Zhongjin: It is expected that domestic automobile sector will face challenges this year while overseas sales will see stable growth. It is recommended to focus on intelligent driving, humanoid Siasun Robot & Automation, and data center liquid cooling.

CICC released a research report stating that looking ahead to 2026, it is expected that domestic automotive industry will face certain challenges in domestic demand under the continuation of domestic policies, while overseas sales will see stable growth. In terms of investment strategy, components are preferred over complete vehicles, with a focus on the profit valuation double-up opportunity brought by AI-related layouts such as Siasun Robot & Automation, intelligent driving, and data center liquid cooling. In the passenger vehicle sector, the bank pointed out that with the support of two new policies, domestic demand still faces certain challenges. Currently, domestic sales have gradually exceeded the previous peak in 2017. Looking ahead to 2026, the bank believes that the policy of scrapping old cars for new ones will still provide a certain support, but the challenge of sales growth will increase. It is important to pay more attention to the opportunities brought by differentiation, globalization, and intelligence. Technological innovation on the supply side and iteration of vehicle models drive the increase in penetration rate, supporting the double-digit growth of new energy vehicles. The bank is more optimistic about the mid-to-high-end new energy market with strong demand resilience, and focuses on the opportunities brought by leading tactics adjustment and traditional brand catching up in new energy vehicles. In the commercial vehicle sector, the bank points out the growth space opened up by the sea and focuses on the trend of electric intelligentization. The bank believes that the commercial vehicle scrapping and renewal policy in 2026 is expected to continue, with a certain support from domestic demand. It is optimistic about the strong demand in the Asia, Africa, and Latin America region supporting heavy truck exports, and the improvement in the penetration rate of new energy vehicles in Europe supporting the prosperity of passenger car exports. In addition, the bank predicts that the penetration rate of new energy heavy trucks in China will reach about 35% by 2026; L2+ level assisted driving heavy trucks will achieve a breakthrough from 0 to 1 in 2025, and the penetration rate may reach single digits by 2026. Leading commercial vehicle companies have higher dividend willingness and ability, showing defensive qualities in 1Q26. In terms of components, the AI track has a multidimensional layout, and growth is gathering momentum for valuation upgrades. In 2025, Chinese automotive components faced certain pressure from downstream customers, the bank believes that the growth potential of the industry chain in 2026 may shift from internal drive to outward expansion. It is suggested to focus on the growth drivers gradually released by AI-related track layouts in 2026 and the valuation improvement: the deepening integration of AI technology with the automotive industry and high-end manufacturing, intelligent driving (L2+ penetration rate continues to rise, L3 mass production landing), humanoid Siasun Robot & Automation (T mass production begins, multiple companies accelerate promotion), data center liquid cooling (explosive demand for computing power, vast domestic substitution space) three major high-growth tracks are providing core paths for component companies to break through traditional business boundaries and open up growth ceilings. It is also recommended to continue monitoring related targets for the overseas expansion of components.