CICC: Auto companies' “win-win” model has been initially verified. Strong product cycle and intelligent resonance

The Zhitong Finance App learned that CICC released a research report saying that in 2024, Hongmeng Zhixing and HI sales both ushered in significant growth. An inflection point in the performance of Cyrus (601127.SH) and Hope appeared, and the “win-win” model was initially verified. The new “Huawei series” car cycle in 2025 is still strong. We are optimistic about the launch performance of various blockbuster models such as the M8. Smart driving+robots are also expected to be catalyzed. With car companies such as BYD (01211) announcing smart driving as standard, consumers' awareness of smart driving is expected to increase rapidly. In a horizontal comparison, Huawei's ADS smart driving capabilities are in the first tier and are expected to empower all Huawei models. It is recommended to focus on Huawei-related vehicle and industrial chain investment opportunities.

CICC's main views are as follows:

Hongmeng Zhixing's sales volume increased in 2024, and HI models faced marginal improvements, hoping to independently enter a new stage of foreign cooperation

The Hongmeng Zhixing brand sold 446,000 units for the full year of 2024, a sharp increase over the previous year. Monthly sales showed a fluctuating upward trend. Among them, Quanjie contributed the main sales volume, which has increased significantly since 4Q24. Along with the improvement of the model matrices and channel optimization of various brands, the total sales volume of Hongmeng Zhixing rose steadily. Cooperation in the HI model deepened, and the launch of key models such as the Avita 07, 11/12 extended-range models, and the Rantu Dreamer Qiankun Edition brought about increases, and more car companies joined the HI model. In 2024, it is hoped to split independently as an intelligent solution provider. Celis and Avita have already taken shares. Huawei and car companies have upgraded from strategic cooperation to equity cooperation, further deepening the cooperative relationship and accelerating the intelligent empowerment of car companies.

In 2025, the new Huawei car cycle is still strong, and the inflection point of Cyrus and Guan's performance supports a “win-win” business model

CICC expects that major models such as the Wenjie M8, the Xinjie S9 Extended Range Edition, and the Zunjie 800 are expected to be launched from 1-2 Q25. Among them, the pre-sale price of the Wenjie M8 starts at 368,000 yuan, and the company plans to go public in April. The HI model's partners continue to expand, and it is expected to take over the product cycle in 26 years and usher in the intensive launch of more models. The performance of Cyrus and Dianwang has initially verified the “win-win” model of Hongmeng Zhi's behavior. Cyrus's profit was corrected in 2024, and the net profit of 3Q24 bicycles reached 20,000 yuan; the net interest rate for 1H24 increased to 21%.

Intelligent business has broad prospects, and I am optimistic about embodying new smart development points

With car companies such as BYD announcing smart driving as standard, consumers' awareness of smart driving is expected to increase rapidly. Looking at horizontal comparisons, Huawei's ADS smart driving capabilities are in the first tier and are expected to empower all Huawei models. At the same time, smart driving technology is interconnected at the bottom level. It is also noted that on November 15, 2024, the Huawei (Shenzhen) Global Embodied Intelligent Industry Innovation Center announced the official operation of the Huawei (Shenzhen) Global Embodied Intelligent Industry Innovation Center. CICC believes that by analogy with Huawei's layout of the automotive industry, it mainly participates in electric smart components/product definition/channel marketing, etc., and that hardware uses a cooperative OEM model to reduce fixed asset investment. Considering the stickiness of customer cooperation, previous automakers have also had the opportunity to enter their own intelligence-related industry chain.

Profit forecasting and valuation

Maintain the company's profit forecast for 2024/2025/2026. We recommend Cyrus (601127.SH), which has already started to warm up new cars and has a strong sense of performance growth. Focus on Changan Automobile (000625.SZ), JAC (600418.SH), and SAIC Motor Group (600104.SH). Other relevant targets in the industrial chain include BAIC Blue Valley (600733.SH), etc.

risk factors

Sales of new cars fell short of expectations; the supply of smart driving chips fell short of expectations.