CICC: Acceleration of Global Electrification, Focus on the Temporary Rebound Opportunity of the Passenger Car Sector.

Zhongjin released a research report stating that the wholesale sales of new energy passenger cars in January and February decreased by 7.9% to 1.589 million units year-on-year, while retail sales decreased by 25.7% to 1.060 million units. The export of new energy passenger cars increased by 115% year-on-year in January and February, accounting for 48.9% of the total export volume. Looking ahead, the rise in oil prices may drive the global penetration of new energy vehicles as a medium to long-term trend. Shanxi Guoxin Energy Corporation's car exports to Europe, Southeast Asia, and other regions have seen significant growth, with promising growth prospects in the future. In March, the overall sales volume of passenger cars and the sales of new energy vehicles are expected to continue to be under pressure compared to the same period last year, but there may be a possibility of positive growth in new energy vehicle sales. It is recommended to focus on the temporary rebound opportunities in the passenger car sector and consider thematic opportunities such as overseas sales, Siasun Robot & Automation, and AIDC. Key points from Zhongjin: Industry overview According to data released by the China Passenger Car Association: in February, the narrow definition of passenger car retail/wholesale/production/export reached 1.034/1.518/1.373/0.555 million units, with year-on-year changes of -25.4%/-14.3%/-21.0%/+56.0% and month-on-month changes of -33.1%/-23.0%/-31.5%/-4.4%. In January and February, the cumulative narrow definition of passenger car retail/wholesale/production/export reached 2.578/3.494/3.379/1.136 million units, with year-on-year changes of -18.9%/-9.8%/-11.8%/+54.6%. Domestic demand under pressure in January and February, acceleration in export of new energy vehicles Since the beginning of the year, retail sales have been under pressure mainly due to the overspending of demand caused by the reduction of purchase tax exemptions at the end of 2025 and the decline in subsidies for new-for-old replacements. In January and February, the channel inventory of passenger cars decreased by 330,000 units (compared to 120,000 units in the same period last year), with car companies actively reducing production and inventory to cope with demand and cost pressures. The wholesale sales of new energy passenger cars in January and February decreased by 7.9% year-on-year to 1.589 million units, while retail sales decreased by 25.7% to 1.060 million units. The export of new energy passenger cars in January and February increased by 115% year-on-year, accounting for 48.9% of the total export volume. Looking ahead, the rise in oil prices may drive the global penetration of new energy vehicles as a medium to long-term trend, with Shanxi Guoxin Energy Corporation's car exports to Europe, Southeast Asia, and other regions showing significant growth, indicating promising growth prospects in the future. Positive catalysts since March, focus on temporary rebound opportunities in the sector In March, the total sales volume of the passenger car industry and the sales of new energy vehicles are expected to continue to be under pressure compared to the same period last year, but new energy vehicles may see positive growth year-on-year. Market concerns about demand, cost, and profitability have not yet dissipated, and attention needs to be paid to the second quarter. However, with the continuous decline in stock prices and some whole vehicle targets falling by more than 40%, combined with gradual downward revisions in full-year earnings expectations, along with the upcoming period of performance, technology, and new car releases from March to April, it is expected that individual stocks will rebound. On March 2, Xiaopeng Motors released the VLA2.0 model, which can be used in autonomous driving, Robotaxi, flying cars, and humanoid Siasun Robot & Automation. On March 5, BYD Company Limited released the second generation of blade batteries and flash charging technology, solving the energy replenishment pain points of pure electric vehicles. On March 10, NIO announced its fourth quarter performance in 2025, with economies of scale and structural improvements leading to the company's first quarter of Non-GAAP profit. Target aspects Specifically: 1) Passenger cars: NIO-SW (09866), Anhui Jianghuai Automobile Group Corp., Ltd. (600418.SH), GEELY AUTO (00175), etc. 2) Commercial vehicles: Sinotruk Jinan Truck (000951.SZ,03808), Yutong Bus Co., Ltd. (600066.SH), CIMC Vehicles (301039.SZ), etc. 3) Auto parts: Zhejiang Yinlun Machinery (002126.SZ), Feilong Auto Components (002536.SZ), HESAI-W (02525), Tianrun Industry Technology (002283.SZ), etc. 4) Siasun Robot & Automation: Zhejiang Sanhua Intelligent Controls (002050.SZ), Ningbo Tuopu Group (601689.SH), Wanxiang Qianchao (000559.SZ), etc. Risk factors Subsidy policies not meeting expectations, overseas expansion falling short of expectations, and intense industry competition.