Industry core view:
In 2021, even under the adverse factors such as lack of core and rising raw material prices, the performance of the automobile industry still grew well, among which the passenger car and auto parts industry performed better. In the first quarter of 2022, due to the Ukrainian Russian war, China’s epidemic and other factors, the performance of the automobile industry temporarily declined. It is expected that with the normalization of China’s epidemic prevention and control and the introduction of local consumption stimulating policies, the automobile industry is expected to improve gradually. Key investment points:
The performance in 2021 was good, and the growth rate of revenue and net profit reached a new high in recent three years. The performance was temporarily under pressure in the first quarter of 2022 due to factors such as the epidemic. In 2021, the automobile (SW) industry achieved a total operating revenue of 313588 billion yuan, a year-on-year increase of 13.5%, and the net profit attributable to shareholders of listed companies was 91.62 billion yuan, a year-on-year increase of 22.6%. The growth rate of revenue and net profit reached a record high in recent three years. On the one hand, the base affected by the epidemic in 2020 was low, on the other hand, the lack of core gradually eased, The steady growth of automobile production and sales volume promotes the obvious recovery of the income side and effectively suppresses the impact of the rise in the price of raw materials at the cost side, thus improving the profitability of the industry as a whole. The industry’s quarterly revenue generally showed a slowdown trend, which was mainly affected by the shortage of chips. Among them, the revenue in the fourth quarter was 13.0% year-on-year, mainly due to the obvious year-on-year recovery of production and sales in the fourth quarter after the core shortage was alleviated. In the first quarter of 2022, the automobile (SW) industry achieved a total operating revenue of 745.51 billion yuan, a year-on-year increase of – 3.6%, and the net profit attributable to the shareholders of listed companies was 26.25 billion yuan, a year-on-year increase of – 16.2%. Due to the temporary pressure of the Ukrainian Russian war and epidemic factors, it is expected that the follow-up is expected to improve gradually.
In 2022q1, the positions of public offering institutions decreased slightly and were in the state of low allocation. In 2022q1, the total market value of the public fund’s position in the automotive industry was 64.03 billion yuan, accounting for 2.7%, down 1.07 percentage points from Q4 of last year. The allocation proportion of the public fund to the automotive industry ranked 11th in Shenwan industry, and the individual stock positions were relatively scattered. However, it was relatively optimistic about high-quality independent passenger vehicles and parts companies with high prosperity and steady growth in subdivided industries, such as Byd Company Limited(002594) , Sailun Group Co.Ltd(601058) , Fuyao Glass Industry Group Co.Ltd(600660) , etc, Among them, the shares with heavy positions such as Byd Company Limited(002594) , Sailun Group Co.Ltd(601058) respectively accounted for 29.6% and 7.7% of the positions in the automotive industry, and the individual shares with more increase in quarterly holdings were Sailun Group Co.Ltd(601058) , Great Wall Motor Company Limited(601633) , Ningbo Huaxiang Electronic Co.Ltd(002048) , Ningbo Tuopu Group Co.Ltd(601689) , etc.
Investment suggestions: we believe that the impact of the epidemic is expected to weaken, there are signs of an inflection point in the price of raw materials, and local governments have successively issued policies to stimulate automobile consumption. It is expected that the investment opportunities in the automobile industry will increase significantly. It is suggested to focus on the following sectors: (1) the passenger car sector, and the recovery of passenger car production and sales is expected to drive the performance of passenger car enterprises; (2) High quality parts suppliers in subdivided fields. Compared with downstream vehicles, parts companies have stronger toughness and higher growth. With the recovery of vehicle production and sales, the order volume of parts companies is expected to continue to grow. At the same time, they are facing the industrial reform of “new four modernizations” in the medium and long term. High quality parts companies with forward-looking layout of growth tracks are in the harvest period. It is suggested to choose lightweight, electric, intelligent Netlink is a high-quality parts company of high prosperity track.
Risk factors: the production and sales of cars are lower than expected, the shortage of chips is intensified, the price of raw materials is rising sharply, and the epidemic situation in China is spreading.
