The Zhitong Finance App learned that CICC released a research report saying that China Automobile Association statistics showed that wholesale sales of heavy trucks in March were 116,000 units, +0.3%/+93.6% year over month; Jiaotong Insurance showed that 75,000 heavy truck terminals were licensed in March, -1.6%/+183.7% year on month; statistics from the General Administration of Customs showed that 251,000 heavy trucks were exported in March, -5.0%/+42.6% year on month. Considering the continuation of the upward cycle and beta support in the heavy truck industry, the export business drives the flexible release of profits and the recovery and increase in the heavy gas truck boom. We continue to recommend Sinotruk (000951.SZ,03808), CIMC vehicles (301039.SZ), and Foton Motors (600166.SH); recommend Tianrun Industrial (002283.SZ), Zhongzi Technology (688737.SH), Longsheng Technology (300680.SZ), it is recommended to focus on Xiangyu Pump (603319.SH), Changyuan Donggu ( 603950.SH), Huafeng Co., Ltd. (605100.SH), Zhongyuan Internal Distribution (002448.SZ).

The main views of CICC are as follows:

Wholesale sales increased year-on-month during the peak car buying season in March, continuing to increase channel inventory

According to the China Automobile Association, the wholesale sales volume of heavy trucks in 1Q24 was 272,000 units, +12.9%/+33.3% year-on-month, and the industry's “good start” was realized during the seasonal peak season. According to Jiaotong Insurance, the number of heavy trucks sold in 1Q24 was 136,000, -17.1%/-3.4% over the same period last month. CICC estimates that the 1Q24 channel inventory has increased by 70,000 vehicles, and channel inventory continues. CICC expects that inventory removal through the 2Q24 channel is expected to accelerate. Strong downstream demand for heavy natural gas trucks, heavy new energy trucks, etc., supports a month-on-month increase in domestic demand for terminals, but wholesale sales may drop slightly month-on-month, transitioning to the off-season.

Domestic sales penetration rate of heavy natural gas trucks exceeded market expectations in March, and gas vehicles became a structural opportunity for the whole year

According to data from Jiaotong Insurance, the number of heavy natural gas trucks licensed in March was +189.8%/+205.8% to 29,000 vehicles, with a monthly penetration rate of 39%, +27pp/+3ppt compared to the same period last month. CICC believes that, driven by the current “low freight rate and low gas price” factor, the sales volume of heavy natural gas truck terminals in April is expected to remain above 25,000 units. According to Jiaotong Insurance data, the 1Q24 FAW Group's market share of natural gas heavy truck vehicles reached 34%, ranking first in the industry; Weichai Power's market share in natural gas heavy truck engines reached 67%.

New energy heavy truck sales and penetration rate hit record highs in March; heavy truck exports are resilient

Referring to Jiaotong Insurance, the sales volume of electric/hydrogen fuel cell heavy trucks in March was 5064/240 vehicles, +185.6%/106.9% year on year, new energy penetration rate 6.7%, and +4.4pp/ -0.8ppt. CICC judged that sales of new energy heavy trucks will reach around 50,000 units in 2024, and the domestic sales penetration rate will be around 7%. Referring to the General Administration of Customs, 251,000 heavy trucks were exported in March, -5.0%/+42.6% YoY, of which 23,000 were exported to countries outside the CIS (+41% YoY), a record high. Looking ahead to 2024, CICC believes that China's heavy truck exports are still in the order of 300,000 vehicles, and is optimistic that the heavy truck export advantage will continue. According to the China Automobile Association, Sinotruk Group exported 10,000 heavy trucks in March, with a market share of 41%, maintaining its leading edge.

Risks: Overseas demand is declining, real estate demand is weak, and the competitive landscape is deteriorating.