Guosen Securities: Focus on the rise of independent brands and incremental parts opportunities

Zhitong Finance APP learned that Guosen Securities released a research report that independent brands rely on the underlying technology and supply chain support of sandian, rapid research and development response and flexible incentive mechanism, and the business model of consumer goods, gradually replacing the strong position of joint ventures/foreign car companies in the minds of the Chinese people for a hundred years, with the great wall, BYD, Geely as the representative of the hybrid platform, with Weilai, Xiaopeng, Ideal, WM, Nezha, GAC Aeon, Geely Kr and other new forces / new brands to promote explosive products, sales will climb rapidly from 2021, In 2022, new models will continue to be launched, high growth will be planned in the medium and long term, and core autonomous vehicles and their industrial chains will face greater development opportunities. In terms of targets, Fuyao Glass (600660.SH), Bethel (603596.SH), Huayang Group (002906.SZ), Xingyu Co., Ltd. (601799.SH), Desay SV (002920.SZ), Keboda (603786.SH), Baolong Technology (603197.SH), Shenglan Co., Ltd. (300843.SZ), Linglong Tire (601966.SH), Camel Co., Ltd. (601311.SH), Sound electronics (688533.SH), etc.

Industry background: The automotive industry ushered in the era of science and technology, and the century-old automotive technology changes superimposed on the overall growth transition to maturity. Electrification, intelligence, networking to accelerate the development, electrification around the high energy density battery, all-in-one electric drive system, vehicle platform high voltage and other directions of upgrading, intelligent with the application of 5G technology, intelligent transportation and off-road coordination of new infrastructure into the demonstration, the level of automotive intelligence is improved, in 2022 is expected to be more equipped with lidar, domain controllers, with L2+ level models mass production (especially independent and new power brands). Google, Apple, Huawei and other deeply involved in car manufacturing, the century-old automobile transformation has accelerated, and electric, intelligent, and networked technologies have promoted the upgrading of cars from traditional means of transportation to intelligent mobile terminals, creating more demand. Tesla catfish effect, subverting the traditional car-making concept, promoting the reform of electronic and electrical architecture and business model, bringing about the revaluation of the industry valuation system, and the valuation of new car-making forces and traditional vehicles has risen.

Medium- and long-term outlook of the industry: The total volume of China's automotive industry has transitioned from the growth stage to the mature period, showing the characteristics of slowing growth, traditional overcapacity, intensified competition, and increased ownership. Electrification and intelligence bring structural development opportunities for the transformation and upgrading of traditional vehicles, and the industry switches between new and old kinetic energy. In the medium and long term, it is expected that the total production and sales of domestic automobiles will maintain an annualized compound growth rate of 2% in the next 20 years, of which new energy vehicles are expected to maintain an annualized compound growth rate of more than 20% in the next 10 years (157.5% in 2021, and it is expected to maintain a compound high growth rate of more than 50% in the next three years), and electric intelligent vehicles are the high-prosperity track in the automotive sector.

Industry review: The last round of automobile prosperity was high in 2015-2017 (benefiting from the purchase tax policy), the industry entered a downturn since 2018, the epidemic in 2020, the lack of core in 2021 led to the current inventory falling to a 3-year low, and in 2021, affected by the shortage of automotive chips, domestic automobile sales of 26.275 million vehicles (+3.8% year-on-year) were lower than the sales expectations at the beginning of the year. In 2022, under the background of chip mitigation, it is expected that the growth rate of domestic automobile sales is expected to reach +6% (including +10% for passenger cars and -10% for commercial vehicles), and new energy passenger vehicles will continue to maintain a high growth rate (3.52 million units in 2021, 5 million units in 2022).

Investment Ideas:

Direction of independent rise: Hybrid (BYD/Great Wall/Geely)/New Forces/Tesla/GAC Aean and its industrial chain. Incremental components: 1) The data flow direction pays attention to sensors, domain controllers, line control dynamics, air suspension, headlights, glass, car machines, HUDs, car audios and other links. 2) Energy flow direction: pay attention to power batteries, electric drive systems, small and medium-sized micro motor electronic control, IGBT, high voltage wiring harness and other links.

This article is from the WeChat public account of Xuxia in Guosen Automobile, authors: Tang Xuxia, Zhou Junhong, Zhitong Financial Editor: Yang Wanlin