Core view
Resume the industry market trend in 2020. In 2020, the covid-19 epidemic in China had an obvious impact on the automobile industry, resulting in the rapid decline of the automobile industry index. After the epidemic gradually stabilized, the automobile industry index rebounded to a certain extent. When the epidemic has not been fully controlled, the index began to hit the bottom and rebound first, outperforming the Shanghai and Shenzhen 300 index; Then, when the epidemic situation was effectively controlled, it slightly lost the CSI 300 index; In the second half of the year, with the release of restraining demand, the industry outperformed the CSI 300 index as a whole; And performed significantly in the fourth quarter. Among the sub industries, the passenger car index performed better than the parts sector index.
Resume the performance of passenger car demand in 2020: the demand for medium and high-end vehicles recovers ahead of low-end vehicles. In January 2020, covid-19 epidemic appeared, and the sales of passenger cars fell sharply. With the control of the epidemic and the effective promotion of the resumption of work and production all over the country, coupled with the continuous launch of consumption promotion policies, the demand for car purchase began to release after the epidemic. In April, the wholesale sales of narrow passenger cars decreased slightly by 2.2% year-on-year, and the year-on-year decline narrowed significantly; From July to December, the year-on-year growth rate of wholesale sales of narrow passenger vehicles in China was greater than 5%. In terms of quarters, it only had a temporary impact on China’s passenger car market in the first quarter, and the passenger car market has entered a stage of restorative growth since the second quarter. Since April 2020, the sales of foreign-funded and joint venture brand passenger cars have recovered rapidly. Compared with foreign-funded and joint venture brands, the sales of independent brand passenger cars have recovered slowly after the epidemic. It is expected that the decline in purchasing power of low-income people after the epidemic is greater than that of middle and high-income people, resulting in a relatively slow recovery in the demand for independent brand passenger cars.
In the second quarter of this year, the marginal improvement of the external business environment of parts and components. After entering the second quarter, the margin of the external business environment of Chinese parts companies has improved, and the pressure on the profit side has decreased: in the second quarter, the prices of major bulk raw materials such as copper and aluminum have successively entered the downward channel since April, which is conducive to the improvement of the cost side of parts companies; In the second quarter, the international shipping price continued to decline, and the freight pressure of export parts companies decreased; Since mid April, the RMB has continued to depreciate sharply against the US dollar, which is good for the exchange earnings of export parts companies; In the long run, the depreciation of exchange rate will also enhance the cost advantage of export parts companies, which is conducive to the company to develop more overseas customers and orders.
Demand analysis of passenger car industry after epidemic control. From March to April this year, the covid-19 epidemic in China was repeated again. Under the control of the epidemic, the automobile industry chain in Shanghai, Jilin and other provinces and cities was at a standstill, and the supply and demand sides of the automobile industry suffered a serious impact. With the gradual improvement of the epidemic situation in Shanghai, Jilin and other places, it is expected that the supply and demand of passenger cars will gradually enter the recovery stage. It is expected that from May to July, the production capacity supply of foreign-funded and joint venture brand car enterprises is expected to gradually return to normal. With the recovery of the purchasing power of middle and high-income people, the superimposed car enterprises will accelerate the production pace in order to make up for the loss of production and sales from March to April. It is expected that the sales volume of foreign-funded and joint venture brand passenger cars is expected to pick up first, and the demand of medium and low-end brands is expected to pick up later than that of medium and high-end brands. If the macro economy recovers gradually in the second half of the year, the sales volume of the passenger car industry is expected to improve gradually.
Investment proposal and investment object
From the perspective of investment strategy, it is expected that after the epidemic is controlled, the industry demand will gradually improve. It is expected that the demand for medium and high-end passenger vehicles will be relatively less affected and is expected to recover before the demand for medium and low-end vehicles; With the decline of costs, the depreciation of RMB and the decline of shipping prices, we continue to be optimistic about Tesla industrial chain and export industrial chain parts companies, and some vehicle companies that underestimate the value. Suggestions and concerns include the following: the ‘ Jiangsu Xinquan Automotive Trim Co.Ltd(603179) \ , Saic Motor Corporation Limited(600104) etc.
Risk tips
The macroeconomic downturn affected the demand for automobiles, the rise of upstream costs exceeded expectations, and the impact of the epidemic exceeded expectations.
