Automotive industry: Commercial vehicles are expected to improve steadily

The demand for the heavy truck market bottomed out, and consumers continued to watch the implementation of investment policies. In January, 11,000 heavy trucks were sold (ring -47%, -73% year-on-year). The attention of the heavy truck market has increased, but consumers are cautious about purchasing behaviors and watch the implementation of investment policies. Due to the impact of Spring Festival, sales of heavy trucks in January are not of reference significance. We believe that the monthly average sales volume of heavy trucks in China is in the range of 30,000 to 30,000 vehicles. It is expected that the market in 2009 is expected to gradually improve with the investment rhythm of active fiscal policy and its pull on the macro economy. .

Passenger car companies are not happy. The performance of medium-to-low grade markets is relatively good. From the perspective of passenger vehicle companies, BYD (+125%), Great Wall Motor (+63%), Guangzhou Mutian (+31%), Beijing Hyundai (+17%), Changan Automobile (+ 17% of sales increased rapidly, while FAW Toyota (-43%), FAW-Volkswagen (-41%) and Changan Suzuki (-37%) experienced a year-on-year decline.

Potential risk factors in the industry: Wealth effects are curtailed, the bottom of the macro economy is paralysed, and export demand pressures continue.

Policy Portfolio Boxing improves market expectations and valuation levels. Policies to increase consumer willingness to buy cars, the market expectations and valuation of the automotive sector have recently been significantly improved. The “car to the countryside” policy subsidy is about to be introduced (about 10% of the expected price), which is expected to drive the 10% increase in the light truck and microbus market, and stimulate new sales of about 250,000 vehicles. The recent increase in passenger vehicles has largely reflected the expected improvement, and the commercial vehicle market has steadily improved to enhance the valuation level, maintaining the “stronger than the market” of commercial vehicles and the “neutral” rating of passenger vehicles. Focus on FAW Cars, Yutong Bus, Weichai Power, CNHTC, and Jiangling Motors.