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华创证券汽车业24年展望:价格战压力依旧较大 关注车企新品的催化

Huacheng Securities's 24-year outlook for the automobile industry: the pressure of the price war is still very concerned about the catalysis of car companies' new products

Zhitong Finance ·  12/07/2023 16:48

The price pressure on the automobile industry will still be strong next year, but the replacement of electric fuel and the erosion of autonomous joint ventures will continue to occur.

The Zhitong Finance app learned that Huacheng Securities released a research report saying that the price pressure on the automobile industry will still be high next year, but electric fuel substitution and autonomous erosion of joint ventures will continue to occur. There are currently three core influencing factors in the “price war”. Among them, since joint venture prices and electricity prices have not reached the end, and the scope is relatively large, it is expected that 2024 will continue the price pressure of 2023. The bank believes that under the dramatic changes in the pattern, vehicle investment is still mainly based on growth ideas, focusing on the catalytic effects of successful new products from autonomous car companies on the right side of business and the right side of stock prices. In the parts sector, until the first half of next year, the valuation switching space achieved by EPS growth will mainly depend on the valuation switching space achieved by EPS growth. Although terminal price competition remains the same, revenue growth can hedge against the negative impact of excessive annual declines.

The views of Huacheng Securities are as follows:

In 2023-2024, there may be a “price war” that will go down in the annals of the Chinese auto market.

The “price war” currently has three core influencing factors. Among them, since joint venture prices and electricity prices have not reached the end, and the margin of space is relatively large (compared to previous price fluctuations), the bank expects 2024 to continue the price pressure of 2023. In the “price war” that is ahead of schedule, the market pattern will also undergo historic changes accordingly.

1) Factor 1: Inventory pressure during the business cycle is expected to weaken. The industry is expected to move from active dewarehousing to passive dewarehousing next year, so the impact of prosperity or inventory on prices will be relatively weak next year.

2) Factor 2: Some joint ventures still have room and momentum for price reduction. As autonomous electric vehicles enter the price range of 100,000 to 200,000 yuan, and autonomous electric smart vehicles enter the price range of 200,000 yuan or more, the overpricing and excess profits of joint venture car companies will continue to be compressed under competition. As of 2Q23, the bicycle profits and net interest rates of first-tier joint venture car companies represented by Toyota and BMW are still high in the industry, and there is still a significant pricing difference between their typical models and typical independent competitors.

3) Factor 3: Electric vehicles rely on large-scale expansion to dilute fixed costs and falling lithium prices. There is still room for price reduction. At the same time, increased industry competition provides momentum for price reduction.

Combining the above factors, especially 2 and 3, the bank estimates that the price reduction for typical ordinary B-class cars may still be 10% + next year, and the price reduction for luxury brand B/C cars may still be 15% + (the magnitude of joint venture fuel and autonomous electric vehicles is similar).

Although the price war is still going on, dramatic changes in the pattern continue to occur.

Combining domestic sales (product power+segmentation pattern changes) and exports, the bank estimated the sales volume of car companies:

1) The main car companies with large growth expectations are: Chery, BYD, Changan, Geely, Celis, Great Wall, Xiaopeng, Ideal, and Huawei Hongmeng Zhixing, which consists of many car companies.

2) The main car companies that are expected to reduce volume are: Volkswagen China, Toyota China, Honda China, SAIC GM, and Dongfeng Nissan;

3) Among them, car companies with large export growth expectations are mainly: Chery, SAIC, BYD, Geely, and Great Wall.

4) Among them, the car companies that are expected to increase the number of new energy vehicles are mainly: BYD, Changan, Geely, Cyrus, Ideal, Chery, and Xiaopeng.

Furthermore, although it is difficult to predict whether the new product will be popular, it is possible to explore the changes in the segmentation pattern:

1) High level of congestion: 200,000 yuan class cars and SUVs (covering 150,000 to 200,000 yuan, 200,000 to 250,000 yuan) in 2024, 300,000 yuan class (250,000 to 300,000 yuan) SUVs.

2) The level of congestion is low, and the market is paying more attention to: 300,000 yuan class cars, 400,000 yuan or more SUVs.

3) Potential segmentation of the Blue Ocean: 6-7 seater SUVs of 200,000 yuan ordinary brands.

Investment advice:

Under the dramatic changes in the pattern, vehicle investment is still mainly based on growth ideas, focusing on the catalytic effects of successful new products from autonomous car companies on the right side of business and the right side of stock prices. Among them, Changan Automobile (000625.SZ) is recommended, based on its relatively stable fundamentals+continuous new car launching+deepening external cooperation; it is recommended to continue to pay attention to the world, Ideal Car-W (02015), Xiaopeng Motor-W (09868), Geely Automobile (00175), and Great Wall Motor (601633.SH)'s new product situation.

The parts sector, until the first half of next year, mainly depends on the valuation switching space achieved by EPS growth. Although terminal price competition is still the same, revenue growth can hedge against the negative impact of excessive annual declines; recommend companies with relatively stable fundamentals and extended medium- to long-term growth. Among them, stable fundamentals can be examined in combination with factors such as next year's auto companies' sales volume and product ASP changes, etc., and I recommend Icody (600933.SH), Silver Wheel Co., Ltd. (002126.SZ), Xinquan Co., Ltd. (603179.SH), Xingyu Co., Ltd. and Best (300580) 601799.SH .SZ), Haoneng Co., Ltd. (603809.SH), it is recommended to pay attention to Baolong Technology (603197.SH).

Risk warning: macroeconomic fluctuations, fluctuations in overseas markets, fluctuations in raw materials, risk of price wars, the sales volume of core car companies with optimistic market expectations falls short of expectations, etc.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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