Event: On November 3, 2024, the company released the October 2024 production and sales report. Total sales in October were 0.251 million vehicles, up 4.1% year on year; independent brands sold 0.213 million units in October, up 7.3% year on year; autonomous passenger cars sold 0.168 million units in October, up 3.4% year on year; and overseas sales of independent brands were 0.031 million units in October, up 33.9% year on year.

New energy performance is impressive: the company's independent brand NEV sold 0.085 million vehicles in October, a record high, up 48.6% year on year; from January to October, the cumulative sales volume of its own brand NEV exceeded 0.53 million vehicles, an increase of more than 45% year on year. Changan Qiyuan sold more than 0.018 million units in October, with cumulative sales exceeding 0.15 million units; Deep Blue sold more than 0.028 million units in October, and orders for all models in October were 0.036 million units; Avita sold 1,056 units in October, doubling from month to month.

The blueprint for the future was initially revealed, and new digital intelligent vehicles were vigorously developed: On October 17, 2024, the company participated in the 2024 World Intelligent Connected Vehicle Conference. At the conference, the company believed that cars were evolving into evolvable smart car robots with the functional properties of “mobile multi-functional spaces, intelligent computing terminals, data acquisition carriers, and mobile energy storage units.” New digital cars will be the future development direction. The company will continue to increase resource investment in the field of “new automobiles and new ecology”, invest more than 200 billion yuan in the new automotive technology industry chain, and add a science and technology innovation team of more than 0.01 million people to build evolvable smart car robots.

Investment advice: We expect the company to achieve net profit of 4.754/7.62/10.135 billion in 2024-2026. The corresponding PE was 31.44/19.61/14.75 times, respectively, maintaining the “gain” rating.

Risk warning: Consumer demand falls short of expectations; industry competition intensifies; sales of new models fall short of expectations.