China Securities Co., Ltd.: The export of passenger vehicles exceeds expectations again. Siasun Robot & Automation is on the verge of a mass production + capitalization double blow.

China Securities Co., Ltd. released a research report stating that the automotive sector is experiencing intensive catalysts. On August 1, the mainstream manufacturers disclosed concentrated production and sales/delivery data for July, with the export chain once again exceeding expectations comprehensively. During this off-peak season for domestic demand, structural alpha further concentrates on overseas markets. The A-share human-shaped Siasun Robot & Automations first stock pricing anchor is about to be established, along with the clear production schedule of the Tesla Optimus production line within the year and the approaching World Siasun Robot & Automation Conference on August 19. August becomes a concentrated window for mass production validation + capitalization for Siasun Robot & Automation. For commercial vehicles, Junes heavy truck sales show that the off-season is not off-season, and July sales will be released soon, with the logic of continued increase in both leading company performance and valuation. The main points from China Securities Co., Ltd. are as follows: Passenger Vehicles This week, the production and sales/delivery data from manufacturers for July are being disclosed sequentially, continuing to show the characteristics of "domestic demand under pressure during the off season and strong export performance exceeding expectations." The Passenger Car Market Information Association estimates that retail sales for narrow passenger vehicles in July were approximately 1.52 million units, of which about 980,000 were new energy vehicles, with a penetration rate reaching a record monthly high of 64.5%. Due to last year's demand being pulled forward and the impact of high temperatures and heavy rain during the peak summer months, pessimistic expectations for domestic demand continue to be priced in. Highlights on the export side include: BYD Company Limited sold 419,000 vehicles in July (up 21.8% year-on-year), with overseas sales at 179,800 units, a year-on-year increase of 124.3%, and the Equation Leopard up 190.6% year-on-year; Chery Group at 277,000 units (up 23.3% year-on-year), becoming the first Chinese car company to export over 200,000 units in a single month, with 129,000 new energy vehicles, up 97.5% year-on-year; Geely at 250,000 units has seen five consecutive months of both year-on-year and month-on-month increases, with exports of 106,700 units up 202% year-on-year reaching a new high, and Zeekr up 111% year-on-year; Leap Motor delivered 101,000 vehicles (up 102% year-on-year), becoming the first new force to sell over 100,000 units in a month. Xiaopeng delivered 38,000 vehicles in July (up 4% year-on-year), with a slight decline quarter-on-quarter mainly due to limited capacity of the Mona L03. As capacity ramps up, it is expected to return to an upward trend. We maintain our previous view: the pessimistic expectations for domestic demand have been fully priced in, and August enters a period of intensive interim report disclosures. The actual performance for Q2 and expectations starting in Q3 will determine the sustainability of the market; we continue to be optimistic about the structural alpha from exceeding expectations in passenger vehicle exports and the acceleration of high-end new energy vehicle volumes, and see positive valuation space in the new paradigm of physical AI reconstruction growth. Commercial Vehicles We continue to recommend leading companies in the overseas market such as Sinotruk Jinan Truck, AI power leader Weichai Power, and bus export leader Yutong Bus Co., Ltd. In June, the wholesale sales of heavy trucks reached 115,000 units, up 18% year-on-year, and the cumulative sales for the first half of the year were 660,000 units, up 22% year-on-year, reaching a new five-year high, validating the resonance logic of scrapping and renewal policies and exports despite the "off-season not being off-season." Julys heavy truck sales (to be released soon) are expected to remain steady, with wholesale sales expected to be around 100,000 units, a year-on-year increase of about 20%, of which exports will maintain a high level of around 40,000 units (June exports up 35% year-on-year). Sinotruk Jinan Truck disclosed in this weeks research that the export sales ratio has exceeded half of total sales for the first half of the year. Heavy Truck International has maintained the industrys leading export position for 21 consecutive years, reinforcing its status as a leading overseas company. Weichai Powers data center continues to emphasize the logic of simultaneous price and volume increases for large-bore engines, and the second growth curve for AI power continues to be realized. In the bus sector, nearly 30,000 mid-to-large buses were exported in the first half of the year, up 12% year-on-year. Yutong's production and sales report for July will be disclosed soon, showing optimism for fulfilling Q2 performance and flexibility in the second half amid the peak export delivery season. After the release of risks in China-Europe trade, the odds/ratio remains prominent. Physical AI 1) The main line of Siasun Robot & Automation mass production rhythm + capitalization dual catalysts is being realized. Teslas Q2 financial report further clarifies the production path for Optimus: the production lines for the Model S/X at the Fremont factory have been stopped, and the first-generation production line for Optimus is being installed, expected to go into production later this year, with the first batch of products to be used for collecting training data at the Optimus Academy. Musk stated that the human-shaped Siasun Robot & Automation is the most challenging mass production ramp-up in the company's history, with planned capital expenditures exceeding $25 billion by 2026 marking the start of mass production. On the domestic side, Yuzhu Technology announced on July 30 that it is starting the issuance process: the listing of "the first human-shaped Siasun Robot & Automation stock" is expected to trigger a reassessment of the value of embodied intelligence sectors; Zhiyuan has initiated the listing process in Hong Kong, and UBTECH ROBOTICS has accumulated over 630 million yuan in human-shaped Siasun Robot & Automation orders this year. Looking ahead, the World Siasun Robot & Automation Conference will be held in Beijing Yizhuang from August 19-23, becoming the next concentrated catalyst node. We recommend focusing on Teslas supply chain, high win rates, technology upgrade directions, undervalued companies with expected differences, and domestic complete machine chains such as Yuzhu with the capacity for significant volume increases. 2) The core catalyst in the smart driving sector is approaching: Teslas FSD supervision version is expected to be approved; Musk stated that the Robotaxi fleet in Austin will double in size by August, accelerating the overseas commercialization deployment. The medium to long-term trend of smart driving advancing upwards remains clear, and we are optimistic about the suppliers of incremental components and solutions under the L3/L4 industry trend. Recommended Portfolio: Anhui Jianghuai Automobile Group Corp., Ltd., Weichai Power, Sinotruk Jinan Truck, Yutong Bus Co., Ltd., Xiamen King Long Motor Group, Xiaopeng Motors, Hesai, GEELY AUTO, Loncin Motor, Wuxi Best Precision Machinery, Zhejiang Sanhua Intelligent Controls. Risk Warning 1. Industry prosperity may fall short of expectations; 2. The effects of policy implementation may not meet expectations; 3. Export sales may fall short of expectations; 4. Deterioration in industry competition landscape; 5. Customer expansion and new project mass production progress may lag behind expectations.