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Strong growth momentum of auto parts sector


The performance of the auto sector was relatively strong. Not only did the individual stocks such as FAW sedan and FAW Xiali, which were integrating business, continue to rise and fall, but also the individual stocks such as SAIC Group, which benefited from the stimulation of auto consumption policies, broke through the bottom. On the whole, the performance of the auto sector this week is quite active. Stimulated by the news, it is expected to become a new strong stock cradle in the A-share market in the medium and short term.

Passenger car or current performance bottom point

Some analysts pointed out that the decline of passenger cars in March was significantly narrowed, and the auto industry was likely to usher in a recovery inflection point. The reasons given were: first, the tax effect appeared. Since April 1, 2019, the value-added tax rate has been reduced, and the tax avoidance effect has stimulated the wholesale end to increase the volume in March, which has suppressed the retail end. Some auto companies consider that the de-stocking of the 6th National Day switch will also have an impact on both the wholesale and retail ends. With the weakening of the tax avoidance effect, the supply side will slow down, which is conducive to easing the pressure on the retail side. Moreover, with the reduction of value-added tax, some auto companies will reduce the retail price, thus stimulating consumption.

Second, the consumption stimulus policy is expected to be introduced. According to media reports, the General Office of the National Development and Reform Commission recently issued a letter on soliciting opinions on the Implementation Plan for Promoting Renewal Consumption of Automobile, Home Appliances and Consumer Electronics and Promoting the Development of Circular Economy (2019-2020) (Draft for Comments). It is proposed to prohibit local governments from issuing new policies on automobile purchase restriction, and at the same time, it is planned to require cities that have issued such measures to change the policies to guide the use of automobiles. At the regular press conference held on Thursday, the National Development and Reform Commission said that it is learning about the relevant situation, and all the policies have come out after repeated argumentation and full solicitation of opinions from relevant parties. From its expression, it shows that the probability of introducing policies to stimulate automobile consumption in the future is very high, The market capacity of passenger cars is expected to expand rapidly. If we take into account the decline of value-added tax and other factors, the turning point of profit for passenger car manufacturers can be expected.

More clear opportunities for heavy trucks and new energy vehicles

In the context of the convergence of the decline in passenger car sales, the business highlights of the relevant segments in other fields of automobile are more prominent.

Heavy truck. In March, 149000 heavy trucks were sold, up 7.1% year on year; The sales of natural gas heavy trucks in March were 9569, up 326.5% year on year, which became the main factor supporting the growth of heavy truck market. Some insiders speculate that the sales of heavy trucks in 2019 is expected to reach about 1 million vehicles, driven by multiple factors such as infrastructure upgrading and environmental protection upgrading. Judging from this, the performance of relevant individual stocks in the heavy truck industry chain is expected, and the performance of Weichai Power, Weifu Hi-Tech and other individual stocks may further increase.

New energy vehicles. In March, 126000 new energy vehicles were sold, with a year-on-year increase of 85.4%. Among them, new energy passenger vehicles increased by 92.6%, and commercial vehicles increased by 16.1%. According to the data of the Passenger Federation, in March 2019, pure electric passenger vehicles A00, A0, and Class A increased by - 18%, 461%, and 392% respectively. Class A vehicles became the main force of sales, with strong growth momentum. Driven by policy guidance and market demand, the product upgrading effect was outstanding. BYD, BAIC New Energy Geely's sales of new energy passenger vehicles ranked the top three, and the sales of new energy passenger vehicles of Great Wall Motors, Chang'an Motors and Huatai Motors also achieved rapid growth in March.

It is against the background of the policy of subsidizing and declining the new energy vehicles that the new energy passenger vehicles can achieve such a huge growth rate, which shows that the penetration rate of new energy passenger vehicles is accelerating. It is expected that with the further improvement of the endurance capacity in the future and other factors, China's new energy vehicles will have a broader development space, which is obviously beneficial not only to the performance growth of relevant listed companies in the new energy vehicle industry chain, but also to the post-service market of new energy vehicles, such as the development of the charging industry chain.

Strong growth of parts sector

Of course, as far as China's automobile industry is concerned, the competitive advantage of the whole vehicle manufacturing industry has not yet been fully reflected. This is not only reflected in the fact that the engine technology level of core components is still far from the world's advanced level, but also in the brand influence, there is still a long way to go. In general, in the field of passenger vehicles, in the context of the slowdown in the growth of the industry's capacity, it is difficult to make significant progress in the short term, while heavy trucks and new energy vehicles have certain investment opportunities due to the rapid growth of the market.

It should be noted that the growth momentum of listed companies related to China's auto parts industry chain is strong, because the advantage of industrial scale promotes China's listed parts companies to successfully enter the global vehicle supply chain, such as Fuyao Glass, Weifu Hi-Tech, Huayu Automobile, FAW Fuwei, Dongmu, Yunhai Metal, Xingyu, and other varieties, among which Fuyao Glass has become a large company at the global level. At the same time, the increase in the penetration rate of smart cars, the promotion of the Internet of Vehicles, and the increase in the penetration rate of new energy powered vehicles are all opportunities for China's automobile parts to overtake at corners, and also opportunities for China's automobile manufacturing industry to catch up with global peers. Recently, Huawei and other leading intelligent manufacturing enterprises have said that they will enter the field of automobile manufacturing, which shows our country's ambition to transform traditional cars with intelligence. This has injected a steady stream of growth momentum into the relevant listed companies in the field of automotive consumer electronics and the Internet of Vehicles. The future development momentum of such individual stocks is more sufficient and investment opportunities are clearer.

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