Key investment points:
Market review: as of May 20, 2022, Shenwan auto sector rose 4.42% in the week, outperforming the Shanghai and Shenzhen 300 index by 2.19 percentage points and ranking fourth among Shenwan 31 industries. All five sub sectors of Shenwan automobile industry rose, as follows: commercial vehicle sector rose 9.63%, passenger vehicle sector rose 5.78%, motorcycle and other sectors rose 4.38%, automobile service sector rose 3.54% and auto parts sector rose 2.98%. The shares of the company rose by 32.7% and and 35. The top three companies with weekly declines were Guangzhou Tongda Auto Electric Co.Ltd(603390) , Nanjing Aolian Ae&Ea Co.Ltd(300585) , Ningbo Shuanglin Auto Parts Co.Ltd(300100) , with declines of 12.53%, 8.13% and 6.12% respectively. In terms of valuation, as of May 20, the pettm of Shenwan automobile sector was 29 times, which was at the quantile of 84% in recent five years and 91% in recent ten years; In terms of sub sectors, the pettm of automobile service sector is 20 times, that of auto parts sector is 26 times, that of passenger car sector is 33 times, and that of commercial vehicle sector is 22 times.
Key industry news: on May 20, Xin Guobin, Vice Minister of the Ministry of industry and information technology, went to China Automobile Circulation Association to investigate the automobile industry chain. Xin Guobin stressed that first, we should actively promote consumption, pay close attention to the study of policies and measures to stabilize and expand automobile consumption, continue to strengthen the promotion and application of new energy vehicles, accelerate the recovery of automobile consumption, stimulate supply with demand and realize a virtuous circle. Second, we should make every effort to stabilize production, continue to play the role of smooth coordination platform and central local linkage mechanism, continue to improve the “white list” system, promote the collaborative resumption of work and production of upstream and downstream vehicles, strengthen the guarantee of supply of automobile chips and the price stabilization of bulk raw materials, and make every effort to ensure the smooth and stable supply chain of the industrial chain.
Auto industry weekly view: the auto sector continues to rise this week and has closed up for three consecutive weeks. Shanghai’s auto industry is accelerating the full resumption of work and production, and the bottom of auto production and sales was established in April. Many ministries and commissions have made great efforts to promote automobile consumption, and measures to promote consumption such as car purchase subsidies and relaxation of purchase restrictions have been introduced one after another. As one of the key supporting industries for the country to achieve the expected goal of stable growth, the automobile industry is expected to meet the restorative growth of subsequent production and sales. The recent sharp fluctuation of RMB exchange rate is also conducive to the enhancement of the profitability of export business. Plate fundamentals and valuations are expected to continue to repair. It is suggested to pay attention to: Saic Motor Corporation Limited(600104) ( Saic Motor Corporation Limited(600104) ), Weichai Power Co.Ltd(000338) ( Weichai Power Co.Ltd(000338) ), Ningbo Tuopu Group Co.Ltd(601689) ( Ningbo Tuopu Group Co.Ltd(601689) ), Wencan Group Co.Ltd(603348) ( Wencan Group Co.Ltd(603348) ), Bethel Automotive Safety Systems Co.Ltd(603596) ( Bethel Automotive Safety Systems Co.Ltd(603596) ), Huayu Automotive Systems Company Limited(600741) ( Huayu Automotive Systems Company Limited(600741) ).
Risk warning: the automobile production and sales volume is lower than the expected risk; Repeated outbreaks lead to uncertainty risks such as shutdown or reduction of orders; Risk of sharp rise in raw material prices; Chip shortage mitigates the risk that it is less than expected.
