China Securities Co., Ltd.: Passenger car exports continue to exceed expectations, actively laying out the direction of high prosperity growth.

China Securities Co., Ltd. released a research report stating that this week, the production and sales data for March from major automakers was densely released, with exports and sales of high-end vehicles performing better than expected. It continues to suggest that the export of new energy passenger vehicles will become a structurally strong alpha under the influence of geopolitical conflicts and high oil prices overseas. The market is gradually becoming desensitized to high oil prices and war factors, actively seizing the direction of the return of high prosperity, the continued better-than-expected engine prosperity brought by AI, FSD gaining approval in the Netherlands, and the high-level prosperity of Siasun Robot&Automation driving the industry to continue to evolve. The stock prices of high-quality leading companies have gradually stabilized, and it is recommended to actively allocate positions under the new catalyst of the Q2 sector. Key points from China Securities Co., Ltd. are as follows: Passenger car sector: March sales from major automakers exceeded expectations, with strong contributions from exports and high-end vehicles, and the April car show is approaching. Among them, Geely exported 82,000 vehicles in March, a year-on-year increase of 120%; BYD Company Limited exported 120,000 vehicles, a year-on-year increase of 65%; and Chery exported 149,000 vehicles, a year-on-year increase of 72%. With the Beijing Auto Show accelerating in late April, the March Producer Price Index is expected to turn positive year-on-year, and domestic demand is expected to improve. Commercial vehicles: The performance elasticity contributed by exports may be underestimated, and new businesses like AIDC could contribute to valuation elasticity. Physical AI: It is recommended to actively allocate positions in the intelligent driving and Siasun Robot&Automation sectors. The market is starting to stabilize as it becomes desensitized to war and high oil prices. Events such as the Siasun Robot&Automation Sports Conference, the high-level prosperity continued in the Siasun Robot&Automation primary market, and the valuation rebound brought by Hong Kong stock liquidity are all beneficial for Siasun Robot&Automation and the intelligent driving sector. The industry trend is still clear, with supply chain companies recently receiving production orders, potentially in a significant configuration window period within the year. Risks 1. Industry prosperity is lower than expected. The recovery of the domestic economy in 2026 is still subject to observation, and the demand in the automotive industry may fluctuate accordingly; a slowdown in consumer income growth or expected fluctuations can affect the effectiveness of trade-in promotions, while insufficient demand in passenger and freight markets can constrain the replacement percentage of commercial vehicles, ultimately affecting the recovery process of automotive industry demand. 2. Policy implementation falls short of expectations. It will take time for the full implementation of policies promoting trade-ins and equipment updates, as well as for policy promotion and information dissemination. It is still necessary to continuously observe whether subsidy funds can be continuously delivered in place, and whether replacement demand can be smoothly released. 3. Export sales fall short of expectations. Exports are influenced by various factors such as international situations, national policies, and exchange rates, and there are risks of fluctuations in overseas sales growth. 4. Deterioration of industry competition. Under the trend of electrification and intelligence in automobiles, domestic complete vehicle manufacturers and component suppliers are actively expanding. With technological advancements, new production capacity deployments, and changes in supply factors, the competition in the industry may intensify in the future, leading to fluctuations in market share and profitability of complete vehicle and component companies. 5. Customer expansion and the progress of new project production fall short of expectations. Under the trend of electrification and intelligence in automobiles, the existing supply chain of complete vehicles and components is undergoing reshaping. Component companies that obtain new customers and incremental new projects may benefit, while the market share of some component companies may be impacted.