Huaxin Securities: The overall stability of China's passenger vehicle market in August, Musk provides new production guidance for the humanoid robot Siasun Robot & Automation.

Huaxin Securities released a research report stating that the overall stability of the national passenger car market in August. The retail penetration rate of domestic new energy vehicles reached 53.9%, an increase of 16.6 percentage points compared to the same period last year. This year, overall automobile exports continued the strong growth trend of last year. According to passenger car manufacturers' statistics, in August, passenger car exports (including complete vehicles and CKD) amounted to 413,000 units, an increase of 24% year-on-year and 9% month-on-month; cumulative passenger car exports from January to August reached 3.04 million units, an increase of 30% year-on-year. The retail market share of domestic independent brands continues to rise, while top traditional car companies show outstanding performance in transformation and upgrading. In addition, Musk recently attended the 2024 ALL IN summit and provided information on Tesla, Inc.'s AI and Optimus layout, stating that Optimus is expected to achieve mass production level of one million units in 5-6 years. Overall stability in the national passenger car market in August, awaiting the traditional peak sales season in September and October. The September 9th China Passenger Car Association (CPCA) report analyzed the national passenger car market in August. In August, retail sales of narrow passenger cars nationwide reached 1.905 million units, a year-on-year decrease of 1.0% but an increase of 10.8% compared to the previous month; cumulative retail sales for the year reached 13.472 million units, an increase of 1.9% year-on-year. In August, retail sales of conventional fuel vehicles were 870,000, a decrease of 28% year-on-year but an increase of 4% month-on-month; retail sales from January to August were 7.44 million, a decrease of 15% year-on-year. In August, the retail market for new energy passenger cars reached 1.027 million units, an increase of 43.2% year-on-year and 17.0% month-on-month; cumulative retail sales from January to August were 6.016 million units, an increase of 35.3% year-on-year. The penetration rate of new energy vehicles in the domestic market in August reached 53.9%, an increase of 16.6 percentage points compared to the same period last year. The retail market share of domestic independent brands continues to rise, with top traditional car companies showing outstanding performance in transformation and upgrading. In August, retail sales of independent brands reached 1.2 million units, an increase of 21% year-on-year and 14% month-on-month. The market share of independent brands in August was 63.4%, an increase of 11.4 percentage points year-on-year; the cumulative market share for the year is 58%, an increase of 7.8 percentage points compared to the same period last year. Top traditional car companies, including BYD, Chery, Geely, and Chongqing Changan, have seen significant increases in market share due to their transformation and upgrading efforts. August saw continued strong growth in exports, with the total automobile exports showing a similar trend as the previous year. According to passenger car manufacturers' statistics, in August, passenger car exports (including complete vehicles and CKD) reached 413,000 units, an increase of 24% year-on-year and 9% month-on-month; cumulative passenger car exports from January to August were 3.04 million units, an increase of 30% year-on-year. New energy vehicles accounted for 24% of exports in August, remaining steady compared to the same period. With the recovery of markets in South America and others, independent brand exports in August reached 333,000 units, an increase of 17% year-on-year and 8% month-on-month; joint ventures and Deluxe Corporation brand exports were 80,000 units, an increase of 20% month-on-month. New car launches are increasing, with the MONA03 performing well The Xpeng MONA03 has been well-received, with an average of over 2,000 orders per day. The MONA03 was officially launched and released on August 27 with three versions, starting at a price of 119,800 RMB. As of September 13, the MONA03 has received over 10,000 new orders, showing strong performance. The NIO Inc. Sponsored ADR Class A L60 will be released on September 19 at a price lower than the pre-sale price. The NIO Inc. Sponsored ADR Class A L60 is a pure electric mid-size SUV, with dimensions of 4828x1930x1616mm and a wheelbase of 2950mm. It is said to be longer, wider, and offer more space than the Tesla Model Y. Three different battery pack options will be available, providing ranges of 555km, 730km, and over 1000km. The L60 will be released on September 19 at a price lower than the pre-sale price of 219,900 RMB, with sales expected to reach 20,000 units by the end of the year. Huawei transfers trademarks such as Zun Jie, with new car products nearing launch. Huawei recently transferred over ten "Zun Jie," "MAEXTRO," and "MASTRO" trademarks to Anhui Jianghuai Automobile Group Corp.,Ltd. Anhui Jianghuai Automobile Group Corp.,Ltd. is collaborating with Huawei on the Harmony Smart Travel mode, with the brand named Zun Jie, targeting high-end luxury models such as Maybach and Rolls-Royce, positioned at the ultra-high-end level with prices in the million RMB range. The first product has entered the vehicle validation stage and is scheduled for production by the end of the year, with plans for launch in the first quarter of next year. Investment opportunities: With the government's support for new energy vehicles through incentives for trading in older vehicles for new ones, the sales of new energy vehicles are rapidly increasing. The traditional peak sales season in the automotive industry is expected to continue to drive domestic passenger car consumption, with model upgrades. It is recommended to pay attention to the Harmony Smart Travel series of complete vehicle manufacturers that have successfully entered the Chinese new energy vehicle market, including Chongqing Sokon Industry Group Stock, Jianghuai, BAIC BluePark New Energy Technology, among others. Musk attends the 2024 ALL IN summit, with Optimus expected to further reduce mass production costs Musk recently attended the 2024 ALL IN summit and provided information on Tesla, Inc.'s AI and Optimus layout. There are plans for both training and inference in AI: Dojo is used for training computers, while the inference computers are distributed in every Tesla, Inc. vehicle. Tesla, Inc. currently has Dojo1, with Dojo2 expected to enter mass production by the end of next year. Dojo2 is expected to be comparable to some high-end existing training systems, such as the B200 system.The third generation may be released around 2026, and it is possible that it will be offered as a service in the future.Optimus is expected to reach a production level of one million units in 5-6 years: in terms of cost, Musk said that as long as anything is produced in large enough quantities, the cost will approach its material cost. Optimus is a humanoid robot similar to Siasun Robot & Automation, but much smaller and lighter than a car, so its cost may not exceed $10,000 when produced on a large scale. In terms of production pace, the cycle of each iteration should be less than two years, and after about five to six years, the annual production volume can reach one million units. As for dexterity, the next generation of Optimus dexterous hand driver has been moved to the forearm, operating the fingers through cables like a human hand, and the next generation hand has 22 degrees of freedom, able to perform most tasks that a human hand can do. Moving the driver from the hand to the forearm can further reduce the volume of the dexterous hand. Investment advice: Planetary rolling screw is a high-quality segment race track for humanoid Siasun Robot & Automation. Huaxin Securities believes that hub bearing manufacturers and gear manufacturers have a competitive advantage in screw manufacturing. Related targets include: Ningbo Shuanglin Auto Parts, Zhejiang XCC Group, Shanghai Beite Technology, Wuxi Best Precision Machinery. Investment advice Buy when no one is paying attention, bullish on Tesla, Inc.'s opportunities on the left side of the industry chain layout. (1) Blue-chip targets: Ningbo Tuopu Group, Jiangsu Xinquan Automotive Trim, Ningbo Xusheng Group, IKD Co., Ltd .; (2) Elastic targets: Chuzhou Duoli Automotive Technology, Wuxi Zhenhua Auto Parts, Jiangnan Mould & Plastic Technology; (3) Northbound market, KAIT, JUNCHUANG TECH. Recommended targets Huaxin Securities continues to be bullish on the automotive industry and maintains a "recommended" rating: (1) Vehicle: The market barrier for vehicles above 400,000 yuan in China is relatively high. Hongmeng Smart Travel companies with deep cooperation with Huawei are expected to gradually occupy a certain market share, and it is recommended to pay attention to Chongqing Sokon Industry Group Stock (601127.SH), Anhui Jianghuai Automobile Group Corp., Ltd. (600418.SH) , BAIC BluePark New Energy Technology (600733.SH) etc .; (2) Auto parts: Downstream layout reshaping, technical change combined with parts going abroad, domestic parts usher in a golden period of development, focusing on growth tracks: Interior and exterior: Jiangsu Xinquan Automotive Trim (603179.SH), Shanghai Daimay Automotive Interior (603730.SH), Jiangnan Mould & Plastic Technology (000700.SZ); Lightweighting: Focus on Wencan Group (603348.SH), IKD Co., Ltd. (600933.SH), Ningbo Xusheng Group (603305.SH), Jiangsu Rongtai Industry (605133.SH); Intelligence: Urban NOA is landing intensively, Robotaxi is accelerating, pay attention to China Automotive Engineering Research Institute (601965.SH), CATARC Automotive Proving Ground (301215.SZ), Foryou Corporation (002906.SZ), Bethel Automotive Safety Systems (603596.SH), Shanghai Baolong Automotive Corporation (603197.SH); Humanoid Siasun Robot & Automation: With Tesla, Inc. Optimus entering production soon, the opportunity for automotive parts in the T chain transformation of Siasun Robot & Automation is significant, and it is recommended to pay attention to Zhejiang Sanhua Intelligent Controls (002050.SZ), Ningbo Tuopu Group (601689.SH), Ningbo Shuanglin Auto Parts (300100.SZ), Zhejiang XCC Group (603667.SH), Shanghai Beite Technology (603009.SH), Wuxi Best Precision Machinery (300580.SZ); Northbound market: It is recommended to pay attention to JUNCHUANG TECH (833533.BJ), KAIT (832270.BJ), EC PERCISION (836221.BJ). Risk warning Automotive industry production and demand fall short of expectations; intelligence progress falls short of expectations; autonomous brand development falls short of expectations; policy conflicts such as GEO Group Inc.Risks may hinder car exports; it is recommended to pay attention to company performance not meeting expectations."Je vais l'cole tous les jours." "I go to school every day."