Soochow Securities·2025-07-21 01:44Investment Rating - The report recommends a "Buy" rating for the bus sector, specifically favoring Yutong and King Long [3][4]. Core Insights - The driving factors for the current bus cycle include China's automotive manufacturing industry becoming a global leader in technology output, with overseas market contributions expected to replicate the domestic market within 3-5 years [2]. - The domestic market has seen an end to price wars, which is expected to boost demand due to tourism recovery and public transport upgrades, potentially returning to 2019 levels [2]. - The report anticipates that the bus industry can achieve new profit highs due to the absence of price wars, a concentrated market structure, and favorable cost trends in lithium carbonate [6]. Summary by Sections Industry Overview - In June 2025, the overall production of buses in China reached 50,000 units, with year-on-year and month-on-month increases of 24% and 14% respectively [9][10]. - The wholesale volume for June was 53,000 units, also reflecting a year-on-year and month-on-month growth of 23% [9][10]. - The terminal sales for buses in June were 45,000 units, with a year-on-year and month-on-month increase of 6% [16]. Company Performance - Yutong's June sales were 5,919 units, showing a year-on-year increase of 94% and a month-on-month increase of 25% [63]. - King Long's June sales were 4,283 units, with a year-on-year increase of 20% but a month-on-month decrease of 10% [68]. - Both companies are expected to benefit from increased domestic and export sales, with Yutong maintaining a market share of 28% in the domestic bus market [47]. Export Dynamics - In June 2025, the export of buses reached 5,594 units, marking a year-on-year increase of 30% but a month-on-month decrease of 8% [48]. - The export market is dominated by Yutong and King Long, with Yutong exporting 1,235 units and holding a 39% market share [57].