Automotive industry: Continue to be optimistic about low valuation First-tier auto stocks recommend 5 shares

The Guangzhou Blocking Program “Related to Buying Cars and Sense of Well-being”, and the possibility of several infinity cards in other regions. The “Relieve Traffic Congestion Plan” issued by Guangzhou on January 24 (draft for solicitation of comments) is worth noting:

Highlighted the need to strengthen traffic infrastructure construction, regulate traffic flow, strengthen traffic management, and formulate more detailed and reasonable measures; explicitly define private vehicles, but will accelerate the reform of official vehicles; the government will discuss relevant programs. It was proposed that the right to buy a car is closely related to the "happiness" of residents.

Compared with Beijing, the Guangzhou blockade program has stronger operability, fairness, and reasonableness, indicating that the domestic urban governance policy has been developing in a positive direction. Due to Beijing's special status and public opinion's rebound on the "Limited Brand" policy, we believe that other cities are more likely to draw lessons from Guangdong's experience in controlling blockage, and it is almost impossible to issue a "limit-limited" blockage policy. And just as our previous view, rational and effective governance of the block will benefit the sustainable development of the automotive industry.

Sales volume:

The sales situation of the terminal gradually recovered, maintaining the judgment of January and February at the same time of the previous year. Our research on manufacturers and terminals shows that the sales cycle of end-to-end sales has continued to rise year-on-week since January, and the third week has reached the level of last September. We estimate that terminal sales of narrow-minded passenger vehicles will show a positive growth of <5% in January (small increase due to short-term demand in December last year), while wholesale sales will record a positive growth of 5%-8%; Q1 The wholesale sales growth rate will reach about 10%, and the annual sales growth will be about 17%. In January and February, it was at the bottom of the year-on-year sales volume.

We are optimistic that sales of passenger cars in 2011 exceeded market expectations due to:

We believe that the high sales growth of 09 and 10 for two consecutive years is mainly an inevitable result of economic development and population structure evolution, rather than an abnormal response to policy stimulus; policy exit has no significant impact on the annual sales of the industry, and short-term advance consumer demand has been The vendor's "delayed confirmation, delayed delivery" behavior was smooth. (In December, the number of cards on the narrow passenger car was 1.374 million, and the wholesale sales volume was 1.096 million. Sales volume that was delayed after considering the consumption of inventory should exceed 400,000 vehicles).

Profitability: The ring pressure of rising raw material and labor costs should have peaked and the margins of quarterly earnings are improving. We are optimistic about the stable growth of profitability of the passenger vehicle industry in 2011 due to: 1. The expansion of technological capacity ( About 10%) The probability is higher than the production and sales volume (above 15%). Considering the elasticity of production capacity, the utilization rate of mainstream manufacturers will not decrease at least significantly; 2. Raw materials (oil, cold-rolled sheet, soda ash, etc.) and labor force The month-on-month peak of cost increase should have passed, and it is expected that the full-year increase will be lower than in 2010.

Investment advice: Policy is expected to be reversed, sales figures and annual reports, quarterly results will exceed expectations, continue to be optimistic about first-line auto investment opportunities passenger cars: mainstream passenger car stocks have been about 10% -15% increase since the stock price bottomed out in early January However, the valuation is still at 11-12 times 2010PE and 9-10 times lower than 2011PE. We are optimistic about the performance of first-line stocks of passenger cars based on the improvement of the policy environment, sales data exceeding expectations, and excellent annual/quarterly results. , continue to focus on recommending Hua Yu Automotive (600741), Fuyao Glass (600660), Shanghai Automotive (600104), Yueda Investment (600805), FAW Fuwei (600742), FAW Car (000800).

Commercial Vehicles: The first-line companies in the truck industry have adjusted their stock prices by about 15%-20% since the beginning of January, and the premiums have been eliminated relative to the premiums of passenger cars. Although the year-on-year prosperity of the industry will lag behind, the value at the bottom makes investment opportunities outstanding. Futian Automobile (600166), Weichai Power (000338), Jiangling Motors (000550), Yutong Bus (600066), China National Heavy Duty Truck (000951) are recommended.