Incident: The company released the June production and sales report: the Group's wholesale sales volume in June was 0.225 million vehicles, +8.8% YoY, +12.7%; 2024M1-6's cumulative wholesale sales volume was 1.334 million vehicles, +9.7% YoY. Wholesale sales of autonomous passenger cars in June were 0.138 million units, +0.1% YoY, +12.2%; 2024M1-6 had cumulative wholesale sales of 0.822 million units, +7.0% YoY; Changan Ford's June wholesale sales volume was 0.0195 million units, -3.2% YoY, +9.0%; 2024M1-6 had cumulative wholesale sales of 0.112 million vehicles, +13.4% YoY; Changan Mazda's June wholesale sales volume was 0.0055 million units Million vehicles, -25.3% YoY, -7.2% month-on-month; cumulative wholesale sales of 2024M1-6 were 0.037 million vehicles, +14.4% YoY.
Sales were relatively stable in June, and Avita continued to shine. In June, the company's wholesale sales volume of autonomous passenger cars was 0.138 million units, +0.1% year over year, and +12.2% month on month, which is a significant increase from month to month. In terms of new energy, it benefited from the month-on-month increase in sales of Deep Blue. The wholesale sales volume of independent new energy vehicles in June was 0.064 million units, +15.6% month-on-month, and the cumulative wholesale sales volume of the 2024M1-6 was 0.299 million units, +69.9% year-on-year; of these, Deep Blue sold 16,659 units and Avita 4,682 units in June, a steady increase from month to month. On June 13, Deep Blue G318 was launched. The price was 0.1759-0.318 million yuan. The 5-day order exceeded 0.014 million yuan, and the customer unit price exceeded 0.225 million yuan. The overall demand performance was excellent. Looking forward to the future, the company will launch major models such as the Deep Blue S07, Avita 15/16, and Qiyuan E07. The strong product cycle will drive the acceleration of the transformation of new energy sources.
Overseas sales are growing at an accelerated pace, opening up the global market. In June 2024, autonomous overseas sales volume was 0.029 million vehicles, +46.3% year over month, -11.9% month on month; 2024M1-6's overseas sales volume was 0.203 million units, +74.9% year over year, and -11.9% month on month, which declined due to short-term capacity. The first phase of production capacity of the company's global “right steering production base” in Thailand will be put into operation in Q1 2025. The first phase production capacity will be 0.1 million vehicles, and the total production capacity will increase to 0.2 million vehicles after the second phase. The company expects to complete entry into the two key regional markets of ASEAN and Europe by 2024. The idea of globalization is clear and the pace is firm, which is expected to open up room for long-term growth.
Huawei's cooperation is steadily advancing the development of intelligence. In November 2023, the company signed a “Memorandum of Investment Cooperation” with Huawei to deepen cooperation; on January 16, 2024, Huawei completed the registration of the target company, the name of which is Shenzhen Yinwang Intelligent Technology Co., Ltd., whose business scope mainly includes automotive intelligent driving solutions, car smart cockpits, smart car digital platforms, smart car clouds, AR-HUD and smart car lights; on May 6, 2024, the company announced that it is expected to sign the final transaction document no later than August 31, 2024. We believe that Huawei is deeply involved in smart driving and core cockpit technology; as a shareholder of the target company, the company is expected to enjoy the target company's technology and product resources, benefit from Huawei's intelligent empowerment, effectively enhance product competitiveness, and accelerate intelligent electric transformation.
Investment advice: We are optimistic about the company's electric intelligence transformation, combined with Huawei's intelligent power to maintain profit forecasts. We expect revenue for 2024-2026 to be 183/208.6/234.6 billion yuan, net profit to mother of 8.01/10.5/13.45 billion yuan, and EPS of 0.81/1.06 /1.36 yuan respectively, corresponding to the closing price of 13.89 yuan/share on July 3, 2024. PE is 17/13/10 times, respectively, maintaining the “recommended” rating.
Risk warning: Cooperation with Huawei fell short of expectations; sales of independent brands fell short of expectations; delivery of autonomous new energy models fell short of expectations; and the “price war” in the industry intensified.