Guohai Securities·2026-01-20 09:13Investment Rating - The report maintains a "Recommended" rating for the automotive industry [1] Core Insights - The implementation of the China-Europe electric vehicle price commitment mechanism is expected to stabilize sales expectations for Chinese electric vehicles in Europe and promote the high-end and localized transformation of automakers [5][13] - Multiple provinces have opened applications for the 2026 automotive replacement subsidy, indicating a clear path for local governments to implement the policy [14] - Great Wall Motors has launched the "Guiyuan" platform, which is the world's first native AI all-power platform, designed to support various power forms and enhance development efficiency [6][14] - The report expresses a positive outlook for 2026, highlighting opportunities in the high-end upgrade of domestic brands and the acceleration of smart technology penetration [15][16] Summary by Sections Recent Performance - The automotive sector outperformed the Shanghai Composite Index with a 1-week increase of 0.5% from January 12 to January 16, 2026, while the Shanghai Composite Index decreased by 0.4% [17] - The performance of individual stocks varied, with notable increases in companies like Ideal Auto (+2.4%) and declines in others like Li Auto (-3.5%) [17][23] Key Companies and Earnings Forecast - Key companies recommended include: - Jianghuai Automobile - Leap Motor - Great Wall Motors - BYD - SAIC Motor - China National Heavy Duty Truck [7][8] - Earnings per share (EPS) forecasts for selected companies show growth, with Great Wall Motors expected to reach an EPS of 2.03 in 2026 [8] Industry Indicators - In December 2025, automotive production and sales reached 3.296 million and 3.272 million units, respectively, with a year-on-year decrease of 2.1% and 6.2% [42] - New energy vehicles accounted for approximately 52% of total new vehicle sales, indicating a significant market shift towards electrification [42]