Today, automobile-related stocks surged.

In terms of A-shares, Dongfeng Motor rose more than 7%, Changan Motor rose more than 5%, and Cyrus rose more than 5%. In the intraday period, it once hit a new high of 106.66 yuan/share, with a turnover of 6.264 billion yuan, BYD rose more than 3%, and BAIC Blue Valley and FAW Jiefang followed suit.

The Hong Kong auto sector continued to rise. Dongfeng Group shares rose more than 16%, NIO rose more than 5%, Xionganpeng Motor rose more than 4%, BYD rose more than 3%, and Zero Sports Auto, BAIC Motor, and Geely Automobile followed suit.

Looking at it over a long period of time, unwittingly, the automobile-related sector has become one of the strongest main lines in the market.

Since the A-share automotive sector began to rise on February 6, it has accumulated a cumulative increase of nearly 40%.

Among them, the leading stock Cyrus soared 84%, and its stock price soared from a low of 54.6 yuan/share to 106.66 yuan/share today.

Policies and car companies make concerted efforts

Looking at it now, the car market is in full swing due to joint efforts on the policy side and the industry side.

On the one hand, in the context of the downturn in real estate, economic growth requires new impetus to achieve its goals. New quality productivity and trade-in have become the main directions for strength this year.

Recently, the State Council's “Action Plan to Promote Large-scale Equipment Renewal and Consumer Goods Trade-In” clearly mentions that by 2027, the recycling volume of end-of-life vehicles will about double compared to 2023, and the volume of used car transactions will increase by 45% compared to 2023. Encourage banking institutions to appropriately reduce the down payment ratio for passenger car loans and reasonably determine automobile loan terms and credit lines.

Over the weekend, at the China Electric Vehicle 100 People's Conference Forum (2024), Vice Minister of Commerce Sheng Qiuping explained that research will be promoted to optimize insurance rates for new energy vehicles.

The deputy director of the State Council's State-owned Assets Supervision and Administration Commission said that the three central automobile companies China FAW, Dongfeng Group, and Changan Automobile completed direct investment of nearly 36 billion yuan in new energy vehicles in 2023, accounting for more than 60% of the investment. Any policy or initiative conducive to the development of new energy vehicles by central enterprises must be boldly explored, push enterprises to innovate without hesitation, and let go of their hands and feet to transform.

As can be seen from this, there is a clear trend of policy support for the development of the automobile industry.

On the other hand, car companies' price war has begun, and various brands have taken flight, and the penetration rate of new energy vehicles has increased dramatically, and it is likely to break through 50% in the next 3 months.

Today, BYD once again officially announced that the Honor Edition of the Frigate 07 was officially launched. The new car continues the “additional equipment and price reduction” strategy. A total of 5 configurations have been launched, with a price range of 179,800 to 259,800 yuan.

Furthermore, the entry of mobile phone manufacturers such as Huawei and Xiaomi has brought a great wave of popularity to the car market.

As a core partner of Huawei, Cyrus has become a new favorite in the capital market, and its stock price continues to reach new highs.

At the same time, this year's new models — the Mega and Xiaomi SU7, the first new cars on the Ideal Pure Electric Platform — have also sparked widespread discussion.

It can be said that in order to gain a leading edge in fierce competition, car companies have also made every effort to gain a leading edge.

Looking ahead to investment opportunities, Guohai Securities believesPolicies are blowing warmly. Many new cars were launched in March and April, followed by the March 28 Xiaomi and BAIC Huawei partner models. The quarterly report will soon be released. The Beijing Auto Show at the end of April is expected to catalyze intensive events in the sector.

The valuation is still at the bottom, and it is expected that there will be further room for improvement. We are optimistic about the opportunities in automotive transformation:

1) Automobiles benefiting from the rise of independent brands and high-end vehicles, recommend Changan Automobile, Ideal Auto, BYD, Great Wall Motor (high-end cycle), Xiaopeng Auto, and focus on Geely, BAIC Blue Valley, and Cyrus;
2) Components benefiting from electrification and independent rise. The Huawei chain recommends Xingyu shares, focuses on Ruihu Mold and Huguang shares, and recommends Tuopu Group for components that continue to grow, Yinlun Co., Ltd., Fuyao Glass, iKodi, Xusheng Group, Sanhua Intelligent Control, Double Ring Drive, Best, etc.;
3) Components benefiting from intelligence, recommend Keboda and Baolong Technology, Bethel, Desai Xiwei, and Junsheng Electronics, pay attention to Jingwei Hengrun.
4) For domestic and foreign buses that need to recover upward, Yutong buses are recommended.