream customers; 4) Stocks with medium or above compound growth rate expected by the market in the next two years. In addition, it is suggested to pay attention to the marginal repair of companies and sectors with low traditional oversold valuation.
