Soochow Securities' 2026 Auto Sector Strategy: Embracing "Disruptive Innovation"

Stock News12-19 17:02

Soochow Securities has released a strategic research report suggesting that the automotive industry in 2026 may mirror pivotal transition years like 2011 or 2018 (as a baseline scenario), standing at a new crossroads. While the electrification boom nears its end, intelligent transformation is gaining momentum, with commercial vehicles/two-wheelers emerging as complementary investment areas. The firm proposes two key approaches: 1) Identifying cyclical resilience (α plays), and 2) Capitalizing on next-gen trends (smart tech + robotics/AIDC). Key insights include:

**2026 Auto Sector Outlook** 1) **Passenger Vehicles**: Domestic demand is projected at 22M units (-3.5% YoY), with NEVs accounting for 13.2M (+6.4%). Export demand may hit 6.41M (+12%), including 3.52M NEVs (+43.9%), impacted by a 5% NEV purchase tax. 2) **Heavy Trucks**: Neutral forecast anticipates 1.16M wholesale sales (+1.5%), with domestic at 770K (-5.5%) and exports at 390-400K (+18.8%). 3) **Buses**: Domestic-export synergy continues, with exports likely growing >30% (faster for NEVs). Domestic sales: 81K (+3%); exports: 76.4K (+30%). 4) **Motorcycles**: Total sales may reach 19.38M (+14%), including 1.26M large-displacement bikes (+31%). Domestic: 3.99M (-9%); exports: 15.39M (+21%).

**Value Picks (Cyclical Resilience)** - Buses: Yutong Bus (priority), King Long Motor. - Motorcycles: CFMOTO, Loncin Motor. - Heavy Trucks: Sinotruk Hong Kong, Weichai Power. - Passenger Vehicles: BYD (top pick), JAC Motors. - Components: Fuyao Glass, Lingyun Industrial, Minth Group.

**Growth Themes** 1) **L4 RoboX**: Focus on B2B software over B2C hardware. - HK Connect: XPeng + Horizon Robotics + Pony.ai/WeRide + CaoCao/Black Sesame. - A-shares: Qianli Tech + Desay SV + JINGWEI Hirain. 2) **Robotics/AIDC**: Overseas Optimus V3 finalization in 2026 may accelerate Tesla supply chain scaling (1→10); domestic players diversify with faster capital inflows. - Robotics & Cooling: Top Group (top pick). - Robotics: Joyson Electronics (priority), Xingyuan Zhuoma, YAPP. - Cooling: Yinlun, Feilong Auto Parts.

**Risks**: Subpar trade-in policies; escalating trade wars; price wars; lagging smart-tech innovation/regulation; delayed robotics mass production.

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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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