Key investment points

A “Smart New Energy Vehicle Cooperation Agreement” was signed with Huawei to launch an intelligent selection model to jointly create the prestige of high-end brands.

In December 2019, the two sides signed a preliminary cooperation agreement, which plans to conduct in-depth cooperation in areas such as intelligent driving, smart cockpit, smart electricity, intelligent connectivity, and cloud services.

In December 2023, JAC and Huawei Terminal Co., Ltd. signed a “Smart New Energy Vehicle Cooperation Agreement”, becoming Huawei's fourth smart car company.

In March 2024, according to EIA data, JAC will build a gigafactory with an annual output of 0.2 million vehicles to develop an X6 platform powered by Huawei's intelligent technology, covering models from B-class to D+, which can be adapted to the development of various vehicle platforms such as large cars, SUVs, and MPVs. In November of the same year, the high-end ultra-luxury brand “Zunjie”, a partnership between Huawei and JAC, debuted.

Huawei is positioned as a luxury model in the fourth tier, and is expected to open up a high-end intelligent product cycle for JAC.

The Zunjie S800 is positioned as a luxury D-Class. The vehicle is 5.48 meters long, 2 meters wide, 1.54 meters high, and has a wheelbase of 3.37 meters. The L3 autonomous driving hardware design architecture will be equipped with the Huawei Qiankun ADS 3.0. Pre-sale prices range from 1 million to 1.5 million yuan. The number of pre-orders reached 2108 units within 48 hours.

The Zunjie S800 is built on the X6 platform. The X6 platform can be used for various models such as large cars, SUVs, and MPVs. In the future, it is expected to open up a high-end intelligent product cycle for JAC and achieve rapid sales growth.

OEM NIO has accumulated high-end car building capabilities, laying a solid foundation for Huawei to cooperate with high-end models.

In 2017, the company cooperated with NIO to jointly build a world-class intelligent manufacturing factory and established “Jiang Lai”. Using the “Internet+Intelligent Manufacturing” model, it has the first high-end all-aluminum body production line from a domestic independent brand. The overall automation rate for welding is as high as 97.5%, which has reached a world-class level.

Passenger car+commercial vehicle two-wheel drive, JAC has a rich product matrix.

Passenger cars: Ruifeng RF8 is the world's first MPV equipped with a Huawei Hongmeng smart cockpit. The company's MPV has strong building capabilities.

Commercial vehicles: JAC commercial vehicles include trucks, buses, special vehicles and other types of vehicles to meet the diverse needs of various users. Its light truck product sales rank among the highest in the country for a long time. From January to September 2024, JAC's light truck ranked in the top five in the country.

Profit forecasting and valuation

The company's 2024-2026 revenue is estimated to be 44.403/62.628/68.045 billion yuan, YOY -1.2%/41.0%/8.7%; the estimated net profit to mother for 2024-2026 is 0.71/1.34/1.72 billion yuan, YOY is 371.3%/87.7%/28.6%, EPS is 0.33/0.61/0.79 yuan/share, corresponding PE is 119.11/63.46/49.34 times. Give it a “buy” rating.

Risk Alerts

NEV penetration falls short of expectations; development of intelligent driving falls short of expectations; sales volume falls short of expectations