A few days ago, 20 auto companies, including Volkswagen, General Motors and Toyota, have signed agreements driven by relevant departments in the United States to make AEB (automatic braking system) a standard configuration by 2022. Because AEB fully covers the three modules of perception, algorithm and execution, the addition of this function module will directly reduce traffic accidents by 40%. Unlike the basic ADAS function, AEB strong events will have a significant impact on smart driving, maintaining the industry's "recommended investment" rating.

AEB strong equipment will pry the executive layer hundreds of billions of market. Different from the basic ADAS function, the AEB function consists of three modules: perception module, algorithm module and execution module. The basic function of ADAS, which usually does not involve reverse control, only contains the first two modules, that is, the "early warning system" that the market usually understands. The threshold of the early warning module is relatively low, and the customer concentration is not high, while the execution module is really related to the personal safety and driving control experience of drivers. On the one hand, the whole car factory is sure to keep a firm watch. On the other hand, the corresponding spare parts factory must exist in the industrial chain as a first-class supplier, and it will be the best link to extend upstream and downstream mergers and acquisitions.

We believe that the fact that AEB has been designated as a standard configuration event by 20 vehicles in the United States is a key milestone in the development of intelligent driving to self-driving, because the hardware modules included in AEB already have the basis for self-driving, and subsequent upgrades to individual systems can meet the hardware requirements for self-driving. According to the basic ADAS to advanced functions, the current price of the executive layer system ranges from 3000 to tens of thousands of yuan. at present, the AEB system in Europe and Japan already has a high assembly rate, and the American and Chinese models start relatively late. The announcement by the United States that AEB will be a standard configuration before 2022 will undoubtedly have a great impact on the Chinese market. We believe that the executive leader will have three core advantages: high market concentration, customer advantage and strong integration between upstream and downstream, and the market scale will be more than 100 billion.

The core of perception and cognition layer lies in algorithm and data. In the previous "realization path" of the Smart car Series report, we explained in detail that the algorithm is the core of the perception and cognitive layer. market size and competition pattern, front and rear market prospects, mainstream technology paths and domestic manufacturers' industrial opportunities are the four major issues that the market is most concerned about in the auxiliary driving stage. We continue the following point of view:

1, the market "independent" brand moneymaking effect and policy drive is obvious, AEB, ESC is expected to take the lead in the outbreak.

2. The rear loading market can not be involved in the executive layer, and the front outfit is the general trend.

3. "camera + millimeter wave radar" is the best choice among accuracy, responsiveness and cost.

4. Extension expansion is the best shortcut to get involved in the intelligent driving market at this stage.

Investment strategy. ADAS is the focus of industry development at present.

1. There is great potential for the development of the entrance to the vehicle network. Key recommendations of the automotive industry: Xingmin steel ring,Average victory electron。

2. The event of compulsory installation of AEB will pry the invisible faucet of the domestic executive layer. Key recommendation: top Group.

Recommended: Asia Pacific shares,Wan'an Science and Technology, Central Plains Internal allocation,Xingyu co., Ltd., Dongfeng Technology,Jin Gu sharesWait. In addition, it is more advantageous for electric vehicle enterprises to turn to intelligent cars.

Risk hints: the scale of the enterprise in the promotion stage is too small, and the performance is difficult to be cashed quickly; laws and regulations promote backward expectations.