20220113-招银国际-China_Auto_Sector_Survival_of_the_fittest__Pioneers_in_the_NEV_era_118页_4mb

报告摘要

China Auto Sector Summary

Core Content

The China Auto sector is undergoing rapid transformation, driven by technological advancements and shifting consumer preferences. The report emphasizes the importance of innovation and adaptability in a market where traditional automakers are struggling to keep up with the rise of new-energy vehicles (NEVs) and intelligent connected vehicles (ICVs).

Main Points

1. Industry Outlook for 2022

Restocking and Exports: The growth of China's auto sales in 2022 is expected to be driven by inventory restocking and increased exports.
Chinese Brands: Chinese automakers are gaining market share due to the introduction of competitive new models.
Luxury Sales: The luxury vehicle segment is projected to grow by 12% YoY, reaching about 4 million units.
Passenger Vehicle (PV) Sales: PV wholesale volume is expected to rise 7.5% YoY to 23.1 million units, with a moderate retail growth of 4% YoY.
Long-term Growth: The steady-state number of vehicles on the road in China is estimated at 22.7-24.4 million units, suggesting a 2-3% CAGR for long-term PV sales.

2. NEV Outlook for 2022

NEV Growth: NEV wholesale volume is projected to increase by 45% YoY to 4.8 million units, with a 21% penetration rate.
Market Share: Chinese brands are expected to capture 75% of NEV sales in China in 2022, particularly in the plug-in hybrid (PHEV) segment.
Battery Supply: Despite increased production, battery supply constraints could cap NEV sales in the first half of 2022.
Hybrid Technologies: PHEVs are expected to revive due to improved hybrid technologies, and Chinese automakers are leading in this space.

3. Intelligent and Connected Vehicles (ICVs)

Key Technologies: Autonomous driving (AD) and smart cockpit technologies are critical for the future of NEVs.
Market Leadership: Chinese automakers are leading in L2+ AD and smart cockpit capabilities, with Tesla being an exception.
Consumer Preferences: Analysis of 34,000 online comments and 1,218 models on sale highlights the importance of AD functions and software capabilities.
R&D Capabilities: The report evaluates the R&D strategies of automakers, emphasizing the need for innovation in AD and ICV technologies.

Key Information

Stock Recommendations

Preferred Stocks: Xpeng, NIO, Li Auto, and Great Wall Motor are recommended as "BUY" due to their strong positions in technology and market share.
Hold Stocks: BYD and Geely are given "HOLD" ratings due to their higher valuations and slower adaptation to new technologies.
Excluded SOEs: State-owned enterprises such as Brilliance China Automotive and BAIC Motor are excluded due to reliance on foreign joint ventures and lack of competitive homegrown brands.

Valuation Table Summary

Company	Ticker	Rating	Mkt Cap (US$ mn)	TP (LC)	Up/Down-side	P/E (x) FY22E	P/S (x) FY21E	ROE (%) FY22E
Xpeng (US)	XPEV US	BUY	41,432	80	65%	N/A	12.6	5.5
Xpeng (HK)	9868 HK	BUY	40,384	312	70%	N/A	12.3	5.4
NIO (US)	NIO US	BUY	50,389	45	42%	N/A	9.0	5.2
Li Auto (US)	LI US	BUY	31,760	48	56%	N/A	7.6	3.8
Li Auto (HK)	2015 HK	BUY	31,163	187	59%	N/A	7.4	3.7
Great Wall (HK)	2333 HK	BUY	30,449	36	40%	15.2	1.5	0.9
Great Wall (CH)	601633 CH	BUY	68,262	59	25%	34.1	3.3	2.1
GAC (HK)	2238 HK	BUY	10,909	11	28%	7.7	0.9	0.8
GAC (CH)	601238 CH	BUY	24,730	18	21%	17.5	2.1	1.8
BYD (HK)	1211 HK	HOLD	96,947	270	4%	82.3	3.1	2.3
BYD (CH)	002594 CH	HOLD	117,071	270	6%	99.4	3.7	2.8
Geely (HK)	175 HK	HOLD	25,705	21	5%	18.6	1.6	1.3

Investment Thesis

Pioneers Over Followers: The report favors pioneers in the NEV and ICV space over traditional automakers, as they are better positioned to meet evolving consumer needs and create new value.
Tech Transformation: Traditional automakers must undergo tech transformation to remain competitive. Great Wall Motor is highlighted as a leader in this area.
Valuation Shifts: Valuation methodologies have shifted to focus more on P/S (Price-to-Sales) for companies with high growth potential and less profitability, especially for NEV start-ups.
Software and Hardware: The integration of advanced software and hardware is crucial for the future of the industry, with ICVs being a key driver of growth.

Key Risks and Considerations

Battery Supply Constraints: Battery supply could limit NEV growth in the first half of 2022.
Market Uncertainty: The report suggests that the market may not be as clear-cut as before, with competition intensifying.
Localization Challenges: Tesla may face challenges in localizing its technologies in China, potentially allowing Chinese automakers to catch up.

Conclusion

The China Auto sector is at a critical juncture, with NEVs and ICVs playing a pivotal role in its future. Pioneers like Xpeng, NIO, and Li Auto are seen as the best bets for growth, while traditional automakers like Great Wall Motor are also highlighted for their tech transformation. The report underscores the importance of innovation, R&D, and adapting to consumer needs in this rapidly evolving industry.

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