The upstream and downstream related enterprises in the automobile industry that previously suspended production due to the impact of the epidemic are now resuming production and resuming work.
According to China Galaxy Securities Research Institute, main engine factories and parts in Shanghai have gradually resumed work and production, and the unfavorable factors affected by the epidemic are alleviating and improving. Guojin Securities believes that the resumption of work and production in Shanghai's automobile industry exceeded expectations, and the bottom of the plate has emerged.
Several enterprises have resumed work and production one after another
On April 16, the Shanghai Municipal Commission of Economy and Information Technology issued guidelines for the prevention and control of the epidemic in industrial enterprises to resume work and production, proposing that all district governments, towns and parks should actively support enterprises to resume work and production, guide enterprises to "one enterprise, one policy", and effectively do a good job in epidemic prevention and control.
According to the Ministry of Industry and Information Technology, after the forward working group rushed to Shanghai, it conducted a mapping of key enterprises and foreign-funded projects that have been greatly affected by the epidemic, grasped the difficulties faced by production and operation, and found out the obstacles and obstacles to the resumption of work and production. Research and establish an emergency coordination mechanism for industrial chain supply chain appeals, set up a "white list" of key enterprises in the field of industry and informatization, and concentrate resources to prioritize the resumption of work and production of 666 key enterprises in key industries such as integrated circuits, automobile manufacturing, equipment manufacturing, and biomedicine.
(Source: Official website of Shanghai Municipal Commission of Economy and Information Technology)
The Shanghai Municipal Commission of Economy and Information Technology put forward 21 requirements in five major aspects: the implementation of the main responsibility of enterprises, the implementation of classified management of places, the strengthening of enterprise employee management, the strengthening of logistics management and epidemic prevention material reserves, and the preparation of emergency response plans and work guarantees, which clearly stated that enterprises should establish special classes for epidemic prevention and control and production and operation.
In terms of strengthening logistics management and epidemic prevention material reserves, the Shanghai Municipal Commission of Economy and Information Technology pointed out that for production and living materials entering the factory area, special routes and fixed places should be set up, and isolated from other areas, requiring supplier vehicle drivers and passengers to enter the factory area in strict accordance with epidemic prevention requirements. Arrange fixed personnel to receive, load and unload, store, unseal, disinfect, etc.
According to statistics, among the 666 enterprises on the first batch of white list, the number of automobile and automobile industry chain enterprises is the largest, a total of 251, accounting for 37.7%; followed by medical and medical enterprises, a total of 184, accounting for 27.6%; 83 semiconductor and integrated circuit enterprises, accounting for 12.5%; 66 energy and chemical enterprises, accounting for 10%; the rest there are 17 food and processing enterprises; and 9 aerospace enterprises.
On April 17, the Galaxy Securities Research Institute updated its views that the Shanghai region this week studied the establishment of an emergency coordination mechanism for industrial chain supply chain appeals, and set up a "white list" of key enterprises in the field of industry and informatization. The leading SAIC Motor group closed-loop production at its plant in Shanghai in mid-to-late March, and some plants were shut down in April. On the 18th, the stress test of resuming work and production began, and the unfavorable factors affected by this round of epidemic were gradually alleviated and improved.
On April 19, it was reported that Tesla's Shanghai factory would resume production on April 18. According to reports, the Financial Associated Press saw through drones that there were already employees dragging luggage inside the Tesla factory, while several employees were moving the frame of the Tesla Model 3, a small number of vehicles were traveling in the factory area, and the factory area was full of Tesla vehicles waiting for delivery. On the road around the factory, the reporter also found a flying bus with a special logo in motion. According to a Tesla supplier in the Lingang area, they are producing Tesla accessories under closed-loop conditions.
However, some insiders said that if upstream raw materials cannot be obtained in time, then it will take time for car companies to resume work and production to be smoothly realized. Economist Lang Xianping posted on his personal social account that "Shanghai's notice of gradually resuming work and production is a good signal, but there are not many people who meet the epidemic prevention conditions, and the problem of responsibility will make many enterprises retreat."
Galaxy Securities Research Institute pointed out that due to the long automotive industry chain and high coordination requirements, it is expected that the recovery of the supply chain and production end will gradually improve, and the production and sales of the automobile market in April will face certain pressure.
Resuming work and production concept stocks led the gains
Zhang Hongtao, chief engineer of the Shanghai Municipal Commission of Economy and Information Technology, said that Shanghai is an important industrial base and has a greater impact on the stability of the industrial chain supply chain.
According to the data, in 2021, the national automobile production will be 26.528 million units, of which Shanghai automobile production will account for about 2.83 million units of 10.7%. According to the data of new car traffic insurance, the cumulative sales of new cars in Shanghai in 2021 reached 736,700 units, an increase of 11.5% year-on-year.
Cui Dongshu, secretary general of the Association, said in a document that Shanghai's status in the national automotive industry is super high. Since the beginning of this century, SAIC, FAW, Dongfeng and the three major groups have maintained a relatively leading position. Saic Motor's leading position has always remained stable, because saic motor's Volkswagen and General Motors have large sales, the company's product consumption grade is relatively high, and the proportion of high-end joint ventures and luxury cars is relatively high, so it is also the national dominant position of Shanghai's automobile output value and industrial chain.
Because Shanghai's automobile industry is large enough, it is inevitable that it will bear the brunt of the epidemic. Chen Chuanhong, an analyst at Guojin Securities, believes that the epidemic has led to logistics and production card necks, affecting the entire automotive industry chain. The main OEMs in Shanghai are Tesla, SAIC Volkswagen, SAIC-GM and SAIC Passenger Vehicles, with a production capacity of 80/50/55/500,000 units in Shanghai, accounting for 10.5% of the total national production capacity. Affected by the epidemic, the sales of local car companies Tesla and SAIC Motor in Shanghai fell by more than 90% week-on-week last week (April 4 to 10). During the epidemic control period in Shanghai, some enterprises closed-loop production (such as Bosch, Aptiv, etc.), but Shanghai's sealing cut off the logistics system of the entire industrial chain, raw materials and finished products could not be effectively transported, affecting the entire industry's automobile production through the industrial chain, and the wholesale sales of passenger cars last week fell by 45% compared with the first week of March.
Zhang Hongtao said that since mid-to-late March, there are about 1,000 industrial enterprises above designated size in Shanghai that have maintained a closed production state, mainly concentrated in the fields of energy, chemical industry, electricity, chips, medicine and the production of necessary epidemic prevention materials, and tens of thousands of enterprise employees have insisted on closed production in the factory area for nearly a month, contributing to ensuring the basic operation of the city and the stability of the industrial chain supply chain. In accordance with the relevant national deployment and the requirements of the municipal party committee and municipal government, we have begun to promote the resumption of work and production in some areas in batches, especially key enterprises with closed production conditions and epidemic prevention and control conditions.
In the currently released white list, SAIC Passenger Cars, SAIC Volkswagen, SAIC-GM and Tesla (Shanghai) are among the resumption of work and production.
(Source: SAIC Motor Official Website)
According to the Shanghai Securities News, on April 18, the trend of the three major A-share indexes diverged, the Shanghai Composite Index was adjusted, and the ChiNext Index and the Shenzhen Composite Index both closed in red. On the disk, the auto parts sector performed actively, and individual stocks set off a rising tide; the two popular tracks of semiconductors and photovoltaics recovered.
Affected by the good news of the resumption of work and production of Shanghai's auto industry, as of the close of trading on April 18, the Shenwan automotive industry as a whole rose by 2.13%, and nearly 90% of the constituent stocks rose. Among them, more than 20 individual stocks such as Zhongjie Seiko, Ningbo Founder, Bojun Technology, Shenda Shares, Yingli Automobile, Jifeng Shares, Tianlong Shares, etc. rose and stopped.
Huaxi Securities said that due to the uncontrollable factors of the epidemic, many car companies have temporarily suspended production since the end of March. Judging from the sales of new energy vehicles in China, March was not affected by the suspension of production and the sales performance was excellent. With the improvement of the epidemic situation and the recovery of the supply chain, the industrial chain is expected to usher in the repair of both supply and demand, and it is expected that the short-term suspension of production will have a limited impact, and the long-term development logic of the new energy automobile industry will not be changed.
CICC expects that Changchun and Shanghai will promote the resumption of work and production, which will benefit the valuation repair of the auto zero industry chain. In Shanghai, the Shanghai Economic and Information Commission issued guidelines for the prevention and control of the epidemic resumption of work and production, of which 98 auto parts companies have been approved, but considering that it will take a long time to resume production until the production capacity is fully released, CICC believes that investors should keep their expectations for production and sales in April. Due to the outbreak of the epidemic in the major automobile production areas (Jilin and Shanghai), which has led to more than a month of suspension of production, considering that the supply chain will take time to resume production, the market expects to have a risk of revenue and profit loss in the industrial chain in May. CICC still believes that excellent companies are expected to make up for orders after the end of the epidemic through excellent resumption of work and production control and excellent quality control, so as to achieve performance and valuation repair. But the entire process still depends on whether the outbreak can be fully controlled.
However, CICC issued a risk warning saying that the new crown epidemic continues to affect production and marketing, and the rising cost of raw materials will affect profits. Galaxy Securities Research Institute also released a view that the industry may face the risk of adverse impact of the epidemic on automobile production and sales, the risk of new energy vehicle sales falling short of expectations, and the risk of production capacity bottlenecks caused by chip shortages.