The Zhitong Finance app learned that Fangzheng Securities published a research report saying that a good car experience is one of the decisive factors in buying a car, even surpassing the price and brand. As an important window for the level of intelligence in smart cockpits, in-vehicle infotainment systems are an important battleground for OEMs to continuously upgrade their configurations and enter cutting-edge technology. With the launch of the Huawei Zhijie S7 and Wenjie M9, the industry's catfish effect will become more prominent. Light field screen technology in the display field will be implemented, and the upgrading of audio configurations in the field of acoustics will continue to accelerate. We continue to be optimistic about the field of automotive entertainment and video, as well as domain controllers that coordinate vehicles. The core targets include Huayang Group (002906.SZ) and Shangsheng Electronics (688533.SH).

▍ The main views of Fangzheng Securities are as follows:

Currently, the global market for smart cockpits is impressive, and the domestic market is leading in growth. The automotive entertainment video market continues to benefit, and the upward space is already opening up.

The global smart cockpit market is impressive, and the market potential is huge.

According to data, the global smart cockpit market in 2022 is about 53.9 billion US dollars, and the global market size is expected to reach 70.8 billion US dollars in 2025, with a compound growth rate of 9.5%; China's smart cockpit market size in 2022 is about 73.9 billion yuan; the overall market size is expected to exceed 100 billion yuan in 2025, reaching 103 billion yuan, and the 5-year compound growth rate is expected to reach 12.7%, which is higher than the global compound growth rate.

The architecture of cabin domain controllers is constantly being upgraded, and the trend of centralization is obvious.

As the centralized architecture is widely adopted and the amount of bicycle value it brings, more OEMs are adopting a centralized path within the region and iterating towards a centralized approach. Currently, the overall load capacity and penetration rate of domestic intelligent cockpit domain controllers is on the rise. In 2022, the annual load capacity of intelligent cabin domain controllers was 1.64 million, and the monthly penetration rate increased from 5.2% to 12.2%. At this stage, the value of the cockpit domain controller bicycle is around 1,500 yuan, and the penetration rate is relatively low. The CAGR is expected to reach 82% in 2022-2026.

The global automotive display market is developing rapidly.

Under the trend of intelligence, on the one hand, there is a trend of larger screens and multiple screens for in-vehicle displays. On the other hand, demand is driving the upgrading of display technology, driving up the unit price of in-vehicle displays. Under the trend of “rapid rise in volume and price” in the automotive display market, the global automotive display market space is growing rapidly. According to estimates, global vehicle display shipments in 2022 are about 192 million units, and the market size is about 9 billion US dollars. It is estimated that in 2023, the shipment volume will reach 200 million units, and the market size will be about 11 billion US dollars. By 2028, global vehicle display shipments are expected to reach 270 million units, and the market size will rise to 18 billion US dollars.

The number of in-car audio speakers continues to increase, and the volume and price of cockpit audio is rising.

Under the trend of high-end automotive acoustic systems, a complete car acoustics system will include about 8-20 speakers. Currently, new forces generally use 12 or more. As of September 2023, the average bicycle value of car audio systems is estimated to be over 1,500 yuan, with an additional 500-1000 increase for high-end models. According to estimates, in 2025, the global car speaker market space will reach 19.78 billion yuan, and the domestic market will reach 6 billion yuan. On the other hand, in 2025, the global automotive amplifier market could reach 31,791 billion yuan, with a CAGR of 8.4%.

Risk warning:

The upgrade of smart cockpit technology fell short of expectations; sales of new intelligent models fell short of expectations; increased competition in the industry exceeded expectations; and automobile exports fell short of expectations.