The Zhitong Finance app learned that Anxin Securities released a research report saying that the overall performance of passenger car sales in 2023 exceeded expectations, showing the characteristics of the off-season. The cumulative wholesale/retail sales volume for the first 10 months was 2026/16.57 million units, respectively, +8.9%/+5.5% over the same period last year. The bank expects the total sales volume of passenger cars to reach 27 million units in 2024, and the penetration rate of new energy is expected to reach 44%.

In terms of intelligence, the year of intelligent driving begins without a plan. Based on mature mainstream technology paths, Huawei and Xiaopeng are expected to implement unplanned advanced assisted driving in most regions of the country in 2023 and the first half of 2024, respectively. In terms of electrification, hybrid technology iterations (Geely Thor Electric Hybrid 8848, BYD DMO, Great Wall Hi4, etc.) have achieved significant performance improvements, and PHEVs still have a lot of room for growth; the popularity of 800V high-voltage fast charging relieves energy supplementation anxiety, and the EV penetration rate is expected to continue to rise. In terms of globalization, independent brand passenger car exports will continue to perform well, achieve breakthroughs in developed markets such as Europe, and increase market share in developing markets such as South America and Southeast Asia. Total passenger car exports are expected to reach 4.75 million vehicles in 2024, an increase of 20% over the previous year.

In terms of individual stocks, the bank recommended focusing on BYD (002594.SZ), Great Wall Motor (601633.SH), Ideal Auto (02015), Xiaopeng Motor (09868), Geely (00175), and Changan Automobile (000625.SZ).

Anxin Securities's views are as follows:

Resuming in 2023:

Both domestic sales and overseas sales have performed well. The overall performance of passenger car sales in 2023 exceeded expectations, showing the characteristics of the off-season. The cumulative wholesale/retail sales volume in the previous October was 2026/16.57 million units, +8.9%/+5.5%, respectively. Among them, (1) the growth of new energy passenger vehicles was steady, and the penetration rate of wholesale/retail volume increased to 33.6%/33.8% in the previous October; (2) export performance was impressive. The total number of passenger car exports in the previous October was 3.07 million vehicles, +65.6% year on year, mainly due to increased product competitiveness and optimization of the competitive pattern, Russia, and Mexico. Sales performance in markets such as, Belgium, and the United Kingdom Better yet, car companies such as SAIC Motor and Chery have contributed greatly.

Looking ahead to 2024, the intelligent, electrification, and globalization of passenger cars will enter the fast track.

We expect the total sales volume of passenger cars to reach 27 million units in 2024, and the penetration rate of new energy is expected to reach 44%. (1) Intelligent driving: In terms of intelligent driving, the year without a plan begins. Based on mature mainstream technology paths, Huawei and Xiaopeng are expected to implement unplanned advanced assisted driving in most regions of the country in 2023 and the first half of 2024, respectively; in terms of smart cockpits, they will enter a new stage of multi-mode interaction, multi-screen integration, and active interaction. (2) Electrification: Hybrid technology iterations (Geely Thor Electric Hybrid 8848, BYD DMO, Great Wall Hi4, etc.) have achieved significant performance improvements, and PHEVs still have a lot of room for growth; the popularity of 800V high-voltage fast charging relieves energy supplementation anxiety, and the EV penetration rate is expected to continue to rise; (3) Globalization: Independent brand passenger car exports will continue to perform well, achieving breakthroughs in markets in developed countries such as Europe. Market share in developing markets such as South America and Southeast Asia is expected to increase by 47.5 million vehicles year on year. 20%

The industry is becoming more high-end and specialized, and the competitive pattern of the industry is expected to ease.

In 2024, judging from the industry structure, the overall structure is expected to be further high-end. We predict that sales of new energy vehicles with prices of 200,000 to 300,000, 300,000 to 400,000, and 400,000 or more will reach 28.4%, 11.4% and 6%; new energy off-road is also expected to achieve a breakthrough of 0-1. We predict that 2023/2024 new energy off-road sales volume is expected to reach 86,469,000 vehicles, respectively, and the industry structure is expected to be further specialized. Judging from the industry pattern, overall competition is relatively relaxed, and competition is fierce in some price bands. Among them, the price of 200,000 to 300,000 yuan with the penetration rate of new energy has reached a high level, and the intensive introduction of supply will become the most competitive price band; the price of 100,000 to 200,000 yuan has large market space, low penetration rate, and the supply of new models is not as good as in 2023; the price above 400,000 yuan has a low penetration rate of new energy. As the supply of high-quality new energy accelerates, it is expected to further impact joint venture shares and increase the penetration rate of new energy. We expect that the competitive landscape of the industry will tend to ease in 2024, and first-tier leaders are expected to gradually emerge.

The profitability of automakers increased significantly in 2023, and this trend is expected to continue in 2024.

We reviewed the performance of the passenger car sector in 2023, and the profit side of automakers increased markedly. In particular, Q3 net profit increased significantly month-on-month. This was mainly due to the weakening impact of the price war, the decline in the prices of raw materials such as lithium carbonate, the reduction in corporate costs and efficiency, and the increase in gross margin due to the optimization of the sales structure. Looking at key enterprises, the results of the three quarterly reports of Great Wall/BYD/Changan all exceeded expectations. Looking ahead to 2024, we believe that the profitability of automakers is expected to continue to rise. The core reasons are: first: industry competition is expected to moderate in 2024, and price reduction pressure on independent brands is expected to be less; second: the sales structure is expected to continue to upgrade, which is expected to drive automakers to profit upward; third: lower lithium carbonate prices, continuous technological iterative innovation, and enhanced supply control capabilities, automakers are expected to continue to reduce costs.

Focus on the target:

BYD, Great Wall Motor, Ideal Auto, Xiaopeng Motor, Geely Automobile, Changan Automobile.

Risk warning:

The price war in the industry has intensified, the progress of new products has fallen short of expectations, the sales volume of new models has fallen short of expectations, and the risk assumptions have fallen short of expectations