GF Securities: Raise the full-year year-on-year growth rate forecast for passenger car sales to 5%-10% for 2024.

GF SEC released a research report stating that, according to mandatory insurance, the growth rate of passenger car models below 150,000 in August significantly outperformed the industry: the sales volume of passenger car models below 50,000/50,000-100,000/100,000-150,000 increased by +69.5%/+17.1%/+12.6% respectively compared to the previous month, outpacing the overall industry sales growth rates of 60.1/7.7/3.2%. In addition, the sales performance of typical EV models below 100,000 outperformed the industry overall by 33.9%, mainly due to the fact that owners with existing vehicles can purchase new vehicles at a lower cost after enjoying subsidies and income from scrapping old vehicles. Taking into account the increased stimulus effect of the trade-in policy, the gradual introduction of local substitution subsidy policies, and normal seasonal patterns, the year-on-year expected growth rate of the passenger car terminal sales volume in 24 years has been revised from 0%-5% to 5%-10%. The cumulative destocking of the passenger car industry in the first 8 months of 24 was 698,000 vehicles, exceeding expectations in destocking efforts. According to data from the China Association of Automobile Manufacturers and mandatory insurance, as of the end of August in 24, the inventory of the passenger car industry was 3.828 million vehicles, with a decrease of 185,000 vehicles in August. From the perspective of the dynamic inventory-sales ratio, as of the end of August in 24, the dynamic inventory-sales ratio of the passenger car industry had decreased to 2.1. New energy continues to drive the continuous increase in domestic terminal market share of Chinese brands. According to mandatory insurance data, the sales of new energy passenger cars in August were 1.011 million vehicles, an increase of 49.7% year-on-year and 14.3% month-on-month. The penetration rates of wholesale and mandatory insurance for new energy passenger cars in August were 48.3% and 52.2% respectively, with year-on-year increases of 12.8% and 16.2% respectively. In terms of cumulative sales, the cumulative sales of new energy passenger cars with compulsory insurance in the first 8 months of 24 were 5.941 million vehicles, with a cumulative year-on-year growth rate of 41.2%. The terminal market share of Chinese brand passenger cars in the first 8 months of 24 was 58.1%, an increase of 6.9% compared to the whole of 23, with new energy driving the increase in Chinese brand market share by 22.9%. Continued focus on the performance of key models in the combination of "domestic PHEVs replacing joint venture fuel vehicles" + high-end SUV product groups. According to mandatory insurance, the penetration rate of PHEVs in the competing product lineup of domestic PHEVs replacing joint venture fuel vehicles has increased significantly. Among the competing product lineup of BYD Company Limited's Qin PLUS, the market share of Qin L and Sea Lion 06 has shown impressive growth since their launch; in BYD Company Limited's Han competing product lineup, the market share of Lingke 07 and Xiaomi SU7 has increased since their launch; in BYD Company Limited's Tang competing product lineup, the market share of Leopard 5 saw a significant increase in August; in the high-end SUV competing product lineup, the market share of the Ideal L6 is impressive, with the market share of Ideal L6 in August reaching 13.7%. Investment recommendations: Considering the industry and company positioning, combined with the current market pricing and the accelerating process of intelligence Passenger car manufacturers still recommend Chongqing Changan Automobile (000625.SZ) and Great Wall Motor (601633.SH,02333) with the basic establishment of turning points, with a focus on SAIC Motor Corporation (600104.SH); it is recommended to focus on trends or continue to rise with BYD Company Limited (01211), Ideal Car (02015), LEAPMOTOR (09863), and Xiaopeng Car (09868); it is recommended to focus on Huawei's whole vehicle cooperation enterprises that are expected to break through in sales in 24, Xiaomi cars. For components, recommendations include MINTH GROUP (00425), NEXTEER (01316), Zhengzhou Coal Mining Machinery Group (601717.SH,00564), Shanghai Baolong Automotive Corporation (603197.SH), Zhejiang Yinlun Machinery (002126.SZ), Fuyao Glass Industry Group (600660.SH,03606), Ningbo Jifeng Auto Parts (603997.SH), Bethel Automotive Safety Systems (603596.SH), IKD Co., Ltd. (600933.SH), Ningbo Tuopu Group (601689.SH), Ningbo Xusheng Group (603305.SH), Keboda Technology (603786.SH), Foryou Corporation (002906.SZ), Suzhou Sonavox Electronics Co., Ltd. (688533.SH), Ningbo Huaxiang Electronic (002048.SZ). For automotive testing, China Automotive Engineering Research Institute (601965.SH). Risk warning: Declining industry prosperity; policy stimulus effects falling short of expectations; intensified industry competition.