The sales volume of heavy natural gas trucks bucked the trend due to their economic advantages over the entire life cycle cost. It is expected that there is still a lot of room for improvement in the penetration rate of heavy natural gas trucks in the future.
The Zhitong Finance app learned that Guolian Securities released a research report saying that the heavy truck industry is in a slump overall, and the sales volume of heavy natural gas trucks bucked the trend due to their economic advantages over the entire life cycle cost. It is expected that there is still plenty of room for improvement in the penetration rate of heavy natural gas trucks in the future. In addition, heavy natural gas trucks require many additional unique components compared to heavy diesel trucks. The value of the whole vehicle ranges from 5-10 million yuan to 100,000 yuan compared to diesel vehicles, and the entire industry chain may usher in an industry opportunity where volume and price will rise sharply. The automotive sector focuses on recommending Sinotruk (000951.SZ); the upstream industry chain focuses on recommending Weichai Power (000338.SZ), Yinlun Co., Ltd. (002126.SZ), Ryoden Electronic Control (688667.SH), and Longsheng Technology (300680.SZ).
The views of Guolian Securities are as follows:
The economy of heavy natural gas trucks is highlighted, stimulating the penetration rate of heavy natural gas trucks to a record high
From January to September 2023, domestic sales of heavy natural gas trucks totaled 95,000 units, up 362% year on year, accounting for 20.2% of total domestic sales, up 14.7 pct year on year. Among them, sales volume was 24,000 units in September, and the penetration rate reached a record high of 40.6%. Since this year, domestic LNG prices have continued to decline, and the economy of heavy natural gas trucks has been highlighted. If a heavy natural gas truck consumes an average of 33 kg per 100 kilometers, a heavy diesel truck consumes an average of 28.1 kg of fuel for 100 kilometers, an operating mileage of about 200,000 kilometers per year, and a heavy diesel truck costs 20,000 yuan/year for urea. Under the current conditions where the price of LNG is 5.05 yuan/kg and the price of diesel is 8.07 yuan/kg, heavy natural gas trucks can save about 120,000 yuan a year compared to heavy diesel trucks.
The diesel-LNG price gap may remain high, helping the penetration rate of heavy natural gas trucks to continue to increase
OPEC cuts production, Russia bans exports of diesel, etc., and international crude oil may continue to be removed from inventory, so it is more likely that oil prices will remain high. Domestic LNG prices are mainly affected by domestic supply and demand and international LNG spot prices. As various regions launch upstream and downstream price linkage mechanisms, LNG prices may gradually stabilize after a slight recovery. We expect the domestic sales volume of heavy natural gas trucks to reach 155/24.8/399,000 units in 23-25, with a penetration rate of about 23.9%/31.0%/38.0%.
The sharp rise in volume and price is expected to drive the overall expansion of the natural gas heavy truck industry chain
The price of heavy natural gas truck terminals ranges from 5 to 100,000 yuan more expensive than heavy diesel trucks. The price difference mainly comes from the replacement and addition of special components for heavy natural gas trucks. Examples include natural gas injection rails that replace traditional fuel injectors inside natural gas engines, catalysts with more precious metals in exhaust gas treatment systems, and on-board LNG gas supply systems that replace ordinary fuel tanks. We believe that with the increase in the value of spare parts and bicycles, it is expected to bring an increase in profits to the industrial chain.
Risk warning: the diesel-natural gas price spread has narrowed; raw material prices have risen; the recovery of the logistics industry has fallen short of expectations, etc.