China Securities Co.,Ltd.: Passenger car bottoming out is imminent. High oil prices bring overseas demand Davis double-click.

China Securities Co., Ltd. released a research report stating that as of the current point in time, the wholesale of passenger cars in the first half of March was 648,000 units (down 20% year-on-year, up 36% month-on-month), confirming the bottoming out of sales in February and a clear improvement trend in March. The export of commercial vehicles remains high, and it is expected that heavy trucks will achieve a "good start" in the first quarter. The physical AI sector has seen a series of catalytic events: NVIDIA GTC released the Alpamayo 1.5 autonomous driving model, Tesla's Optimus V3 is nearing mass production, Cybercab will start mass production in April, FSD is making a push into China, and advancements such as Xiaopeng's second-generation VLA and Wenyizhixing's Robotaxi going global. It is currently recommended to actively position oneself in the technology sector. Key points from China Securities Co., Ltd. are as follows: Passenger Cars From March 1-15, wholesale reached 648,000 units, up 36% month-on-month, signaling a clear rebound in sales activity. Important events this week include the official launch of Xiaomi's new generation SU7 (21.99-30.39 RMB), Xiaopeng's release of four new models P7+/G7/G6/G9 and the introduction of the second generation VLA intelligent driving system, BYD Company Limited's second-generation blade battery with 9-minute flash charging technology, and Lionshare Group's listing on the Hong Kong Stock Exchange on March 19. From January to February, exports totaled 1.532 million units (up 58% year-on-year), with new energy exports continuing to exceed expectations. The sector has already fully reflected the "weak reality", and with high oil prices persisting, overseas penetration of new energy vehicles is expected to exceed expectations. Domestic car manufacturers generally have an export proportion of 20%-30%, and overseas markets are expected to become the second growth curve starting from this year. Commercial Vehicles The commercial vehicle market, including heavy trucks and buses, continues to exhibit good momentum in the first quarter. Wholesale of heavy trucks in March is expected to reach 115,000-120,000 units, with exports expected to reach 28,000-30,000 units (up 24% year-on-year), and first-quarter exports are expected to reach 85,000-90,000 units. Bus exports are maintaining strong growth, with large and medium-sized buses seeing a 98% increase in exports in January. Both heavy trucks and buses are expected to benefit from policy support, domestic demand, and continued overseas market demand, with a focus on undervalued companies with strong performance. For heavy trucks, Weichai Power is still favored, as domestic manufacturers resume bidding in addition to the significant shortage of the large cylinder products in North America, boosting market expectations for Weichai's performance and valuation. In terms of bus manufacturers, attention is drawn to Yutong Bus Co., Ltd. and Xiamen King Long Motor Group, as the mid-term trend of export-driven volume growth is clear, with valuations offering sufficient margin of safety. Siasun Robot & Automation Siasun Robot & Automation's IPO prospectus has been released, and the openclaw system is gaining popularity, expected to drive domestic Siasun Robot & Automation's participation in terminal deployment, with optimism about Siasun's volume increase alongside its IPO. Recommended Portfolio GEELY AUTO, Anhui Jianghuai Automobile Group Corp., Ltd., Weichai Power, Yutong Bus Co., Ltd., Xiamen King Long Motor Group, CAOCAO INC, Hengbo Holdings, Wuxi Longsheng Technology, Zhejiang Sling Intelligent Drive Group, Ningbo Tuopu Group. Risk Warning 1. Industry activity falls short of expectations; 2. Policy implementation falls short of expectations; 3. Export sales fall short of expectations; 4. Deterioration in industry competition; 5. Slow progress in customer expansion and new project production.