As the current car company with the largest market share in the domestic passenger car market, the company has many research topics to choose from, such as high-end, export, and intelligence. As the first in our in-depth research series, this report will mainly explore current market concerns about the sustainability of the company's sales volume in 2024.
Currently, the market has poor perception of the company's new product cycle. The company's real new product cycle in 2024 is not an Honor model, but a new generation model represented by DM 5.0.
In the short term, the company promoted sales through price adjustments for Honor models, causing the market to believe that the Honor model is the company's new product this year, and there are concerns about the sustainability of the company's sales volume throughout the year. However, the essence of the current Honor model is not a 2024 new product cycle product, but rather a model at the end of the previous product cycle represented by DMI starting in 2021. The company's actual product cycle will begin in April with new products represented by the Qin L (equipped with DM 5.0). Therefore, we believe that 2024 is a big year for the company's new products, and this round of new product cycles after the Honor Edition will bring sustainability to the company's sales volume throughout the year, which is currently not fully recognized by the market.
In the company's pure electric+plug-in hybrid two-wheel drive product matrix, why do we need to pay more attention to plug-in hybrid than pure electricity?
Looking at the industry level, we have investigated a vehicle research framework from a mid-term perspective, and we can conclude that the plug-in circuit is currently the best track (based on the two-dimensional analysis of space and win rate); from the company's perspective, first, the company has been deeply involved in the plug-in hybrid field for many years. The plug-in hybrid model is the company's basic sales volume and is mostly in a higher price range compared to pure electric models. Second, plug-in products were also the anchor of the company's valuation. Through the logic of moving volume → contributing profit → increasing valuation, the company's stock price rose in 2021. Therefore, we believe that with the promotion of a new round of product cycles driven by the DM5.0 plug-in hybrid this year, the company's new vehicle release is expected to bring about a new round of upward valuation center.
How can the company's plug-in hybrid models (current DMi & subsequent DM5.0) maintain their advantage in the face of joint venture brands and independent competitors?
The competition faced by the company's plug-in hybrid models can be divided into two categories. Plug-in hybrid sedan products mainly face competition from joint venture fuel cars. We believe that the company's advantages are mainly ① significantly higher in terms of cost performance compared to competitors+ ② lower fuel consumption brought by plug-in hybrid systems; plug-in hybrid SUV products mainly face competition from own-brand plug-in hybrid SUVs. We believe that the company's advantage in facing autonomous plug-in hybrid SUVs mainly lies in ① the first-mover advantage in terms of consumer perception brought about by the long-term layout of plug-in hybrid racets+ ② technical aspects of cost advantages brought about by simpler architectures. Therefore, we believe that as the next generation of DM5.0 plug-in hybrid systems further improves performance, the advantages of the company's plug-in hybrid models will continue to be maintained.
Profit forecast: Considering the company's new product cycle and high-end & export progress, we expect the company's overall revenue for 2024-2026 to be 8039/9560/1137 billion yuan, respectively, with year-on-year growth rates of 34%/19%/19%; overall net profit to mother of 375/476/54.4 billion yuan, with year-on-year growth rates of 25%/27%/14%, respectively, giving a “buy” rating.
Risk warning: The risk that industry demand falls short of expectations, the cost of upstream raw materials fluctuates greatly, the progress of overseas expansion falls short of expectations, the progress of intelligent models falls short of expectations, and the risk of delays in disclosure of information in reports and untimely updates.