The Zhitong Finance app learned that Dongwu Securities released a research report saying that in April, the smart driving version of the Huawei Wenjie M5 was equipped with the ADS2.0 advanced intelligent driving system for the first time. Since the launch of the new Inquisition M7, the smart driving experience combined with the smart cockpit upgrade has been highly recognized by customers. Consumer acceptance of autonomous driving has increased markedly, and the demand side of the domestic smart driving industry has reached an inflection point. In September, Huawei proposed a plan to launch the NCA for intelligent urban driving throughout the country in December, and Tesla's FSD plan to accelerate entry into the Chinese market. The accelerated implementation of the smart driving plans of the two giants triggered the “catfish” effect, and major car companies also competed to accelerate the implementation of advanced smart driving programs. The bank said that “light map, focus on perception” urban NOA is being implemented at an accelerated pace, and autonomous driving hardware is welcoming opportunities.

Investment advice:It is recommended to focus on sensory-layer hardware lidar industry chain companies Crystal Optoelectronics (002273.SZ), Lante Optics (688127.SH), Phoenix Optics (600071.SH), Yongxin Optics (), Juguang Technology (), Changguang Huaxin (), etc., vehicle camera industry chain companies Shunyu Optics (02382), Lianchuang Electronics (002036.SZ), OFIL (002456.SZ), Weir Shares (), etc. 603297.SH 688167.SH 688048.SH 603501.SH

The views of Soochow Securities are as follows:

With the smart driving and cockpit experience of the new Huawei car, the domestic intelligent driving industry has ushered in an inflection point in demand:

Huawei continues to promote the upgrading of autonomous driving solutions. In April 2023, the smart driving version of the Huawei Wenjie M5 was first equipped with the ADS2.0 advanced intelligent driving system. Since the launch of the new Wenjie M7, the smart driving experience superimposed smart cockpit upgrade has been highly recognized by customers, driving the Wenjie M7 to become a popular model. The smart driving program selection rate among models ordered from September 17 to October 7 has increased to 60%-70%, and consumer acceptance of autonomous driving has increased markedly, driving other car companies to increase their smart driving program selection rate. Consumer acceptance of autonomous driving has clearly increased, and the domestic smart driving industry has reached an inflection point on the demand side.

The giant's smart driving plan to enter the market triggers the “catfish” effect, and car companies race against the city NOA:

In September 2023, Huawei proposed a plan to achieve the launch of the NCA for intelligent urban driving throughout the country in December, Tesla's FSD plan to accelerate entry into the Chinese market, the accelerated implementation of the smart driving plans of the two giants triggered the “catfish” effect, and major car companies also competed to accelerate the implementation of high-end smart driving solutions: Ideal Auto plans to cover 100 cities across the country by December, while Zhiji Auto plans to cover 100+ cities across the country in 2024... Compared with high-speed NOA traffic road complexity, the level of software and hardware requirements for autonomous driving is increased exponentially. The popularity of NOA in cities means that cars can drive autonomously in more complex environments, marking a true gradual shift in intelligent driving from advanced assisted driving to autonomous driving.

“Light map, focus on perception” urban NOA accelerates implementation, and autonomous driving hardware welcomes opportunities:

Urban NOA is about to enter a large-scale mass production period. Due to issues such as the coverage, cost, and frequency of updates of the high-precision map itself, the “light map and heavy perception” autonomous driving scheme has become the mainstream choice of many car companies. Driven by the “heavy sensing” technology route, sensors such as lidar, high-resolution car cameras, and 4D millimeter wave radar can be used quickly: 1) Vehicle camera volume and price are rising rapidly: Autonomous driving upgrades drive vehicle camera loading capacity to gradually increase. At the same time, to meet the needs of higher-level autonomous driving, in-vehicle cameras increase the value of on-board cameras. 2) Accelerated entry of lidar: Pure visual perception solutions still present risks in special scenarios, and require extremely high computing power and data training. Under the trend of increasing autonomous driving levels, lidar has become the mainstream choice for advanced intelligent driving solutions with its advantages such as not relying on algorithm training, low computing power requirements, and more sensitive obstacle detection. Currently, along with the gradual large-scale mass production of models with advanced intelligent driving solutions, there are opportunities for mass production. 3) Accelerated applications of connectors, HUDs and other related hardware: Automotive autonomous driving sensor data relies on high-frequency high-speed connectors to achieve data transmission. Continued upgrading of advanced autonomous driving and mass production on vehicles drive a continuous increase in demand for connectors. HUD has significantly improved the autonomous driving experience, and market demand is expected to grow steadily.

Risk warning:Domestic car companies' smart driving program upgrades are not as fast as expected, intelligent penetration rate falls short of expectations, and customer expansion falls short of expectations