Shenwan Hongyuan Securities·2025-12-22 06:15Investment Rating - The report maintains a positive outlook on the automotive industry, particularly focusing on companies with advantages in smart technology and the second-hand car market [1][3]. Core Insights - The Ministry of Industry and Information Technology has officially licensed L3 autonomous driving models from Changan and BAIC, indicating a significant step towards commercialization in this sector [1][4]. - The report highlights the potential for new energy vehicle companies such as XPeng, NIO, and Li Auto, as well as tier 1 suppliers like Desay SV and Jingwei Hirain, to benefit from advancements in smart technology [1][3]. - The report suggests that the current market conditions favor the recovery of second-hand car companies and the overall profitability of dealers, recommending companies like Uxin [1][3]. - Given the uncertainty in overall industry demand for the coming year, the report advises focusing on companies with strong performance support and relatively low valuations, such as Yinlun, Shuanghuan, and Jifeng [1][3]. - The report also notes the potential breakthroughs from state-owned enterprise reforms, particularly with SAIC and Dongfeng, suggesting continued attention to these developments [1][3]. Industry Updates - According to the China Passenger Car Association, the average daily retail sales of passenger cars in the second week of December were 67,000 units, a year-on-year decrease of 17% but a month-on-month increase of 9% [3][52]. - The automotive industry’s total transaction value for the week was 491.613 billion yuan, with a week-on-week increase of 4.82% [3][10]. - The automotive industry index closed at 7654.14 points, down 0.10% for the week, which is a smaller decline compared to the Shanghai and Shenzhen 300 index [3][10]. Market Performance - A total of 164 automotive stocks rose while 105 fell during the week, with Zhejiang Shibao, Haon Automotive, and *ST Weidi showing the largest gains of 44.1%, 28.4%, and 24.2% respectively [3][15]. - The report indicates that the automotive sector's price-to-earnings ratio stands at 28.44, ranking 18th among all primary industries [3][12]. Key Events - The report emphasizes the approval of L3 autonomous driving models as a pivotal moment for the industry, marking the transition from testing to commercial application [4][6]. - Companies like XPeng and Li Auto have also received L3 road testing licenses, further indicating the momentum in the autonomous driving sector [4][30].