China Securities Co., Ltd.: Passenger car exports continue to exceed expectations, and it is recommended to actively allocate investments in intelligent driving and Siasun Robot & Automation layouts in Q2.

China Securities Co., Ltd. issued a research report stating that this week, the production and sales data of major automakers in March were released intensively, with exports and sales of high-end vehicles performing better than expected. It continues to indicate that the export of new energy passenger vehicles will become a structurally strong factor under high oil prices due to geopolitical conflicts overseas. In addition, the 2025 reports are being released one after another, and despite weak market expectations for profitability, exports are still contributing strongly to performance elasticity. The pullback of intelligent driving and Siasun Robot & Automation stocks has been significant, and the stock prices of high-quality leading companies have gradually stabilized. With new catalysts in the second quarter, it is recommended to actively allocate and layout the current positions. Key points raised by China Securities Co., Ltd. are as follows: Passenger vehicle sector: March sales of major automakers better than expected, with strong contributions from exports and high-end vehicles. Among them: Geely's export sales in March reached 82,000 vehicles, a year-on-year increase of 120%, with over 10,000 deliveries of the extremely valuable 9X model. BYD's exports reached 120,000, a year-on-year increase of 65%; Chery's exports reached 149,000, a year-on-year increase of 72%. The year-on-year decline in domestic sales narrowed compared to February, with new cars being released one after another in the middle and end of March, and a trend of "price increase and added features" appearing in multiple models (expected to accelerate around the Beijing auto show in late April), domestic demand is expected to continue to improve. Commercial vehicles: The performance elasticity contributed by exports may be underestimated, and new businesses like AIDC could contribute to valuation elasticity. Attention is focused on the AI-powered mainline (Weichai) and performance-leading stocks (FAW, Yutong, Jinlong). In the heavy-duty truck sector, emphasis is on recommending Weichai Power. The underperformance of the 2025 performance is mainly due to year-end promotions and rebates on heavy-duty truck engines. Considering that the shipment of large-diameter diesel engines for AIDC in 2026 exceeds expectations, combined with the accelerated commercialization of main power sources such as combustion engines and SOFC, the company is optimistic about the full-year performance realization and the improvement of valuation fundamentals. Regarding passenger vehicles, continued optimism is expressed for Yutong Bus Co., Ltd. and Xiamen King Long Motor Group. The annual report performance and dividends announced by Yutong this week exceeded expectations, and the strong exports since the beginning of the year are expected to support Q1 performance. The mid-term trend of increasing export and export volumes is clear, and considering steady earnings growth + continued high dividends (Yutong), the realization of the reversal logic of difficult situations (Jinlong), and sufficient margin of safety in stock price, it is recommended to pay attention to the current configuration window. Physical AI: Active allocation of intelligent driving and Siasun Robot & Automation sectors is recommended. The escalation of geopolitical conflicts this week has put pressure on market liquidity, and the sector has pulled back to the bottom range, showing a favorable medium-term configuration value. Given that the second quarter could see new developments and catalysis for Tesla's Robotaxi and Siasun Robot & Automation, including the mass production of Cybercab, the release of Optimus V3, and the mass production of summer, the industry trend remains clear, and recent feedback from the supply chain companies indicates the reception of Siasun Robot & Automation mass production PPA, suggesting that the current period may be an important configuration window for the year. 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 prosperity falls short of expectations; 2. Policy implementation effects fall short of expectations; 3. Export sales fail to meet expectations; 4. Worsening industry competition landscape; 5. Customer expansion and new project production progress falling behind expectations.