The profitability of automotive core components will increase in the later stage

The same point in the automotive industry last year and this year is that the industry has seen a correction in April, and the market is unanimously expected that the corresponding valuation level is not the same; the difference is that the market sales in the second half of last year stimulated by the policy of energy-saving cars and the preferential withdrawal of purchase tax. The growth rate picked up quickly and surpassed expectations, and some companies may expect downward revision of profitability after the second quarter of this year. In addition, the policy orientation is different, and the division of industry segments becomes more obvious.

1. Passenger cars: Selecting time is more important than stock selection. From June to August, it benefited from the Japanese resumption of production, the base period of the same period is not high, and the sales growth of sales of narrow passenger vehicles was good. Meanwhile, high-quality companies reported high certainty of performance: There is an opportunity for low-quality games for high-quality passenger vehicles. The risk is that demand has not improved and competition has intensified.

2. Large and medium-sized passengers: From the perspective of industry characteristics, large and medium-sized customers are cyclically weaker than other sub-sectors, their cost impact is relatively small, and demand support factors are stable. They can be used as defensive varieties.

3. Heavy trucks: The heavy-duty truck industry is facing greater pressure this year, but the sales data may show phased buying points compared to the same period of last year and quarterly improvement. We estimate that the possible timing is about September. In addition, the implementation of the “Regulations on the Protection of Highway Safety” on the industry will require close follow-up.

4. Core Components: Considering that the largest merger and reorganization in the auto industry may occur in core auto parts and components, and then consider whether it belongs to the auto group, it is possible to pay close attention to Wanliyang and Weifu.

Judging from the current level of profitability, the current automobile sector is experiencing a deceleration in growth rate and the increase in costs has been weakened; judging from growth fluctuations, profit fluctuations and inventory cycles, the automobile industry currently has a higher probability of being in the late boom period.

From the second half of the year, relevant policies and regulations that may be promulgated or clearly defined, such as “Energy Conservation and New Energy Vehicle Planning”, “Road Safety Protection Regulations”, “Clear Implementation of the National IV Emission Regulations,” and “Support of core components”, we believe that The industrial policy of the automotive industry has been changed to adjust structure, fill short boards, and dilute the amount.