Dahua Rating｜Daiwa: It is expected that Chang'an, Geely, Sinotruk, and Times Electric will benefit from the old-for-new policy and are rated as "buy".
Daiwa released a research report stating that the National Development and Reform Commission recently issued a notice on a number of measures to encourage equipment upgrades and replacing old consumer goods. A total of 300 billion yuan will be used to strengthen support for large-scale equipment upgrades and replacing old consumer goods. Among them, subsidies for replacing old automobiles have been increased. It is expected that Great Wall Motor, Geely Auto, Sinotruk, and Times Electric will all benefit from this policy and have a "buy" rating. The new policy is expected to drive the replacement demand for passenger vehicles, heavy-duty trucks, and new energy city buses to increase.
Huizhou Desay SV Automotive (002920.SZ): The fourth-generation cockpit product has been newly designated by customers such as Li Auto Inc, Geely Auto, GAC Aion, and Weimar Automobile.
On July 26th, Gelonhui reported that Huizhou Desay SV Automotive (002920.SZ) stated on the investor interaction platform that the company has multiple differentiated Asia Vets cockpit solutions, providing customers with more diverse product choices. The third-generation high-performance intelligent cockpit products have been mass-produced and matched with Li Auto Inc, Chery Automobile, GAC Aion, GAC Passenger Vehicle, and other customers. The fourth-generation cockpit products have been designated for new projects by Li Auto Inc, Geely Auto, GAC Aion, and Polestar, and have been mass-produced and supplied in succession. More differentiated cockpit domain controller solutions have successively obtained orders from new projects of independent and joint venture brands.
Furui: BYD Company (01211), BluePark New Energy Technology Co. Ltd. (09863), Great Wall Motor Co. Ltd. (02333) and Geely Automobile Holdings Ltd. (00175) are the most benefited in the updated subsidies.
Furui predicts that with the updated subsidy (valid until December 31st), the performance of Mainland auto manufacturers in the fourth quarter will benefit from the early release of demand for 2025.
Cui Dongshu: In the first half of the year, imports of autos decreased by 4% year-on-year to 0.332 million units.
Cui Dongshu, Secretary-General of the China Association of Automobile Manufacturers, stated that the import volume of cars to China has continued to decrease at an average annual rate of about 8% since 2017, with only 0.8 million units expected to be imported by 2023.
Minsheng Securities: Autos sector demand is on the rise as the policy of trading in old vehicles for new ones is strengthened.
This policy further clarifies the funding channels and specific amounts, among which the central government has a high proportion and strong support, which is expected to greatly promote the replacement of old with new and stimulate upward demand.
China Securities Co., Ltd.: Electric car sales in June increased significantly compared to last month and the same period last year, with penetration rate continuing to reach a new high.
In June 2024, the sales of electric vehicles saw an increase in both year-on-year and month-on-month comparisons: the total domestic sales of new energy vehicles was 1.049 million units according to the China Association of Automobile Manufacturers, with a year-on-year and month-on-month growth of 30.1% and 9.8% respectively; the sales of new energy passenger vehicles, as measured by the China Passenger Car Association, were 0.982 million units with a year-on-year and month-on-month growth of 29.2% and 9.5% respectively, and a penetration rate of 45.3%, up by 1.6 percentage points month-on-month.
