The three driving forces for the growth of automotive parts

The core view

The auto index rose 1.98% this week, and the overall valuation of the auto sector rose. It is recommended that the company focus on parts companies whose performance growth rate matches the valuation. The year 2018 is the year of the end of the period of popularization of automobiles, and the year of change in the pattern of brand sales differentiation is also the first year of breakthroughs in the introduction of new energy and high-quality products and independent high-end technology. Two deterministic main lines are recommended: 1) Certainty status of leading industries: SAIC Group (leading new car cycle + new energy consumption), Huayu Automotive (Shangqi + overseas performance stability + electric control, etc.), Yutong Bus ( New energy status will be further improved), Fuyao Glass (towards overseas), Guangzhou Huihui (innovation business + high-tech luxury cars), Weifu High-tech (determinacy of heavy truck emission standards upgrade), Weichai Power (heavy trucks leading to high-end equipment Transformation); 2) Certainty of growth: Xingyu (FAW-Volkswagen + headlight upgrade), Tuopu Group (Geely + Chassis Electronics), Ningbo Gaofa (Geely + variable speed manipulator upgrade), Silver Wheel (New Energy + Heat Exchanger Components Upgrade), Dongji Co., Ltd. (Homemade Replacement + Automatic Transmission Industry Chain).

Special Study: Three Drivers of Automotive Parts Growth

From 2011 to 2016, the auto parts industry as a whole grew faster than the sales volume of the industry. The CAGR of the parts and components industry was 14.1%, which was higher than the industry sales CAGR8.6% over the same period. We believe that the three driving forces for the growth of automotive components come from: new customers, new markets and new products. Under the general trend of independent substitution, spare parts companies with outstanding characteristics will continue to maintain their high growth. Recommend Xingyu (FAW-Volkswagen + headlight upgrade), Tuopu Group (Geely + Chassis Electronics), Ningbo Gaofa (Geely + Variable Speed ​​Manipulator Upgrade), Silver Wheel (New Energy + Heat Exchanger Component Upgrade), Dongsheng (Homemade replacement + automatic transmission industry chain), precision forging technology (domestic substitution + mass transmission volume).

Market Review

This week, the auto index rose 1.98%, outperforming the All-Max A Index by 1.11%, and all sectors were up. Smart car performance in the concept section was bright, rising 7.99 percentage points this week. The overall valuation of the automotive sector increased. Shares of Songzhi Stock led the gains, Wanfeng Aowei fell the most.

Focus

The CLUCC announced the sales volume of the passenger car industry two weeks before February. Our comments are as follows. 1) Cumulative daily average retail sales slightly increased by 0.4% in the two weeks prior to February, showing good growth; 2) Average daily average wholesale sales decreased by 14.7% in the two weeks prior to February, mainly due to the relatively long leave time of manufacturers, resulting in wholesale transportation before and after the Spring Festival. In a relatively stagnant phase; 3) We believe that the depth of channel inventory in January is at a relatively low level, and that the good growth in retail sales in February will have more room for additional subsidy, and factory wholesale is expected to achieve rapid growth.

risk warning:

1. The industry's sales did not reach expectations;

2. The promotion of new energy vehicles did not reach expectations.