Gf Securities: Bullish on Overseas Automakers' Intelligent Transition 0-1, China's Smart Supply Chain Seizes Global Opportunities

Stock News12-02

Overseas automakers are facing declining market shares, prompting them to accelerate intelligent upgrades (0-1 phase) to enhance product competitiveness. However, due to the lack of a mature intelligent supply chain abroad, China's smart automotive ecosystem is presented with new global opportunities. Gf Securities believes companies with competitive technological advantages and strong global client resources are poised to lead in this industry trend.

**Key Insights:** 1. **Declining Market Share Drives Intelligence Push** - In China, domestic brands have increased their market share from 35.5% in 2020 to 64.9% in the first nine months of 2025 (based on compulsory insurance data). - Globally, excluding Russia, Chinese brands' weighted market share rose from 2.1%/1.9% in January 2021 to 9.9%/7.6% in July 2025 (per MarkLines). - Overseas automakers lag in high-level autonomous driving (L2+), with China leading the U.S. (excluding Tesla), Europe, Japan, and South Korea. Boston Consulting forecasts 2025 L2+ penetration rates: China (10%), U.S. (6%), Europe (1%), Japan (1%), India (0%), and other regions (2%).

2. **China’s Smart Supply Chain Gains Global Edge** - With weak intelligent supply chains in Europe, Japan, and South Korea, China’s ecosystem is well-positioned for globalization. Firms excelling in technology and client networks will likely emerge as frontrunners. - Priority sectors benefiting from overseas automakers’ intelligence transition: 1. Integrated driving domain controllers ~ cockpit electronics 2. AI chips ~ LiDAR ~ algorithms 3. Chassis electronics

3. **Faster and More Certain Industry Trend** - China’s intelligent transition (0-1 phase) began around 2020, maturing over 3-4 years. Its supply chain now boasts global competitiveness in chips, algorithms, LiDAR, and Tier 1 automotive electronics. - Consumer acceptance and proven supply chain feasibility suggest overseas automakers’ intelligence shift will progress more rapidly. - Early stock price drivers in this phase: orders and new product launches.

**Investment Recommendations:** Focus on: - Driving domain control: Keboda, Joyson Electronics - Cockpit electronics: Tianyouwei, Shanghai Shenghua - AI chipmakers - LiDAR: Hesai Technology, RoboSense - Algorithm providers

**Risks:** Policy delays, regulatory gaps, and core component shortages.

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