The better-than-expected car sales data in May (through the data of the Federation) corrected the market’s previous pessimism to a certain extent: In May, the sales of passenger vehicles were 859,900, an increase of 3.5% over the same period of last year, better than market expectations; with 5 Monthly mainstream manufacturers started to resume production in Japan, and the acceleration of new models in the later period led to a boom in the industry.

From June to June, the negative effects caused by the withdrawal of policies have been basically digested, and the growth rate of the industry has returned to natural. In the second half of the year, even if the subsidy standard for energy-saving vehicles is increased, the disturbance will be mainly reflected in the second half of the second half of the year, affecting the total sales volume of the whole year. Smaller; and in the foreseeable future, taking into account the automobile as an important pillar industry of the national economy and local taxation, there is little possibility that the policy will continue to be overweight; the latest tracking of passenger car inventory is still at historically high levels. Although theoretically the best time for the allocation of auto stocks is the mid to late destocking period, but the market's overall underestimation of the industry or will be ahead of the investment time of high-quality auto stocks, the overall market valuation will also increase the market's structural opportunities; From a prudent perspective, the current automobile sector also enjoys a relatively sufficient margin of safety: the current 9-fold valuation is at a historically low level, which means that the decline in the previous stock price has basically absorbed the pressure of further downward valuation;

The business climate is still running at a low level, but the direction of upward recovery is certain. The rebound will further strengthen the industry's structural opportunities since the beginning of the year. We strongly recommend investors to pay attention to high-quality companies with low valuation and certainty in performance growth: Shanghai The automobile possesses the two most high-quality joint venture companies. The strong performance of the existing models will further enhance the company's profitability, and the introduction of incentive policies in the future will further enhance investors' expectations for the stable growth of the company's performance; Yueda Investment: The company will benefit from The excellent performance of the SUV models and the increased profitability of the high-end models;

Risk Warning: Changes in the macro economy have affected the demand for automotive terminals, and policies have further increased the sales volume to be less than expected and market-based systemic risks.