Vehicle Outlook: return to growth. In 2021, China produced and sold 26.082/26.275 million vehicles, with a year-on-year increase of + 3.4% / + 3.8% respectively, ending the decline for three consecutive years. The sales volume of new energy vehicles was 3.521 million, a year-on-year increase of 158%, the new energy penetration rate reached 13.4%, a year-on-year increase of 8.5pct, and the sales volume exceeded 500000 in December. At the same time, double integral accelerates the hybrid process of fuel vehicles, and PHEV + HEV increases at a high speed. The structure of car series has been reshaped, the rise of independent brands has accelerated, and the share has increased by 5.8pct to a record high of 44% year-on-year. Independent car enterprises are also improving their brands through high-end new energy products. SUV sales accounted for a record high of 48.2%. The launch of medium and high-end MPV models has accelerated, opening a new round of growth cycle of MPV, and the MPV market is expected to rebound. Although the terminal discount continues to narrow, the impact of price increase on sales is limited. We believe that the core shortage situation will continue to improve month on month in 2022, and the passenger car market will usher in a new upward cycle. The demand for additional replacement has become the main force of the car market, especially in high growth segments such as new energy vehicles and luxury cars. It is estimated that China’s automobile sales volume will be 27.8 million in 2022, with a year-on-year increase of about 6%. Among them, the sales volume of passenger cars was 23.4 million, a year-on-year increase of about 9%; The sales volume of commercial vehicles was 4.4 million, a year-on-year decrease of about 8%. It is estimated that the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) vehicles in 2022 will be 5.6 million, with a year-on-year increase of about 60%, and the industry will enter the market driven stage. In 2022, Byd Company Limited(002594) is expected to become the first private independent sales volume, and Tesla China’s sales volume will become the first in China’s luxury car market.
Prospect of new energy vehicles: accelerating the penetration of electrification. The penetration rate of new energy vehicles increased from 2.4% in January 2020 to 19% in December 2021. In December 2021, the penetration rate of new energy vehicles among independent brands / luxury cars / mainstream joint venture brands was 39% / 32.7% / 3.3% respectively. The market features are dumbbell shaped: the proportion of new energy pure electricity A00 / A0 and class B has increased significantly. The penetration rate of class A is low, and the proportion of class a vehicles in PHEV sales increases rapidly, which is expected to become a substitute for fuel vehicles. Tesla: domestic monthly sales exceeded 70000, and modely sales grew rapidly. We predict that Tesla will have a global production capacity of 2.1/2.9 million vehicles and a sales volume of 1.74/2.64 million vehicles in 2022 / 2023. Byd Company Limited(002594) : the sales volume reached a record high in 2021, and DM-I made popular models in batches. It is expected to be the first in 2022, with an estimated sales volume of 1.49 million. The sales volume of new forces at the head will grow rapidly. It is expected that the ideal sales volume of Weilai / Xiaopeng / will be 17 / 20 / 180000 vehicles respectively in 2022, the scale effect will begin to appear, and the gross profit margin will continue to increase.
Prospect of commercial vehicles: the truck market is becoming more and more stable, and the bus market needs to recover. The road freight volume recovered, the express business continued to improve, and the growth foundation of truck sales was consolidated. The overload control has become stricter, the single vehicle load has decreased, boosting the sales growth, and the truck sales still have a large space for a long time. The bus ownership continues to grow with the improvement of operating lines, and the renewal demand is released rapidly. We expect that in 2022, the high-level automatic driving scene of commercial vehicles will be accelerated, the demonstration application of fuel cell vehicles will be fully promoted, carbon neutralization will be promoted, the penetration rate of new energy trucks will continue to increase, and the bus market will usher in recovery.
Parts Outlook: the future of Tesla industrial chain α， Intelligent vehicle β。 From Q1 to Q3 in 2021, the price of raw materials and freight increased, resulting in a continuous decline in the gross profit margin of parts. Since 2010, the gross profit margin of auto parts has not declined for more than three consecutive quarters. We believe that there will be marginal improvement in 2022. In 2021, Shanghai factory will be opened to more domestic suppliers, and all links of the supply system will be fully introduced into corner B. Tesla’s sales volume increased rapidly, and Tesla’s business income of the original a-corner supplier still increased significantly α， The performance of new suppliers in corner B is flexible. As the core supplier of Tesla industrial chain, ASP continues to grow. By enabling domestic suppliers with highly integrated solutions, Tesla continues to expand categories and enhance system integration capabilities, thus promoting the value of supporting single vehicles, which is just the opposite of the traditional OEM supply system. This trend will also be reflected in the reform of the supply system of new forces. Tesla manufacturing Revolution: 4680ctc + integrated die casting will promote Tesla wave in the next stage. We expect that Tesla will appear in batches in 2022: Tesla will become the largest customer and new forces will enter the domestic suppliers of Tesla industrial chain of the top five customers. With FSD, Tesla has taken the road from one-time manufacturing profits to service profits for users. The automotive industry is facing great changes in a century, and OEMs are making all-round changes to deal with the new business model in the era of intelligent electric. The NOA function redefines the smart car, and the switching from high-speed road to urban road scene will promote the historical process of L2 evolution to L3. From optional to standard configuration, it triggered an arms race for competitive products, hardware stacking and self-development of software algorithms, and domestic suppliers ushered in a historical opportunity.
The evolution of the top ten tracks in the three directions of intelligence, electrification and high-end has become the main driving force for the development of China’s automobile industry: first, intelligence will benefit from the trend of intelligent hardware stacking: arms race, lidar and high-power chips will become standard configurations for new models. 1. Intelligent driving (the demand for visual sensors and domain controllers is growing rapidly); 2. Intelligent cockpit (product definition and core configuration); 3. Brake by wire (penetration rate increases rapidly, and there is large space for domestic replacement). 2、 Electrification will benefit from CTC’s long endurance, integrated die casting, lightweight and fast charging trend: the endurance mileage continues to be upgraded, 800-1000km has become an important section, and 800V high-voltage fast charging. 4. Lightweight (integrated die casting trend); 5. Thermal management (ASP greatly improved); 6.800v electronic components (both volume and price of electronic components rise). 3、 High end will benefit from the upward trend of independent brands and leapfrog configuration: 7 Air suspension (low permeability, large growth space), 8 Interior decoration (luxury, continuous improvement of ASP), 9 Canopy glass (canopy leads the trend, and the volume and price of steam glass rise together), 10 Lights (technology continues to improve).
Industry rating and investment strategy: the of industrial change α， The tide of the times β。 In December 2021, the penetration rate of new energy vehicles increased to 19%, the automotive industry changed, the gross profit margin of Tesla and new forces continued to increase, and the performance of Tesla’s domestic suppliers generally increased rapidly; Tesla wave brings vehicle valuation revaluation, NOA function redefines, smart cars trigger an arms race, hardware stacking, and there is a large space for domestic substitution. Maintain the “recommended” rating of the automotive industry.
Three main lines are recommended:
Intelligent driving & Automotive Electronics: intelligent definition of automobile, arms race, hardware stacking, domestic substitution usher in historical opportunities. Recommend Bethel Automotive Safety Systems Co.Ltd(603596) , Huizhou Desay Sv Automotive Co.Ltd(002920) , Keboda Technology Co.Ltd(603786) , Foryou Corporation(002906) , Thunder Software Technology Co.Ltd(300496) , Xiamen Faratronic Co.Ltd(600563) , Wuhan Lincontrol Automotive Electronics Co.Ltd(688667) , and pay attention to Shanghai Baolong Automotive Corporation(603197) , Xi’An Sinofuse Electric Co.Ltd(301031) , Anhui Tongfeng Electronics Company Limited(600237) .
Tesla industrial chain & parts: Tesla manufacturing Revolution: 4680ctc + integrated die casting. Recommend Ningbo Tuopu Group Co.Ltd(601689) , Zhejiang Yinlun Machinery Co.Ltd(002126) , Ikd Co.Ltd(600933) , Huayu Automotive Systems Company Limited(600741) , Zhejiang Sanhua Intelligent Controls Co.Ltd(002050) , Changzhou Xingyu Automotive Lighting Systems Co.Ltd(601799) , Fuyao Glass Industry Group Co.Ltd(600660) , Ningbo Xusheng Auto Technology Co.Ltd(603305) , Ningbo Joyson Electronic Corp(600699) , Zhejiang Shuanghuan Driveline Co.Ltd(002472) , and pay attention to Wencan Group Co.Ltd(603348) , Huada Automotive Technology Corp.Ltd(603358) .
Vehicle: Tesla wave brings vehicle valuation revaluation & strong vehicle cycle OEM, recommend Byd Company Limited(002594) , Saic Motor Corporation Limited(600104) , Great Wall Motor Company Limited(601633) , and pay attention to Xiaopeng automobile, ideal automobile, Weilai, Yutong Bus Co.Ltd(600066) , Guangzhou Automobile Group Co.Ltd(601238) , Chongqing Changan Automobile Company Limited(000625) , Geely Automobile.
Risk warning: the recovery of epidemic situation is lower than expected; The price of raw materials and freight continue to rise; The demand growth of new energy vehicles is less than expected; Subsidies for terminal price increases; The development progress of automobile intelligence is less than expected; The high-end process of independent brands is blocked; The replacement progress of domestic parts is less than expected; The performance of the recommended company fails to meet expectations; The situation outside China is not completely comparable, and the relevant data and data of the benchmarking are only for reference.
