According to the SmartFinance app, Soochow Securities released a research report stating that it is bullish on the global trend of automotive globalization. From the perspective of 2024, comprehensive internal and external resonance + performance certainty + valuation, the ranking is as follows: buses > heavy trucks > passenger vehicles / components. For buses, the preferred options are Yutong Bus Co., Ltd. (600066.SH) and Xiamen King Long Motor Group (600686.SH), etc. For heavy trucks, the preferred options are Sinotruk (000951.SZ), Weichai Power (000338.SZ), FAW Jiefang Group (000800.SZ), Beiqi Foton Motor (600166.SH), etc.

Each passenger vehicle company has its own advantages in expanding overseas markets. The cooperation partner model is expected to progress faster in the short term, such as Geely Auto + Leap Motor (09863) + SAIC Motor Corporation (600104.SH), etc. For pure internal growth models, companies with bright spots in the Russian market, such as Great Wall Motor Group (601633.SH), and companies with significant cost advantages in electrification, such as BYD Company Limited (002594.SZ), are preferred. Both the internal growth model and the acquisition model are worth paying attention to for component companies. For the internal growth model, Tesla's supply chain, Jiangsu Xinquan Automotive Trim Co., Ltd. (603179.SH), Ningbo Tuopu Group Co., Ltd. (601689.SH), Ningbo Xusheng Group Co., Ltd. (603305.SH), IKD Co., Ltd. (600933.SH), etc. For the acquisition model, Joyson Electronics Corp. (600699.SH), Nexteer (01316), etc. are favored.

The main viewpoints of Soochow Securities are as follows:

Passenger vehicle exports: Passenger vehicle exports declined month-on-month in July.

In July, the China Association of Automobile Manufacturers (CAAM) reported that passenger vehicle exports reached 0.399 million units, with a month-on-month growth rate of +22.4%/-1.0%. Tesla/ BYD/ Great Wall Motor/ SAIC Motor Corporation had month-on-month growth rates of +137.4%/+11.2%/+5.6%/+4.2% respectively, while other car companies experienced declines.

In terms of destination, 1) Total volume: The top three regions for passenger vehicle exports in July were the Commonwealth of Independent States (CIS), the Middle East, and Latin America, with export volumes of 0.123 million / 0.085 million / 0.077 million units, and year-on-year growth rates of +22.1% / +32.0% / +61.2% respectively. In terms of growth rates, the highest growth rates for passenger vehicles in July were in East Asia, the Middle East, and Southeast Asia (excluding Africa due to low base), with year-on-year growth rates of +159.6% / +61.2% / +40.9% respectively.

2) New energy flow: The top two regions for new energy passenger car exports are the Middle East/Latin America (excluding Africa due to low base), with export growth rates of +110.4%/+96.3% year-on-year respectively; In July, the top two regions for new energy passenger car exports were Europe/Asia, with export volumes of 0.05/0.052 million vehicles respectively.

Truck exports: Truck exports in July decreased compared to the previous month, as expected.

According to the China Association of Automobile Manufacturers (CAAM), truck exports in July were 0.022 million vehicles, with month-on-month and year-on-year declines of -12.9%/-8.7% respectively, as expected; From January to July, cumulative truck exports were 0.173 million vehicles, a year-on-year increase of +6.0%. In July, exports to Russia decreased by 64% year-on-year, while exports to non-Russian regions increased by 30% year-on-year. Exports to Russia in July were 0.0069 million vehicles, with month-on-month and year-on-year declines of -64%/+13%, indicating a significant decline compared to the previous year; Exports to non-Russian regions were 0.018 million vehicles, with month-on-month and year-on-year increases of +30%/+8%, including 0.5/0.006/0.003/0.002 million vehicles exported to Asia/Africa/the Middle East/Latin America respectively, with year-on-year increases of +53%/+19%/+72%/+19%, driving the overall growth of exports.

Bus exports: Export sales volume declined in July, with higher growth rates in the Middle East/Oceania/Africa.

Export sales (based on Medium Bus Network): In July, the export sales volume of medium and large buses was 2751 vehicles, with month-on-month and year-on-year changes of +1%/-36%; The export sales volume of new energy buses was 652 vehicles, with month-on-month and year-on-year changes of -8%/-30%. Export destinations (customs data): 1) Overall: The top three regions for medium and large bus exports in July were Oceania/Africa/Europe, with year-on-year export growth rates of +240%/+73%/+22%; The top three regions for medium and large bus exports in terms of export volume in July were the Middle East/CIS/Latin America.

2) New energy: In July, the regions with the highest growth rates for new energy medium and large bus exports were the CIS/Oceania; The top three regions for new energy medium and large bus exports in terms of export volume in July were Latin America/Asia/Europe, with export volumes of 160/152/143 vehicles respectively.

Risk factors: Trade friction risks; Geopolitical uncertainty risks; Exchange rate fluctuation risks, etc.