Automotive Industry May 2008 Investment Monthly

In January and April, 926,600 vehicles were sold nationwide, an increase of 14.09% year-on-year. Affected by the changes in the vacation system, the change in the monthly fluctuations in the automobile led to a year-on-year growth rate in April. Passenger car: SUV imports and domestic sales are hot, MPV continues to be sluggish, and crossover vehicles are improving month by month. The mainstream passenger car manufacturers have a good operating situation. Among them, the sales growth of FAW Group is very prominent. Commercial vehicles: Low growth in China Card and China Light Industry Co., Ltd., and semi-hanging and chassis in the heavy-duty truck industry are expected to continue high growth. 2. The profitability of key automobile companies is good, and the export of commercial vehicles has grown rapidly. FAW's sedan has grown significantly. Changan Ford's sales have grown steadily, and SAIC's major OEMs have grown by 14%, of which Shanghai Volkswagen has a higher growth rate. Among the commercial vehicle listed companies, heavy truck manufacturers such as CNHTC and Shaanxi Automobile have achieved significant growth. Yutong Bus has grown by 31.77%. The advantages of large and medium-sized passengers industries are obvious; Jinlong Motors' sales performance in 2008 was unsatisfactory. 3. In the first quarter, the income of key auto companies increased by 28.22% year-on-year, and the total profit increased by 43.75%. The export situation of China's commercial vehicles is good. Trucks and buses are particularly prominent. In the future, the growth of commercial vehicle exports will become an important pillar for the steady growth of corporate profits. 4. There is no major change in the fundamentals of the auto industry. Maintain the investment rating of “recommended” for the automotive industry. The auto index is weaker than the broader market, and valuation remains low. The growth trend of mainstream auto companies is good, and it is inconsistent with the current low valuation. The investment value is obvious. It is recommended to focus on the leading passenger cars, excellent parts companies and high-growth car shares. We maintain the "strongly recommended" rating for Ningbo Huaxiang, Yutong Bus and Fuyao Glass. FAW Car was upgraded to a "recommended" rating.