Maintain an increase in holdings rating. Maintain the company's 24-26 EPS at 11.95 yuan, 15.32 yuan, and 18.94 yuan. The industry leader was more certain during the clean-up process, and the target price was maintained at 274.62 yuan.
May sales exceeded market expectations. In May '24, the company achieved sales of 331,800 new energy vehicles, an increase of 5.9% and 38.1%. Among them, there were 146,000 pure electric passenger cars, an increase of 22.4%; 184,000 hybrid vehicles, an increase of 54.1%; and 37,499 overseas passenger cars, an increase of 267.5%. From January to May '24, the company achieved cumulative sales volume of 1271,325 new energy vehicles, an increase of 26.8% over the same period.
New energy products continue to be iterated. On May 28, the company launched the fifth-generation DMI hybrid technology with a range of more than 2,000 kilometers. The starting price of the new models Qin L and SEAL 06 is only 99,800 yuan, which is extremely cost-effective. According to data from the China Automobile Association, passenger cars with a price tag of 80,000 to 200,000 from January to April 2024 accounted for 59.2% of the overall passenger car market share, of which 30.2% of the new energy penetration rate still has room for improvement. We believe that the introduction of the company's fifth-generation DMI technology is expected to strengthen the company's market competitiveness in the hybrid field and is expected to better equalize demand in the main price range for fuel vehicles.
“Domestic substitution” is accelerating, and the performance of leading players is highly certain. According to China Automobile Association data, in April 2024, Chinese brand passenger cars accounted for 63.5% of China's passenger car market share, an increase of 8.4 pct over the same period. We expect that in the context of the acceleration of electrification and the increase in the product power of domestic OEMs, the share of domestic car companies is expected to increase further. As an industry leader in the field of new energy vehicles, the company combines the middle and high-end with overseas. The integrated and adequate layout of the industrial chain will further iron out the impact of short-term industry fluctuations, and performance is more certain due to concerns about price wars.
Risk warning: demand for new energy falls short of expectations, and the price war in the new energy industry intensifies