Galaxy Securities: Car inventory will improve by month, demand is expected to be good

July automobile production and sales data released, structural differentiation is obvious. The sales volume of commercial vehicles narrowed down, which was 1.63% lower than the same period of last year. Passenger car sales increased by 14.7% year-on-year, showing the characteristics of strong sales in the off-season. Passenger vehicle wholesale sales increased by 10.7% year-on-year, of which SUVs and micro-subsidiaries continued to maintain rapid growth, with growth rates of 29.4% and 7.6%, respectively. Terminal sales of passenger cars increased 8.4% year-on-year, slower than wholesale sales, indicating that distribution Business inventory pressure still exists. However, from the July production data, the narrow passenger car decreased by 98,000 vehicles in June from the previous month, reflecting the manufacturers’ initiative in production and inventory adjustments, and inventory will improve month by month.

We believe that passenger car sales in the future will increase from the previous year and year-on-year. The improvement in the demand side will come from: (1) improvement of the credit environment and reduction of the cost of buying cars; (2) the release of new models in the second half of the year, and the release of demand for holdings in cash; ( 3) Short-term irritating events: The pre-school car boom and concerns over purchases lead to early purchases.

Maintaining the industry's "recommended" investment rating, it is recommended that SAIC Motor, Huayu Automotive and Jingwei shares benefit from structural optimization, stable growth in performance, and low valuations.