The Zhitong Finance App learned that Debon Securities released a research report saying that although there was a certain degree of differentiation in the performance of vehicle and parts companies in 2024Q1, many outstanding companies are still remarkable under the intelligent, electrified, lightweight, and connected interpretation of the industry. With favorable policies to release demand, combined with the unveiling of a number of major new cars at the Beijing Auto Show, industry sales are expected to maintain steady growth. Affected by factors such as the price war, the gross margin of Changan Automobile and Tesla declined in 2024Q1. Although BYD's gross margin increased, the net profit of bicycles declined to a certain extent after the launch of the Honor Edition. Empowered by exports & high-end technology, Great Wall Motor (tank series+export enablement) and Cyrus (QG) performed well. Great Wall Motor's net profit for 2024Q1 was +59.3% month-on-month, while Cyrus's 2024Q1 net profit to mother was positive month-on-month.
Looking at the profitability performance of car companies as a whole, the profitability of some car companies increased year-on-year due to factors such as product structure improvements, cost reduction, or material inventory carry-over: in terms of gross margin, BYD, Great Wall Motor, GAC Group, Cyrus, and BAIC Blue Valley 2024q1 were +4.0/+3.1/+12.6/+2.2pct, respectively; in terms of net interest rates, BYD, Great Wall Motor, and Cyrus 2024q1 were +0.2/+6.9/+13.1pct year over year, respectively. Looking forward to the future, many major new cars were unveiled at the Beijing Auto Show and the rules of the trade-in policy were implemented. Industry demand is expected to be boosted, and strong automakers are expected to fully benefit.
There are two major growth poles in parts revenue:
(1) The largest growth pole: the number of major downstream customers, mainly from Cylis/Ideal, etc., driving the 2024Q1 revenue growth rates of Huguang Co., Ltd., Wuxi Zhenhua, Bojun Technology, Desai Xiwei, Keboda, and Huayang Group were 134.1%, 15.9%, 93.3%, 41.8%, 55.2%, and 51.3%, respectively.
(2) The second largest growth pole: the release of new products, such as Longsheng Technology's iron core; Songyuan's airbags and steering wheels; Mingxin Xuteng's microfiber leather; Haoneng's differentials; and SAIC Electronics' independent amplifiers helped the company increase in 2024Q1 revenue by 66.8%, 63.3%, 50.3%, 44.2%, and 32.0%, respectively.
The three major profit highlights of spare parts:
(1) The first highlight: Product structure upgrades, such as Fuyao Glass's skylight glass, head-up display glass, etc., Zhejiang Xiantong's frameless sealing strips, and Huguang Co., Ltd.'s high-voltage wiring harness, helped increase the gross margins from 33.2%, 29.9%, and 10.7% in 23Q1 to 36.8%, 33.5%, and 14.0% in 24Q1, respectively.
(2) The second major highlight: The impact of raw material costs has weakened, such as the year-on-year increase in gross margin of Wuxi Zhenhua, Ling Yun, and Wencan shares, which mainly benefited from the weakening impact of steel and aluminum costs, which helped their gross margin increase from 21.3%, 15.3%, and 14.3% in 23Q1 to 25.5%, 18.0%, and 16.6% in 24Q1, respectively.
(3) The third major highlight: Increased scale, such as Quanfeng Motor, Mingxin Xuteng, Haoneng, Shuanghuan Drive, and Sanhua Intelligent Control, helped increase their gross margins from -5.8%, 21.0%, 31.9%, 20.8%, and 25.6% in 23Q1, respectively, to 0.6%, 27.4%, 36.0%, .7%, and 27.1% in 24Q1, respectively.
Related targets:
For automakers, it is recommended to focus on Zero Sports (09863), Great Wall Motors (601633.SH), Ideal Automobile-W (02015), Xiaopeng Motor-W (09868), Cyrus (601127.SH), BAIC Blue Valley (600733.SH), BYD (002594.SZ), Geely (00175), Guangzhou Automobile Group (), Changan Automobile (000625.SZ), JAC (US). 601238.SH 600418.SH
In terms of components, it is recommended to focus on Huguang Co., Ltd. (605333.SH), Zhejiang Xiantong (603239.SH), Wuxi Zhenhua (605319.SH), Senkirin (002984.SZ), Shangsheng Electronics (), Fuyao Glass (DAB), Double Ring Drive (002472.SZ), Songyuan (300893.SZ), Top Group (), Best (300580.SZ), Sanhua Intelligent Control (002050.SZ), Debon Lighting (688533.SH 600600.SH 601689.SH 603303.SH), Bethel (603596.SH), Changshu Auto Accessories (603035.SH), Xinquan (), iKodi (US), China Automobile Research (Jiao), Baolong Technology (Logistics), Precision Forging Technology (300258.SZ), Kabei (300863.SZ), Jifeng (), Shanghai Yanpu (Index), Tamron (Russia), Mingxin Xuteng (603179.SH 600933.SH 601965.SH 603197.SH 603997.SH 605128.SH 603158.SH 605068.SH), Longsheng Technology (300680.SZ), Silver Wheel Co., Ltd. (002126.SZ), etc.
Risk warning: Competition in the industry intensifies, the electrification process falls short of expectations, and overseas demand falls short of expectations.