China Merchants Securities International: The automotive industry has shown a significant recovery in the second quarter on a quarterly basis, and the investment strategy has shifted to structural exploration.

CICC International Securities has released a research report stating that the darkest moment for the mainland automobile industry has passed, with a significant recovery in the second quarter and a slowdown in industry price wars. Regarding raw material cost pressures, the firm believes that the potential negative impact has been reflected and that leading companies have strong absorption and digestion capabilities. The firm recommends shifting investment strategy from stock game to structural exploration, optimistic about opportunities for high-end, overseas growth and HEV breakthroughs. Among whole vehicle stocks, the firm recommends Geely Automobile, which has great profit elasticity in high-end products and provides support for mid-to-low end car sales and brand strength; its export uses a light asset model, with rapid progress in channels and products. Additionally, the firm is also bullish on BYD, Xiaopeng, and Leap Motor. In automotive parts stocks, the firm believes that Minth Group's new businesses such as humanoid robots, liquid cooling, and low altitude continue to advance, paying attention to orders and progress in the second quarter, providing medium to long-term growth elasticity. Fuyao Glass's logic of average selling price increase continues to be realized, strengthened global layout, and resilient profitability. At the same time, the firm is also optimistic about Weichai Power's expansion into the AIDC new track.