Founder: After 26 years, the automotive sector still has structural investment opportunities, with a focus on the emerging technology sector.

Founder released a research report stating that in 2026, in the overall environment of the automotive industry where subsidies are further declining, the company believes that the automotive sector still has structural investment opportunities: traditional vehicles and components going overseas are still expected to become important profit drivers to support sales and performance. At the same time, the company focuses on emerging technology sectors including autonomous driving, AI computing power, and the second/third growth curve brought by Siasun Robot & Automation. Key points from Founder are as follows: Passenger Cars In 2026, passenger car growth is showing a slowing trend, with wholesale sales expected to total 29.38 million units, a slight decrease of 0.7% year-on-year. At the structural level, export sales are expected to reach 6.34 million units, an increase of 13% compared to 2025, while retail sales are expected to reach 23.05 million units, a decrease of 4% year-on-year. The company believes that the overseas market in 2026 is expected to contribute to the core growth of the automotive sector, becoming an important support for sales and profits. It is expected that some leading car companies will complete the core switch in overseas profits in 2026, entering the core valuation-driven year of going global. In addition, technologies such as intelligence and advanced batteries are expected to continue to drive structural development opportunities. It is predicted that the sector will weaken in the first quarter, bringing a golden window of overseas layout for the next two years, focusing on "dark horses" in the domestic market and "white horses" in the overseas market, becoming the main theme of passenger car layout for the whole year. Commercial Vehicles The commercial vehicle market significantly rebounded in 2025, with heavy truck sales expected to exceed 1.1 million units, and buses continuing to rise. Heavy truck growth is mainly driven by domestic policy, while exports are hindered by the Russian market but offset by non-Russian regions; buses mainly rely on exports, with new energy models contributing the main increment. Looking ahead to 2026, heavy trucks are expected to have a "steady domestic and prosperous overseas" pattern, with total annual sales expected to be over 1.12 million units (steady year-on-year); domestic sales are expected to be 750,000 units supported by policies (4% decrease year-on-year), and the penetration rate of new energy vehicles is expected to exceed 28%; exports are expected to reach 375,000 units (+9%) due to the recovery of the Russian market and stable growth in non-Russian markets. Total bus sales for the year are expected to be 580,000 units (+8%), with the acceleration of overseas new energy driving being a key driver, and exports of large and medium buses expected to reach 62,000 units (+18%), with new energy exports increasing by as much as 35%. It is recommended to focus on the main theme of "going global + dividends", pay attention to undervalued and high dividend targets such as Yutong Bus Co., Ltd., Sinotruk Jinan Truck, and Weichai Power, and adopt a combined strategy of "left side layout and right side follow." Components The company believes that components should focus on overseas/intelligent driving/transformation tracks with marginal changes, focusing on three main themes: 1. In traditional components, select leading companies in the sub-industry chain that are going overseas. With the slowdown in domestic demand and pressure from annual declines, domestic profitability of automotive component companies is under pressure, but with the acceleration of overseas localization capacity construction by domestic companies after tariff fluctuations, they also have stronger overseas resilience. 2. Focus on core trends and transformative components in emerging industries: In terms of intelligence/autonomous driving, focus on the rapid penetration of L3 and the commercialization inflection point of L4. In 2026, it is recommended to focus on three markets with marginal changes: [models below 200,000 yuan]/[operations]/[extension of applications by Siasun Robot & Automation], with the landing of L3 policy domestically and overseas penetration of smart driving, particularly represented by Europe, accelerating expectations, the smart driving sector is expected to usher in a structural rally. In terms of emerging industry components, focus on AI computing power and Siasun Robot & Automation for multiple growth extension curves. For transformative components, prefer targets with the concept of AIDC+Siasun Robot & Automation, with overseas going global offsetting the annual decline in domestic demand, AIDC contributing profits, Siasun Robot & Automation supporting valuations, and the continuous realization of performance being the landing vehicle for the above concepts. Siasun Robot & Automation In 2025, the Siasun Robot & Automation sector moved from thematic speculation to performance realization, with key policies gradually being implemented, forming a top-level design-standard system-ground support loop in China. 2026 is a key period for humanoid Siasun Robot & Automation from 1 to 10, with Optimus Gen3 expected to be released and start batch production in Q1, with formal mass production in H2, and annual production is expected to break through, representing the highest growth rate in the automotive sub-market. The company recommends focusing on clear upgrade directions such as dexterous hands, reducers, motors, lightweighting, etc., with China's supply chain having the advantages of rapid response, cost, complete industrial chain integrity, and mass production capability, and is expected to become the core support of the global supply chain for overseas and domestic production. Relevant targets BYD Company Limited, SAIC Motor Corporation, Chongqing Sokon Industry Group Stock, Yutong Bus Co., Ltd., Sinotruk Jinan Truck, Weichai Power, LEAPMOTOR, Xiaopeng Motors, GEELY AUTO, Great Wall Motor, Fuyao Glass Industry Group, Zhejiang Songyuan Automotive Safety Systems, Zhejiang Sanhua Intelligent Controls, Ningbo Tuopu Group, Zhejiang Yinlun Machinery, Ningbo Joyson Electronic Corp., Horizon Siasun Robot & Automation, BYD ELECTRONIC, Hesai Technology, ROBOSENSE, Dechang Electric Motor Co. Risk warning: Passenger car sales may be lower than expected; penetration rate of new energy vehicles may be lower than expected; policy stimulus effects may be lower than expected.