20160130-法国巴黎银行-GREATER_CHINA_TECHNOLOGY_Automatic_for_the_people_84页_3mb

GREATER CHINA TECHNOLOGY - Summary

Core Content

This report outlines the growing importance of automotive electronics as a key driver for long-term technological growth in the Greater China region. It emphasizes the increasing integration of electronic components in vehicles, driven by the need for connectivity, safety, and environmental sustainability. The report also highlights the ADAS (Advanced Driver Assistance Systems) and V2V (Vehicle-to-Vehicle)/V2I (Vehicle-to-Infrastructure) technologies as major contributors to this growth, along with the stock recommendations for companies in the supply chain.

Main Points

1. Growth of Automotive Electronics

• The adoption of electronic components in vehicles is increasing rapidly, with a focus on enabling connected, safer, and greener vehicles.
• ADAS is expected to become a standard feature in more vehicles, with Gartner forecasting 15% of 2019 vehicles to have some form of ADAS, up from 6% in 2014.
• The ADAS market is projected to grow at a 19.2% CAGR from 2014 to 2020.
• V2V and V2I technologies are seen as next-generation growth drivers, as they can extend the effective range of onboard sensors and improve road safety and traffic efficiency.

2. Role of Government Regulation

• Government mandates for ADAS and V2V/V2I are expected to significantly boost demand.
• The US Department of Transportation and NHTSA are actively developing regulatory frameworks for V2V and ADAS.
• EU regulations are also pushing for the adoption of safety features such as LDW (Lane Departure Warning) and AEB (Automatic Emergency Braking).

3. Technological Constraints

• ADAS systems are limited by the effective range of sensors and cameras, which is typically 30-50 meters for radar systems using 24GHz.
• V2V/V2I is seen as a necessary extension to overcome these limitations, especially for long-range detection and real-time traffic data sharing.

4. Stock Recommendations

The report recommends BUY ratings on the following companies due to their exposure to the growing ADAS and V2V/V2I markets:

• Wistron Neweb (6285 TT): Expected to benefit from ADAS and V2V demand.
• Tung Thih Electronic (3552 TT): Expected to benefit from ADAS growth and adoption in China.
• Sunny Optical Technology (2382 HK): Global leader in vehicle lenses, with multiple growth drivers in the automotive and IoT sectors.
• Joyson Electronics (600699 CH): Maintained BUY rating due to its leading HMI know-how and infotainment demand.

Key Information

• ADAS technologies include sensing cameras, milliwave radars, laser radars, ultrasonic sensors, and module fusion systems.
• The product design cycle for automotive electronics is longer (up to 4 years) compared to consumer electronics (12-18 months).
• Cellular wireless connectivity is essential for V2V and V2I, with the auto-related cellular modem market expected to grow at a 25% CAGR from 2012 to 2020.
• Entry barriers in the automotive electronics industry are higher due to strict safety and reliability standards (e.g., ISO 26262), as well as longer design and testing cycles.
• Regulatory delays and infrastructure investment are identified as key risks to the growth of ADAS and V2V/V2I technologies.

Key Growth Drivers

• ADAS adoption by major global automakers (e.g., Audi, BMW, Lexus).
• Government mandates and infrastructure development.
• Cellular connectivity for V2V/V2I.
• Longer product design cycles and higher entry barriers leading to positive catalysts for the industry.

Risks

• Slower-than-expected ADAS growth.
• Delays in regulation.
• Unexpected intense competition among industry peers.

Conclusion

The automotive industry is rapidly evolving with the integration of advanced electronics, particularly ADAS and V2V/V2I technologies. These innovations are expected to drive long-term growth, supported by government regulations and increased consumer demand for safer and more connected vehicles. The report identifies several companies that are well-positioned to benefit from this trend, with BUY ratings and target price projections based on their market exposure and technical capabilities.