Shenwan Hongyuan Securities·2025-07-13 11:42Investment Rating - The report maintains a positive outlook on the automotive industry, particularly focusing on the mid-to-high-end market and the marginal improvement opportunities for fuel vehicles [3][4]. Core Insights - The Chinese automotive market is transitioning between the third and fourth consumption eras, with a coexistence of family-oriented and self-indulgent consumption. There is a notable increase in sales driven by supply in the mid-to-high-end market, with potential for further expansion in large SUVs and personalized products [4]. - The report emphasizes the importance of superior supply to stimulate consumer demand, suggesting that products like Yu7, Zun Jie S800, and the upcoming Li Auto i8/i6 could lead the market [4]. - Discussions around the impact of next year's vehicle purchase tax are expected to enhance the competitive edge and valuation of fuel vehicles [4]. Industry Update - In the 27th week of 2025, retail sales of passenger cars totaled 397,000 units, a decrease of 30.35% month-on-month. Traditional energy vehicle sales were approximately 185,000 units, down 32.48%, while new energy vehicle sales reached 212,000 units, down 28.38%, with a penetration rate of 53.40% [4]. - The price index for traditional raw materials and new energy raw materials has increased recently, with traditional vehicle raw material prices rising by 1.3% week-on-week and 3.9% month-on-month [4]. - The total transaction value in the automotive industry for the week was 387.693 billion yuan, a decrease of 8.92% from the previous week [4]. Market Situation Update - The automotive industry index closed at 6919.33 points, down 0.41% for the week, underperforming compared to the Shanghai Composite Index, which rose by 0.82% [4][18]. - A total of 193 automotive stocks rose while 98 fell, with the largest gainers being Changchun Yidong, Fusa Technology, and Hengbo Shares, which increased by 17.4%, 13.7%, and 10.9% respectively [4][23]. Investment Analysis Recommendations - The report recommends focusing on strong alpha domestic manufacturers such as BYD, Geely, and Xpeng, as well as companies involved in the smart driving trend like Jianghuai Automobile and Seres [4]. - It suggests monitoring state-owned enterprise reforms, particularly with SAIC Motor and Dongfeng Motor Group, and highlights component manufacturers with strong growth potential, such as Fuyao Glass and New Spring Shares [4].