Jinwu Financial News | BOC International released its monthly report on the automotive industry. In April 2024, passenger car retail sales fell 5.7%/9.4% yoy to 1,532,000 units due to consumer wait-and-see sentiment caused by the price war. In April, retail sales of new energy vehicles recorded 674,000 units (+28.3% year over year), and the penetration rate increased 1.7 percentage points month-on-month to 44.0%.
The bank expects that the popular holding of the Beijing Auto Show in late April and the favorable car trade-in policy introduced by the government will release some demand for car purchases. Under active promotion by major car companies, order data for the May 1st period is ideal. If the recovery trend continues, the bank expects sales volume to improve sequentially in May.
Although factors such as April sales data and higher US tariffs have a short-term impact on the industry, the bank believes that the impact of US tariffs is limited, and the improvement in May sales data is expected to drive the sector to usher in a new wave of upward opportunities.
In terms of individual stocks, the bank is still optimistic about BYD (01211/purchase), an industry leader with a rich product layout and plenty of room for price reduction. Furthermore, the bank believes that the acceleration of the Great Wall (02333/purchase) new energy transformation, high export growth, and increase in profit levels will support the company's valuation repair. Among the new forces, the bank is still optimistic (02015/purchase), due to its scale effect, increased profitability, and the intense pace of new car launches in 2024; the successful spin-off of the US stock market, and the IPO pricing is positive (only 0.7 times the 2023 market sales rate, 1.1-1.6 times according to FactSet), and the brand's sales momentum is good, surging 35% on the first day after listing.