Core Insights - The Chinese automotive market in the first half of 2025 shows significant growth driven by policy guidance, technological innovation, and strategic adjustments by companies, characterized by "total growth, structural optimization, and energy transition" [1] Sales Performance - Major automakers achieved year-on-year sales growth, with domestic brands and new energy vehicles being the primary growth engines, capturing over 68% of the market share [2] - BYD led the industry with total sales of 2.146 million units, a 33.04% increase year-on-year, achieving 39% of its annual target [2] - SAIC Motor reported sales of 2.053 million units, up 12.4%, with its own brands contributing 1.304 million units, a 21.1% increase [3] - Geely's sales reached 1.409 million units, a 47% increase, with its new energy vehicle sales surging 126% [3] - Changan Automobile's sales hit 1.355 million units, marking an 8-year high, with new energy vehicle sales growing 48.8% [3] - Chery Group sold 1.26 million units, a 14.5% increase, with new energy vehicle sales up 98.6% [4] Technological and Strategic Shifts - The automotive industry is transitioning from price competition to technology competition, focusing on smart and globalized strategies [1][7] - Companies are investing in core areas such as battery life, smart driving, and vehicle systems, entering a new phase of "cost reduction and efficiency enhancement" [7] - The trend of "software-defined vehicles" is emerging, with AI integration in manufacturing and improved user experience becoming key purchase factors [7] Global Expansion - Chinese automakers are shifting from "single export" to "overseas factories and localized supply chains," with BYD and Chery establishing production bases abroad [8] - BYD's overseas sales reached 470,000 units, with other companies also increasing their overseas sales proportions [8] Market Outlook - The market is expected to become more competitive and vibrant in the second half of the year, with new models and enhanced production capacities from overseas factories [8]

Core Insights - China's automobile exports have shown resilience and competitiveness, with a total export volume of 2.854 million units, representing a year-on-year increase of 16.8%, and an export value of $48.89 billion, up 5.3% year-on-year [1] Group 1: Export Performance - In the first five months, China's automobile exports to Asia reached 1.178 million units, a year-on-year increase of 39.1%, accounting for 41.3% of total exports [2] - Exports to Europe totaled 680,000 units, a decline of 17.6%, making up 23.8% of total exports [2] - Exports to Latin America were 613,000 units, increasing by 20.4%, representing 21.5% of total exports [2] Group 2: Key Markets - The top three countries for China's automobile exports by volume are Mexico (240,000 units, +16.8%), UAE (190,000 units, +64.2%), and Russia (153,000 units, -59.0%) [2] - In terms of export value, the UAE leads with $3.19 billion (up 68.9%), followed by Mexico at $2.95 billion (up 16.3%), and Belgium at $2.67 billion (down 19.1%) [2] Group 3: Emerging Markets - Exports to emerging markets reached 2.33 million units, a year-on-year increase of 16.9%, with an export value of $38.08 billion, up 8.1% [3] - Significant growth was observed in exports to the UAE (+64.2%), Australia (+51.9%), Indonesia (+131.8%), and Kazakhstan (+86.9%) [3] - The shift in focus from reliance on a single market to a diversified approach is noted, with growth in Middle East, Southeast Asia, Australia, New Zealand, and Latin America [3] Group 4: Company Initiatives - Chinese automobile companies are actively expanding into new markets despite challenges in traditional markets like the EU [4] - BYD has launched models in Benin and Gabon, marking its entry into 17 African countries, aligning with local electric vehicle initiatives [4] - In South America, BYD introduced the Song PLUS in Brazil, tailored to local consumer preferences [5] - SAIC Group's IM LS7 SUV has been launched in Mexico, featuring advanced technology and design aimed at high-end markets [5] Group 5: Future Outlook - The Chinese automobile industry is expected to continue expanding its global market share by introducing high-quality products and innovative experiences [6]

Group 1 - The core index of the China Securities Index Shanghai State-owned Enterprises rose by 0.42% to 1378.21 points, with a trading volume of 16.32 billion yuan [1] - Over the past month, the index has increased by 1.59%, and over the past three months, it has risen by 3.10%, while it has decreased by 3.35% year-to-date [1] - The index reflects the performance of state-owned enterprises in Shanghai, selected based on profitability, growth potential, and shareholder return levels [1] Group 2 - The top ten weighted stocks in the index include China Pacific Insurance (8.4%), Guotai Junan Securities (6.05%), Shanghai Airport (5.7%), and others [1] - The index is composed entirely of stocks listed on the Shanghai Stock Exchange, with a sector breakdown showing finance at 29.42%, industry at 22.95%, and consumer discretionary at 11.71% [2] - The index samples are adjusted biannually, with changes implemented on the next trading day after the second Friday of June and December [2]

Group 1 - The automotive industry shows varied performance among major companies, with Volkswagen leading at 542.04 million, followed closely by General Motors at 508.5 million, and Ford at 469.63 million [2] - Honda experienced a significant increase of 8.18% in its performance, reaching 412.9 million, while Tata Motors saw a decline of 1.04%, totaling 296.42 million [2] - New entrants like Li Auto and Xpeng are also making their mark, with Li Auto at 267.78 million and Xpeng at 167.66 million, both showing positive growth [2] Group 2 - The data indicates that traditional automakers like Nissan and Subaru are facing challenges, with Nissan reporting a decrease of 3.72% to 81.9 million and Subaru down by 2.81% to 124.17 million [3] - Emerging companies such as VinFast Auto and Leapmotor are also in the mix, with VinFast at 85.13 million, down by 2.57%, while Leapmotor shows a slight increase to 84.92 million [3] - The overall market dynamics suggest a competitive landscape where established brands must adapt to the rising presence of new players [3]

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **China auto sector**, with a focus on various companies within this industry. Company Ratings and Price Targets - **BAIC Motor Corp LTD (1958 HK)**: Market Cap: $1.981 billion, Price Target: HKD 1.70, Rating: Neutral [3][8] - **Brilliance China Automotive (1114 HK)**: Market Cap: $2.044 billion, Price Target: HKD 4.50, Rating: Overweight [3][11] - **BYD Company Limited - A (002594 CH)**: Market Cap: $126.399 billion, Price Target: CNY 560.00, Rating: Overweight [3][13] - **Li Auto (2015 HK)**: Market Cap: $13.230 billion, Price Target: HKD 135.00, Rating: Overweight [3][45] - **NIO (NIO US)**: Market Cap: $3.533 billion, Price Target: CNY 4.10, Rating: Neutral [3][47] - **SAIC Motor Corp - A (600104 CH)**: Market Cap: $26.176 billion, Price Target: CNY 11.00, Rating: Underweight [3][49] Financial Performance Highlights - **BAIC Motor Corp**: - FY23 Revenue: CNY 197,949 million, Adj. Net Income: CNY 3,030 million, Adj. EPS: CNY 0.38 [8] - **Brilliance China Automotive**: - FY23 Revenue: CNY 1,121 million, Adj. Net Income: CNY 7,735 million, Adj. EPS: CNY 1.53 [11] - **BYD Company Limited - A**: - FY23 Revenue: CNY 602,315 million, Adj. Net Income: CNY 28,000 million, Adj. EPS: CNY 10.36 [13] - **Li Auto**: - FY23 Revenue: CNY 123,851 million, Adj. Net Income: CNY 11,704 million, Adj. EPS: CNY 11.90 [45] - **NIO**: - FY23 Revenue: CNY 55,618 million, Adj. Net Income: CNY (21,147) million, Adj. EPS: CNY (12.44) [47] Market Trends and Insights - The auto sector is experiencing a shift with increasing competition among electric vehicle manufacturers, particularly with companies like BYD and Li Auto gaining significant market traction. - The financial outlook for traditional automakers like BAIC and DongFeng is less optimistic, with some companies facing declining revenues and profitability challenges. Additional Insights - The conference highlighted the importance of adapting to changing consumer preferences towards electric vehicles and the need for traditional automakers to innovate to remain competitive. - Analysts noted potential risks associated with regulatory changes and market volatility that could impact the auto sector's growth trajectory. Conclusion - The China auto sector is poised for growth, particularly in the electric vehicle segment, but traditional manufacturers face significant challenges. Investors should consider both opportunities and risks when evaluating companies in this space.

行 业 研 究 2025 年 07 月 06 日 重磅车型持续推出，本土品牌竞争力持续强化 ——行业周报 （4）看好智驾强势主机厂及业绩优异产业链标的。整车：强产品打造能力、强 产品周期叠加强智驾能力玩家有望拥有持续优异销量表现。零部件：受益于国产 替代及出海，龙头公司业绩表现优异并有望延续高增长。 本周热点：问界 M9 大定破 6 万；理想 i8/小米 YU7 等将逐步亮相 比亚迪王朝、海洋网智驾版新车型降价。乘联分会：5 月狭义乘用车零售预计 185.0 万辆，新能源占比过半。比亚迪 4 月欧洲纯电车销量首次击败特斯拉，同比大涨 169%，匈牙利工厂 2025 年底将生产纯电小车海鸥等。2025 款问界 M9 上市 64 天大定突破 6 万台，拿下 50 万级销冠。2025 款问界 M9 上市 64 天大定突破 6 万台，拿下 50 万级销冠。吉利银河家族旗舰 M9 发布，综合续航超 1500km；星 愿小车上市 200+天，销量突破 20 万辆，刷新纯电车型最快纪录。小米汽车首款 SUV 车型 YU7 发布，预计 7 月上市。 投资建议 智驾逐步开启商业化落地，有关主机厂和零部件公司有望持续受益，智驾强 ...

Investment Rating - The report maintains a neutral investment rating for the automotive and parts industry [5] Core Viewpoints - The governance of "involution" competition is expected to promote healthy development in the industry, with continued focus on companies within the Huawei supply chain [1][13] - June sales in the automotive industry benefited from consumption promotion policies, with significant year-on-year growth observed [11][17] - The report suggests that companies related to the Huawei supply chain will be less affected by price competition, indicating a stable order growth for models like the Hongmeng Zhixing S800 [12][19] Summary by Sections Investment Suggestions and Targets - The report recommends continued attention to the Huawei supply chain, including complete vehicles and auto parts, with a focus on competitive domestic brands and new forces in intelligent driving technology expected to expand market share by 2025 [2][14] - Suggested companies for investment include SAIC Motor, JAC Motors, BYD, and several others in the automotive and parts sectors [15][16] Sales Tracking - In June, the wholesale sales of passenger cars reached 1.235 million units, a year-on-year increase of 15%, while retail sales reached 763,000 units, a year-on-year increase of 3% [17] - Notable sales growth was reported for several new energy vehicle brands, with Hongmeng Zhixing delivering 52,747 units in June, marking a new monthly high [19] Industry Dynamics - The automotive industry is taking proactive measures to combat "involution" competition, including shortening supplier payment terms to 60 days and implementing various actions to stabilize pricing and improve profitability [13][22] - The report highlights that the central government is focusing on eliminating low-price disorderly competition and enhancing product quality across the industry [13] Market Performance - The automotive sector's overall performance has been relatively flat, with the motorcycle and other segments showing better performance [22] - The report notes that the automotive industry has underperformed compared to the broader market indices, indicating a need for strategic adjustments [24]

Investment Rating - The report maintains a "Positive" investment rating for the automotive industry, particularly focusing on the mid-to-high-end market and strong alpha companies [3][4]. Core Insights - The Chinese automotive market is transitioning between the third and fourth consumption eras, with a notable expansion in mid-to-large SUVs and personalized products, indicating untapped consumer potential [4]. - The report emphasizes the importance of innovative supply to stimulate market demand, highlighting products like Yu7, Zun Jie S800, and upcoming models from Li Auto as key drivers [4]. - The report suggests continued attention to strong alpha manufacturers such as Li Auto, JAC, Xiaomi, and Seres, as well as their corresponding supply chain companies [4]. Industry Update - Retail sales of passenger cars reached 570,000 units in the 26th week of 2025, with a month-on-month decrease of 1.38%. Traditional energy vehicles sold approximately 274,000 units, down 7.43%, while new energy vehicles sold 296,000 units, up 4.96%, achieving a penetration rate of 51.93% [4]. - The automotive industry experienced a total transaction value of 425.645 billion yuan this week, reflecting a week-on-week decrease of 5.01% [4]. - The automotive industry index rose by 0.10% this week, while the Shanghai and Shenzhen 300 index increased by 1.54%, indicating that the automotive sector's performance was below the broader market [11]. Market Conditions - The report notes that 123 automotive stocks rose while 159 fell this week, with the largest gainers being TaoTao Automotive, Hunan Tianyan, and Zhengyu Industrial, which saw increases of 29.8%, 21.0%, and 18.3%, respectively [15]. - Key events include the launch of the Xiaopeng G7, which exceeded pricing expectations and features advanced autonomous driving capabilities, and the opening of BYD's factory in Brazil, enhancing its presence in the Latin American market [5][8]. Investment Recommendations - The report recommends focusing on domestic strong alpha manufacturers such as BYD, Geely, and Xiaopeng, as well as companies involved in the trend of smart technology, including Jianghuai Automobile and Seres [4]. - It also suggests monitoring state-owned enterprise reforms, particularly with SAIC Motor, and identifying component manufacturers with strong growth potential, such as Fuyao Glass and New Spring [4]. Key Events - Xiaopeng G7 was launched with a starting price of 195,800 yuan, featuring advanced AI capabilities and a significant increase in autonomous driving performance [5][41]. - BYD's new factory in Brazil aims for an annual production capacity of 150,000 vehicles, with plans to expand to 300,000 units, marking a significant step in its global strategy [8][9].

Market Performance - A-shares and H-shares exhibited divergent performance this week, with the Shanghai Composite Index reaching a new high of 3472.32 points, marking a weekly increase of 1.4%, while the Hang Seng Index fell below the 24000-point mark, with a weekly decline of 1.52% [1][2] - The divergence in market performance led to a slight decline of 0.77% in the 每经品牌100指数, closing at 1068.62 points [1] A-share Market - The A-share market maintained a strong upward trend, with the Shanghai Composite Index successfully standing above 3400 points since June 24, and peaking at 3497 points this week [2] - Key stocks in the A-share market included 宝钢股份, which surged by 8%, and several other companies like 浦发银行, 上汽集团, and 宁德时代, which saw increases of over 5% [2][3] H-share Market - The H-share market faced continuous adjustments, primarily due to the decline of leading internet companies, which are significant components of the 每经品牌100指数 [2] - Only 华润啤酒 among H-share constituents saw an increase of over 5% this week [2] Solid-State Battery Industry - 宁德时代 experienced a strong performance, with a weekly increase of 5.9% in A-shares and 9.17% in H-shares, reaching a new high since its listing in Hong Kong [6] - The company is committed to investing in solid-state battery technology, with expectations for small-scale production by 2027, indicating a significant acceleration in the solid-state battery industry's development [7] Steel Industry - 宝钢股份 was the top performer among the 每经品牌100指数 constituents, with a weekly increase exceeding 8%, driven by improved demand and tightening supply in the steel industry [8] - The steel ETF (515210) also saw a rise of 5.4%, reflecting positive sentiment in the sector, supported by government policies aimed at stabilizing infrastructure investment and improving product quality [8][9]

Core Insights - The automotive exhaust purification market in China is experiencing significant growth due to increasing vehicle ownership and stricter environmental regulations, with a market size projected to reach 79.74 billion yuan in 2024, a year-on-year increase of 5.02% [1][11] - The rapid development of new energy vehicles presents new opportunities for the exhaust purification industry, as hybrid vehicles and internal combustion engine auxiliary systems still require effective exhaust purification solutions [1][11] Industry Overview - Automotive exhaust purifiers are devices installed in the exhaust systems of vehicles to reduce and purify harmful substances in exhaust gases, protecting the environment and human health [3] - The working principle involves physical filtration, chemical reactions, and biological degradation to convert harmful gases into less harmful substances [3] Types of Exhaust Purification Devices - Common types of exhaust purification devices include three-way catalytic converters, diesel particulate filters (DPF), selective catalytic reduction (SCR), and activated carbon canisters [5] - The three-way catalytic converter is one of the most widely used devices, utilizing precious metals like platinum, rhodium, and palladium to convert harmful substances [5] Industry Chain - The upstream of the automotive exhaust purification industry includes raw materials such as metal, ceramic, and rare earth materials, which are essential for manufacturing purifiers [7] - The midstream involves the production and manufacturing of exhaust purifiers, while the downstream encompasses various applications in gasoline, diesel, and fuel cell vehicles [7] Market Demand and Growth - The increasing economic development and rising income levels in China have led to a surge in vehicle purchases, with the total number of vehicles expected to grow from 194 million in 2016 to 353 million by 2024, reflecting a compound annual growth rate of 7.8% [9] - Despite the growth of new energy vehicles, fuel vehicles still dominate the market, necessitating the installation of exhaust purifiers to mitigate pollution [9] Competitive Landscape - The automotive exhaust purification industry features a mix of domestic and international brands, with companies focusing on R&D to enhance purification efficiency and reduce material costs [15] - Key domestic players include Anhui Aikelan Environmental Protection Co., Ltd., Shandong Aofu Environmental Protection Technology Co., Ltd., and Chongqing Hait Automotive Exhaust System Co., Ltd. [15] Industry Development Trends - Technological innovation and upgrades are crucial for the development of the automotive exhaust purification industry, with new materials and technologies improving purification efficiency [21] - International cooperation and competition are expected to increase, as companies work together to address global climate challenges while enhancing their technological capabilities [22][23]