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汽车行业研究报告:国泰君安国际-汽车行业:严重的空气污染将提高新能源汽车销售-140129

研报作者:陈欢瑜 来自:国泰君安国际 时间:2014-01-30 10:31:56
  • 股票名称
    汽车行业
  • 股票代码
  • 研报类型
    (PDF)
  • 发布者
    sum****een
  • 研报出处
    国泰君安国际
  • 研报页数
    25 页
  • 推荐评级
    跑赢大市
  • 研报大小
    1,153 KB
研究报告内容

G TJ A R es ea rc h 国泰 君安 研究 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Sector Report: Automobile Sector Harry Chen陈欢瑜 行业报告:汽车行业 +8675523976683 chenhuanyu@gtjas.com 29 January 2014 Severe Air Pollution May Boost NEVs Sales 严重的空气污染将提高新能源汽车销售 The adoption of new energy vehicles (“NEVs”) in China has been much slower than that of developed countries. The sales of NEVs, including hybrid electric vehicles (“HEVs”), increased 41.2% YoY to 32,700 units, accounting for 0.1% of total vehicle sales in China in 2013. The penetration of NEVs in China was much lower than that of U.S. and Japan, which were 3.4% and 16.0%, respectively. Even though the development of NEVs in China started up at about the time as that of the U.S., the adoption of NEVs in China has been much slower than that of the U.S., mainly due to local protectionism and lack of charging facilities. NEV sales are expected to surge in China during 2014 and 2015. The new government policies for NEVs may reduce the effect of local protectionism, as well as ease the financial pressure for local government. In addition, severe air pollution in large cities is expected to push local government to act much quicker to adopt NEVs. Therefore, the promotion plans for 2013-2015 of the pilot cities in the second wave of 10-city 1000-NEVProgram are nearly 2.7x that of the first wave. We expect EVs (electric vehicles, including electric vehicles and plug-in hybrid vehicles) sales to grow rapidly to 28,000 units and 48,000 units in 2014 and 2015, respectively. Maintain “Outperform” rating for automobile sector and favour NEV makers. Even though vehicle sales growth of China in 2014 is expected to slow down to 12% YoY, the level of prosperity is expected to remain high. Therefore, we maintain “Outperform” rating for automobile sector. We favour NEV makers since they may benefit from rapid growth of NEV sales. 中国新能源汽车的推广速度慢于发达国家。

包括混合动力汽车在内的新能源汽车在中国的 销售为3.27万辆,同比增长37.9%,渗透率为0.1%,远低于美国和日本的3.4%和16.0%。

中国的新能源汽车的起步与美国基本同步,但是推广速度远慢于美国。

中国政府对新能源 汽车的补贴很高,但是推广却受到地方保护主义和基础设施的建设滞后的影响而步伐缓慢。

预计2014年和2015年的新能源汽车在中国将有快速的增长。

新推出的新能源政策抵制了 部分的地方保护主义和减少当地政府的财政负担。

严重的空气污染逼使各地政府更加积极 的推广新能源汽车的应用,所以第二轮的“十城千辆”的示范城市定的目标比第一轮的高 出2.7倍。

我们预计2014年和2015年中国电动车(包含纯电动和插电式混合动力)的销 量将大幅提高到2.8万和4.8万辆。

我们维持行业“跑赢大市”评级,看好新能源汽车制造商。

虽然2014年的汽车销售增长 将放缓,但是景气度仍然维持,因此我们维持行业“跑赢大市”的评级。

我们看好新能源 汽车制造商,因为它们将受益于新能源汽车的大幅增长。

Rating: Outperform Maintained 评级:跑赢大市(维持) Global NEVSales 全球新能源汽车销量 Source: HIS, Fourin, Guotai Junan International, China NEVSales 中国新能源汽车销售 Source: CAAM, Guotai Junan International Company Name 公司名称 Code 编号 Price 股价 (HK$) Rating 投资评级 13 PER 市盈率 (x) 14PER 市盈率 (x) 15 PER 市盈率 (x) 14 ROE 净资产收益率 (%) 14P/B 市净率 (x) 14Yield 股息率 (%) DFG 00489 HK 11.66 Neutral 8.36.96.11.0 15.62.1 Geely 00175 HK 3.19 Accumulate 7.46.56.10.9 16.92.6 BYD 01211 HK 37.60 Accumulate 122.248.438.62.3 4.80.0 Sinotruk 03808 HK 4.05 Accumulate 19.513.39.10.4 3.01.5 Brilliance 01114 HK 12.28 Buy 14.412.010.63.4 30.61.6 Great Wall 02333 HK 36.85 Accumulate 10.68.57.52.4 31.93.5 Xiezhong International 03663 HK 0.95 Accumulate 9.47.77.00.7 9.30.0 Weighted Average. 市值加权平均 Outperform 35.117.414.42.0 19.82.0 Source︰the Companies, Bloomberg, Guotai Junan International. 19.8% 9.9% 79.6% 12.5% 15.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 20 09 20 10 20 11 20 12 20 13 F 20 14 F units xEVSales YoYGrowth 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 201120122013 units BEVPHEVHEV 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 INDEX Industry Analysis .......................................................................................................3 Global NEVSales Analysis ..........................................................................................................................3 China NEVSales Analysis ...........................................................................................................................6 10-city 1000-NEVProgram ..........................................................................................................................7 New Energy Bus Sales in China ..................................................................................................................9 New Energy PVSales in China ..................................................................................................................10 Sales Forecasts for NEVs ..........................................................................................................................12 Sector Investment View ..............................................................................................................................14 Company Analysis ...................................................................................................18 BYDVehicle Sales Analysis .......................................................................................................................18 BYDNEVSales Analysis ...........................................................................................................................20 Company Valuation ....................................................................................................................................22 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Industry Analysis Global NEVSales Analysis Major terms used in this report. New energy vehicles (‘NEVs’) are generally defined as a vehicles uses alternative fuel technologies and electrification technologies. In China, NEVs usually includes battery electric vehicles(‘BEVs’), plug-in hybrid eclectric vehicles(‘PHEVs’), hybrid engine vehicles(‘HEVs’), fuel cell electric vehicles(‘FCEVs’), hydrogen engine vehicles, natural gas vehicles and etc. In our report, we mainly discuss the issues in related to BEVs, PHEVs and HEVs, which also refers as NEVs. Generally, electric vehicles (‘EVs’) generally included BEVs and PHEVs. Global NEV sales increased 12.5% YoY in 2013. According to Scotiabank, global vehicle sales increased 4.9% YoY, reaching 68.13 million units in 2013. Estimated by IHS, sales of NEVs were about 1.9 million units in 2013, up 12.5% YoY, acconting for 2.8% of global vehilce sales. NEV sales are expected to exceed 2 million in 2014. During 2009-2013, NEVs grew at a CAGR of 26.7%. As a result, penetration rate of NEVs increased 1.4pps to 2.8% during 2009-2013. The NEV penetration rate is expected to grow further 2.2pps to 5% in 2020, according to IHS estimates. HEV dominated global NEV sales. Currently, the sales of HEVs still dominated the NEV market, accounting for about 90% of global NEV sales in 2013. HEV sales expanded rapidly in 2010 due to the introduction of Toyota’s Prius. Even though the EV was invented 100 years ago, the mass production of EVs started only in the last few years when the cost reduction and energy capacity of power batteries had major breakthrough. In addition, the rapid expansion of Tesla also drove the market to re-access the marketability of EV in 2012 and 2013. The cournties such as U.S, China, Japan, Germany etc., introduced the subsidies for the purchase of EVs and set up aggressive promotion plans for the next 10 years to promote green energy vehicles. Global EV sales increased from only about 3,000 units to 249,000 units during 2009-2013. U.S. and Japan are the largest NEV markets, accounting for 80% of global NEV sales in 2013. NEV sales of U.S. and Japan accounted for nearly 80% of global sales during the last 4 years which mainly due to rapid growth of HEV sales in these countries. Rank No.7 in the world, China NEV sales reached 32,742 units in 2013, up 41.2% YoY, accounting for only 1.7% of global NEV sales. In 2013, the penetration rate of NEVs in US and Japan reached 3.4% and 16.0%, respectively, while that of China and Europe were only 0.1% and 0.9%, respectively, which suggested that adoption of NEVs in China are much behind that of Japan and U.S. HEV sales dominated U.S. and Japan markets while EV sales in China had much larger market share. The HEV sales in U.S. Europe and Japan accounted for nearly 90% of their NEV sales in these countries. However, the sales EVs in China accounted for nearly 60% of NEV sales in China in 2013 since the government has much higher subsidies for EVs and the demand of HEVs in private sector remained weak as a result of low public awareness, short driving range, lacking of charging facilities and safety concerns. Figure-1: Global NEVSales and Growth,2009-2014F Figure-2: Global NEVPenetration Rate,2013 Source: IHS, Fourin, Guotai Junan International. Source: Fourin, Scotiabank, Guotai Junan International. 19.8% 9.9% 79.6% 12.5% 15.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 20 09 20 10 20 11 20 12 20 13 F 20 14 F units xEVSales YoYGrowth 2.8% 3.4% 16.0% 0.1% 0.9% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% Global USJapan China Europe xEVPenetration Rate 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Limited option of NEV models for consumers may restrict private sales of NEVs. There are about 50 models and 28 models of HEV and EV in the world in the year end of 2013, respectively. The launch of new models, which gennerally had better driving range, safer and others features, can generally stimulate the demand for NEVs. There are around 70 NEV models in China. However, only 20 of them can receive government subsidies. In addition, some of the models may not be able to regiester in some of the cities due to local protectionism. Therefore, the NEVs option for China consumers is very limited which restricted the private sales of NEVs in China. Global EV sales increased rapidly but penetration rate remained low. Global EV (BEV and PHEV) sales in 2013 grew rapidly, up nearly 70% YoY to 190.000 units. EV sales in US grew much faster than other countries, up 84% YoY, much faster than that of China. The EV sales in Japan increased slowly since Japanese buyers still prefer HEVs to EVs due to easy adoption and cheaper selling price. EV penetration rate in the world remained very low, about 0.28% in 2013. EV penetration rate in US were 0.62%, much higher than that of China of 0.08%. U.S., Japan and China are the largest EV markets in the world. EV sales in U.S. accounted for nearly 50% of global EV sales in 2013. Japan and China ranked No.2 and No.3 in terms of EV sales in the world, accounting for 12% and 11% of global sales, respectively. These countries accounted for larger market share since their vehicle markets are much larger and the government supports of EV development are strong. In China, car buyers prefer BEVs while car buyers in U.S. prefer PHEVs. Figure-3: Global NEVSales Distribution,2012 Figure-4: NEVSales Breakdown of Different Countries, 2013 Source: Fourin, CAAM, hybridcar.com, Guotai Junan International. Source: Fourin, CAAM, hybridcar.com, Guotai Junan International. Figure-5: Global HEV and EVModel Number Figure-6: Global NEVSales per Model Source: Baum and Associates, Guotai Junan International. Source: Baum and Associates, Fourin, Guotai Junan International. 30% 47% 4% 2% 2% 1%1% 12% U.S. Japan Korea France UK Germany China Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% U.S. Japan China Germany France units EVHEV 0 10 20 30 40 50 60 200820092010201120122013 model number HEVEV 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 20092010201120122013 per model sales HEVEV 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Figure-7: Global EVSales and Growth,2009-2014FFigure-8: Global EVSales in Different Countries,2013 Source: Fourin, IHS, Guotai Junan International. Source: Fourin, CAAM, hybridcar.com, Guotai Junan International. Figure-9: Global EVPenetration Rate in New Car Sales, 2013 Figure-10: Market Share of Different Countries,2013 Source: Fourin, Guotai Junan International. Source: Fourin, CAAM, hybridcar.com, Guotai Junan International. 500.0% 150.0% 151.1% 68.1% 82.3% 0.0% 100.0% 200.0% 300.0% 400.0% 500.0% 600.0% 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 20 09 20 10 20 11 20 12 20 13 F 20 14 F units Global EVSales YoYGrowth 0 40,000 80,000 120,000 160,000 200,000 G lo ba l U .S . Ja pa n Ch in a Fr an ce G er m an y U K N et he rl an ds Po rt ug al Ita ly D en m ar k In di a Sw ed en Sp ai n Fi nl an d units 0.279% 0.62% 0.31% 0.08% 0.18% 0.50% 0.000% 0.100% 0.200% 0.300% 0.400% 0.500% 0.600% 0.700% Global U.S. Japan China Germany France EVPenetration Rate 47% 12% 11% 3% 5% 22% U.S. Japan China Germany France Other 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 China NEVSales Analysis NEV sales increased 41.2% YoY in 2013. According to CAAM, NEV (or xEV) sales in China increased 41.2% YoY to 32,742 units in 2013, accounting for 0.1% of its vehicle sales. Among them, sales of BEVs, PHEVs and HEVs in 2013 were 14,604 units,3,038 units and 15,100 units, up 28.4% YoY,114.5% YoY and 45.2% YoY, respectively, accounting for 45%,9% and 46% of total NEV sales. The rapid growth of NEVs was mainly driven by the government subsidies, tax benefits and related policies supports, such as exemption from vehicle restriction in Beijing, shanghai and Guangzhou. NEV production grew rapidly in 1H13 but slowed down in2H13. According to CATARC, The production of NEVs grew rapidly in 2H12 and 1H13, up 92% YoY and 145% YoY, respectively, since the government subsidies for 10-city 1000-NEVProgram (十城千 辆) during 2009 to 2012 were due to expire in the year end of 2012. However, new energy vehicles production decreased 17% YoY in 2H13 since the new NEV policies were postponed and most of the NEV makers suspended their production. In 2013, NEV production increased 50.1% YoY to 36,073 units. New energy PV grew faster than that of CV in China, accounting for 62% of total market share in 2013. According to CATARC, production of new energy PV increased 66% YoY to 22,489 units, accounted for 62% of total NEV production in China in 2013. New energy PV grew much faster than new energy CV since new bus makers suspended their production in 3Q13 due to the delayed issue of government subisidies for NEVs. Figure-11: Annual NEVSales in China Figure-12: Monthly NEVProduction and Growth in China Source: CAAM, Guotai Junan International. Source: CATARC, Guotai Junan International. Figure-13: PV and CVMarket Share in China Figure-14: PV and CVMarket Share in China Source: CATARC, Guotai Junan International. Source: CATARC, Guotai Junan International. 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 201120122013 units BEVPHEVHEV 635% 114%125% 49% 336% 12% -13% -1% -27% -44% -52% 14% -100% 0% 100% 200% 300% 400% 500% 600% 700% 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec units 2011201220132013 Growth 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Ja n- 12 Fe b- 12 M ar -1 2 A pr -1 2 M ay -1 2 Ju n- 12 Ju l-1 2 A ug -1 2 S ep -1 2 O ct -1 2 N ov -1 2 D ec -1 2 Ja n- 13 Fe b- 13 M ar -1 3 A pr -1 3 M ay -1 3 Ju n- 13 Ju l-1 3 A ug -1 3 S ep -1 3 O ct -1 3 N ov -1 3 D ec -1 3 units PVCV 0% 20% 40% 60% 80% 100% 20 11 20 12 20 13 PVCV 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 EV sales in China increased 37.9% YoY 2013. According to CAAM, EV sales in China increased 37.9% YoY to 17,642 units in 2013, slower than that of 2012. During 2008-2013, EV sales in China grew 4 times up by a CAGR of 49%. The sales of BEV and PHEV in 2013 increased 28.4% YoY and 114.5% YoY, respectively, accounting for 83% and 17% of total EV sales, respectively. BEV continued to dominated the EV sales in China. 10-city 1000-NEVProgram The 10-city 1000-NEVProgram is one of the major drivers for NEVs adoption in China. China government introduced 10-city 1000-NEVProgram in January 2009 which aimed to promote the adoption of NEVs through government subsidies in pilot cities. According to the Ministry of Science and Technology (“MST”),25 pilot cities of the 10-city 1000-NEVProgram have adopted 27,432 uints of EV during 2009-2012, according for 82% of China EV sales during these years. Among these EVs,23,032 units of EVs were adopted in public services, including bus, taxi and other government fleets, accounting for 84% of EVs which were adopted in these pilot cities. Therefore, the 10-city 1000-NEVProgram are one of the major drivers for NEVs adoption in China. The completion ratio of 10-city 1000-NEVProgram was very low, especially for private segment. These 25 pilot cities cities only completed 17% of their orginal plans. The completion ratio in public services and private segment were 46% and 5%, respectively. Only 4 cities, including Guangzhou, Chongqing, Chengdu and Kunming, acheive their target while the other cities didn’t even complete half of their target. The low completion ratio was mainly because that these cities have over-estimated the growth in EVs sales, especially for the promotion of electric PVs. In addition, tighten fiscal income for local governments during 2011 and 2012 pushed these cities to adopt local protectionism, including setting higher requirement for non-local EV makers to enter their cities since they didn’t bring tax income and employment for these cities. Figure-15: New Energy PVProduction and Growth in China Figure-16: New Energy CVProduction and Growth in China Source: CATARC, Guotai Junan International. Source: CATARC, Guotai Junan International. Figure-17: EVSales and Growth in China Figure-18: EVSales and Growth in China Source: CAAM, Guotai Junan International. Source: CAAM, Guotai Junan International. 417% 39% 2% 3% 39% 24% -10% 27% -12% -32% 0% 75% -100% -50% 0% 50% 100% 150% 200% 250% 300% 350% 400% 450% 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec units 2011201220132013 Growth 787% 208% 392% 196% 566% -11% -15% -23% -11% -67% -74% -11% -100% 0% 100% 200% 300% 400% 500% 600% 700% 800% 900% 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec units 2011201220132013 Growth 113.9% 37.9% 13.6% 56.8% 37.9% 0% 20% 40% 60% 80% 100% 120% 0 4,000 8,000 12,000 16,000 20,000 20 08 20 09 20 10 20 11 20 12 20 13 unit EVSales YoY growth 0% 20% 40% 60% 80% 100% 201120122013 BEVPHEV 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Figure-23: EV sales of 10-city 1000-NEVProgram, as % of China EVSales Figure-24: EVSales from Different Sector,10-city 1000-NEVProgram Source: Ministry of Science and Technology, Guotai Junan International. Source: Ministry of Science and Technology, Guotai Junan International. Figure-25: Sales of Different EVs in 10-city 1000-NEV Program Figure-26: Sales Target, Actual Sales and Completion Ratio of Different Cities,10-city 1000-NEVProgram Source: Ministry of Science and Technology, Guotai Junan International. Source: Ministry of Science and Technology, Guotai Junan International. Figure-27: Sales Target, Actual Sales and Completion Ratio of Different Cities for Public Services,10-city 1000-NEVProgram Figure-28: Sales Target, Actual Sales and Completion Ratio of Different Cities for Private Sector,10-city 1000-NEVProgram Source: Ministry of Science and Technology, Guotai Junan International. Source: Ministry of Science and Technology, Guotai Junan International. 75% 80% 85% 90% 95% 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20092010201120122013 units Promotion Number As % of China NEVSales 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 201020112012 units Pulic Services Private Sector Special Vehicles Bus Taxi Private used PV Private used CV 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 H ef ei S he nz he n B ei jin g H an gz ho u S ha ng ha i C ha ng ch un G ua ng zh ou C ha ng -Z hu -T an C ho ng qi ng D al ia n W uh an Ku nm in g C he ng du N an ca ng Xi am en Zh en gz ho u Ti an jin H ai ko u Su zh ou S he ny an g H uh eh ao te N an to ng Ji na n Ta ng sh an Xi an gf an units Sales Target Accumulated Sales Completion Ratio 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 H ef ei S he nz he n Be iji ng H an gz ho u S ha ng ha i C ha ng ch un G ua ng zh ou C ha ng -Z hu -T an C ho ng qi ng D al ia n W uh an K un m in g C he ng du N an ca ng X ia m en Zh en gz ho u Ti an jin H ai ko u S uz ho u S he ny an g H uh eh ao te N an to ng Ji na n Ta ng sh an X ia ng fa n units Sales Target for Public Fleets Accumulated SalesCompletion Ratio 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Hefei Shenzhen Beijing Hangzhou ShanghaiChangchun units Sales Target for Private Sector Accumulated SalesCompletion Ratio 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 New Energy Bus Sales in China New energy bus sales in China slowed down in 2011 and 2012 but recovered in 2013. The government introduced subsidies for new energy buses in the 10-city 1000-NEVProgram. In addition, global events during 2008-2010, including Beijing Olympic Games 2008, Shanghai World Expo 2010, Shenzhen Universiade 2010 and Guangzhou Asian Games 2010 etc, also boosted the demand for new energy buses. As a result, new energy bus sales surged in 2010, up 105.0% YoY. However, new energy buses sales growth slowed down to 11.7% YoY in 2011 and 3.7% YoY in 2012, respectively, since local governments run out of funding as a result of property curbs and local protection policies stopped non-local new energy bus makers to enter these cities. Therefore, the market share of new energy bus continued to increase during 2007-2010 but decreased in 2011 and 2012. In the first 3 quarters of 2013, new energy buses sales recovered, up 60.6% YoY, accounting for 1.3% of total bus sales, or 8.2% of total urban bus sales when the 10-city 1000-NEVProgram were due to expire. Small new energy bus sales grew faster than that of large and medium buses in 1-3Q13. The sales of large, medium and small new energy buses increased 36.2% YoY,85.0%YoY and 249.0% YoY in 1-3Q13, respectively, accounting for 54%,37% and 9% of total new energy bus sales. Even though large new energy buses accounted for the most of the market share, it grew much slower than other types of buses. Small new energy bus sales grew faster than other type of buses due to lower base. Electric bus sales grew faster than that of hybrid buses due to higher government subsidies. In 1-3Q13, hybrid bus sales decreased 5.2% YoY, accounting for more than 71% of total new energy bus sales, while electric bus sales increased 38.6% YoY, accounting for 26% of total sales. Electric bus sales grew much faster than that of hybrid buses since the government subsidies for electric buses were much higher. Top 5 provinces or regions for new energy bus sales were Beijing, Shaihai, Guangdong, Shandong and Jiangsu. Top 5 provinces or regions for new energy bus sales in 2013 were Guangdong, Shandong, Jiangsu and Liaoning. However, Beijing, Shanghai, Sicuan and Jilin have catched up very quickly, which doubled their new energy bus sales in the 2013. Therefore, the Top 5 provinces or regions for new energy bus sales were Beijing, Shaihai, Guangdong, Shandong and Jiangsu in the 1-3Q13. Market concentration was relatively high in new energy bus segment. Top 5 new energy bus makers in the market are Yutong, BYD, Sunwin, Hengtong and Zhongtong, which sold nearly 4,160 units of new energy buses in 1-3Q13, accounting for 75.8% of total sales. The market concentration of new energy bus segment was relatively high. The sales of BYDK9 were about 700 units in 1-3Q13, accounting for 13% of China new energy bus sales, which was much lower than BYD’s sales target of 2,000 units for 2013. Figure-19: New Energy Bus Sales in China Figure-20: Different New Energy Bus Sales in China Source: CAAM, Guotai Junan International. Source: CAAM, Guotai Junan International. 34.5% 75.7% 105.0% 11.7% 3.7% -20.1% 60.6% -40% -20% 0% 20% 40% 60% 80% 100% 120% 0 1,000 2,000 3,000 4,000 5,000 6,000 2007200820092010201120121-3Q121-3Q13 NEVBus YoYGrowth 36.2% 85.0% 249.0% 0% 50% 100% 150% 200% 250% 300% 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Large Medium Small units 1-3Q131-3Q12 YoYGrowth 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 New Energy PVSales in China New energy PV sales were concentrated in the last two months of the year since most of the new energy PV sales heavily relied on government purchases. According to CAAM, total new energy PV sales (including imported PVs) increased 36.5% YoY to 28,842 units in 1-3Q13. The sales of imported new energy PVs accounted for 75% of total NEV sales since most of the imported new energy PVs were hybrid PVs. According to CAAM, domestic new energy PV sales increased 46.7% YoY to 7,204 units in 1-3Q13. Sales of domestic-made new energy PVs increased 41.8% YoY, accounting for 50% of total new energy PV sales in 1-3Q13. The sales of domestic-made new energy PVs fluctuated seasonally. Nearly 42% of new energy PV sales were concentrated in the last two months of the year since most of the PV sales still heavily relied on government purchase which normally is completed in the last two months of the year. The market concentration of new energy PV sales was relatively low. According to CAAM, Top 5 local new energy PV makers were JAC, FAW-Toyota, Brilliance, Geely and BYD, which sold 1,155 units of new energy PV in 1-3Q13, up 1pps YoY. The market share of Top 5 local new energy PV makers were only 64% in 1-3Q13. The market concentration of new energy PV sales was relatively low. Figure-21: New Energy Bus Sales as % of Total Bus Sales in China Figure-22: New Energy Bus Sales in Different Regions Source: CAAM, Guotai Junan International. Source: CAAM, Guotai Junan International. Figure-23: New Energy Bus Sales of Different Companies,1-3Q13 Figure-24: Market Share of Different New Energy Bus Makers,1-3Q13 Source: CAAM, Guotai Junan International. Source: CAAM, Guotai Junan International. 0% 2% 4% 6% 8% 10% 12% 2007200820092010201120121-3Q121-3Q13 As%ofTotalBusSales As%ofTotalUrbanBusSales 0 100 200 300 400 500 600 700 G ua ng do ng S ha nd on g Ji an gs u Zh ej ia ng Li ao ni ng A nh ui Be iji ng H ub ei H un an H en an Sh an gh ai Si cu an H eb ei Ji lin C ho ng qi ng units 20121-3Q13 0 200 400 600 800 1000 1200 1400 1600 1800 2000 Yu to ng B YD S un w in H en gt on g Zh on gt on g Yo un gm an C he ng du B us A si as ta r FA W Zh uh ai Yi nt on g units HEVEV Yutong BYD Sunwin Hengtong Zhongtong Youngman ChengduBus Asiastar FAW ZhuhaiYintong Others 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Figure-25: New energy PVSales in China, breakdown by different source,2012-2013 Figure-26: Sales of Domestic-made New energy PV in China, breakdown by different type of power-train, 2012-2013 Source: CAAM, Guotai Junan International. Source: CAAM, Guotai Junan International. Figure-27: Sales of Different Electric PVMakers,1-3Q12 and 1-3Q13 Figure-28: Market Share of Different Electric PVMakers, 1-3Q13 Source: CAAM, Guotai Junan International. Source: CAAM, Guotai Junan International. 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Ja n- 12 Fe b- 12 M ar -1 2 A pr -1 2 M ay -1 2 Ju n- 12 Ju l-1 2 A ug -1 2 S ep -1 2 O ct -1 2 N ov -1 2 D ec -1 2 Ja n- 13 Fe b- 13 M ar -1 3 A pr -1 3 M ay -1 3 Ju n- 13 Ju l-1 3 A ug -1 3 S ep -1 3 units Domestic Made Imported 0 500 1,000 1,500 2,000 2,500 Ja n- 12 Fe b- 12 M ar -1 2 A pr -1 2 M ay -1 2 Ju n- 12 Ju l-1 2 A ug -1 2 S ep -1 2 O ct -1 2 N ov -1 2 D ec -1 2 Ja n- 13 Fe b- 13 M ar -1 3 A pr -1 3 M ay -1 3 Ju n- 13 Ju l-1 3 A ug -1 3 S ep -1 3 units BEVPHEVHEV 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 JA C FA W - To yo ta B ril lia nc e G ee ly Zo ty e A ut o BY D S AI C D FP V S G M S AI C units 1-3Q121-Q13 JAC FAW-Toyota Brilliance Geely ZotyeAuto BYD SAIC DFPV SGM SAIC Others 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Sales Forecasts for NEVs The air pollution is getting worse in China. According to the 2013 Report for Mitigating Climate Change (China Green Paper) from Chinese Academy of Social Sciences and China Meteorological Bureau, the number of haze days in 2013 reached historical high of 29.9 days each year which was mainly caused by the consumption of fossil energy. The average concentration of particulate matter 2.5 (PM 2.5) in these regions exceeded the recommended standard of World Health Organization (“WHO”) by 2 to 4 times. The air pollution problems have greatly affected the public health. Pollutants of major public health concerns include particulate matter (PM), carbon monoxide (CO), ozone (O3), nitrogen dioxide (NO2) and sulphur dioxide (SO2). Exposure to these pollutants is associated with many effects on human health, including increased respiratory symptoms, hospitalisation for heart or lung diseases, and even premature death. Of all of these pollutants, fine particulate matter has the greatest effect on human health. According to WHO, fine particulate matter is associated with a broad spectrum of acute and chronic illness, such as lung cancer and cardiopulmonary disease. Worldwide, it is estimated to cause about 9% of lung cancer deaths,5% of cardiopulmonary deaths and about 1% of respiratory infection deaths. According to Fudan University, every 10μg/m3 of increase in PM2.5 will raise death ratio around 0.85%. Pollutants from automobiles contributed a major part of air pollution. According to the Ministry of Environmental Protection of China,22.2% of polllutants of PM2.5 in Beijing is generated by automobile, which is considered major parts of air pollutions. In other cities, such Shenzhen, the polllutants from automobile even contributed nearly 70% of PM2.5. Air pollution problems pressured the Chinese government to act fast to promote NEVs. The central and local governments realized how serious the air pollution is and releasing more related to policies to solve the problems, including energy saving and adopting green energy etc. Based on China’s 12 five year plan (12-FYP) target, the government plans to reduce SO2 emission by 8% over the period, to 20.86 mn ton by 2015E, and 10% reduction for NOx emission to 20.46 mn ton. In September of 2013, NDRC issued the Plan of Solving Air Pollution, planning to improve the air quality in 5 to 10 years. In addition, Beijing cut down its new vehicle registration quota but raised the quota for NEVs for 2014-2017. The new scheme of vehicle control in Beijing stated that to restrict the total number of car in Beijing, the quotas of vehicle registration through lottery are going to decrease from 240k units to 150k units each year, down 90k units, representing a 37.5% drop YoY. In addition, the quota for NEV is expected to be 20k,30k,60k and 60k units during 2014-2017. Higher oil import dependency increased the risk of energy security and social security. Along with China economic growth, crude fuel consumption continued to increase rapidly while local production remained relatively flat. In 2008, crude oil import dependency exceeded 50% which signal that China relied on imported crude oil very heavily. It is estimates such dependency to reach 80% in 2030 if fuel consumption continued to increase rapidly which will increase the risk of energy security and social security significantly. Figure-29: 2001-2006 Global Estimates of Ambient Fine Particulate Matter Concentration Source: 2010 Global Estimates of Ambient Fine Particulate Matter Concentration from Satelllte-Based Aerosol Opital Depth : Development and Applicatonl, NASA 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Government continued to issue supporting policies for NEVs. The government has issued related policies to support the development of new energy vehicles since 2001, including setting long term development target, adopting NEVs in public services, providing subsidies and tax waiving, setting up related industry standards. In September of 2013, the four government ministries (the Ministry of Industry and Information Technology, Ministry of Finance, Ministry of Science and Technology and NDRC) issued the Notice of Continuous Development of the Promotion for NEVs, aiming to promote energy saving and to control the air pollution through the development of new energy vehicles. Even though the supporting policies in 2013 have been delayed and the details are not so clear, we think that the urgency and willingness of the governments to adopt the NEVs is very certain. The new NEV polices indicated that the central government will arrange funding for the qualified pilot cities to build their recharge stations etc. To be qualified as pilot cities, super large cities are required to adopt the use of no less than 10,000 units of NEVs while that of other cities are required to adopt no less than 5,000 units of NEVs during 2013-2015. Among the total NEVs, no less than 30% should be manufactured in other cities. The purchase of NEVs for public services should account for no less than 30% total NEVs sales. First batch of name lists of NEV pilots and their targets was released in September of 2013. The four government ministries released the first batch of name lists for NEV pilot cities or regions for the second wave of 10-city 1000-NEVProgram, including the cities of Beijing, Tianjin, Taiyuan, Jincheng, Dalian, Shanghai, Ningbo, Hefei, Wuhu, Qingdao, Zhengzhou, Xinxiang, Wuhan, Xiangyan, Guangzhou, Shenzhen and the regions of Hebei Province, Zhejiang Province, Fujian Province, Jiangxi Province and Guangdong Province. Aggressive promotion target along with lower entry barriers are expected to boost EV sales in 2014 and 2015. The super large pilot cities are required to adopt the use of no less than 10,000 units of EVs and other smaller cities to adopt no less than 5,000 units of EVs during 2013-2015. Some of the pilot cities, including Beijing and Shenzhen, which are more active in promoting EVs, have set up a much higher promotion target. According to our estimates, the first batch of pilot cities and regions planned to promote 270,000 units of NEVs during 2013-2015, nearly 2.7x as much as that of the first wave. In addition, we expect the second batch of name list of pilot cities to be released very soon. We expect 50,000 additional EVs to be promoted in these cities’ plan. Therefore, the total promotion target is expected to be 320,000 units for second wave 10-city 1000-NEVProgram. The completion ratio in the first wave of 10-city 1000-NEVProgram was only 17% which was mainly due to low budget funding of local government as a result of property curbs in 2011 and 2012. In addition, the EV sales in China were restricted by local protectionism. The completion ratio of public services and private segment in the first wave were about 46% and 4%, respectively, which suggested that the promotion in private EV sales still faced a lot of problems. We expect the completion ratio of the second wave of the program to be higher since the barriers of local protectionism may be eased due to new Notice. Therefore,75,000 units of EVs are expected to be adopted in the 10-city 1000-NEV program during 2014-2015. We expected 76,000 units of EVs to be adopted during 2014-2015. Based on our estimates, we expect EVs sales to reach 28,000 units and 48,000 units during 2014 and 2015. Among these EVs sales,70%-80% of them are expected to be adopted in public services. The sales of new energy bus are expected to be 11,000 units and 18,000 units during 2014 and 2015, respectively. The adoption of EVs in China is easier for public services and car rental markets than for private sales of PV. Car ownership of an EV is very similar to a traditional PV after considering higher battery costs, fuel saving and government subsidies. However, Figure-30: Source of Air Pollution in Beijing Figure-31: Import Dependency of Crude Oil in China Source: Ministry of Environmental Protection of China, Guotai Junan International. Source: National Bureau of Statistics of China, Guotai Junan International. 24.5% 22.2% 16.7% 16.3% 15.8% 4.5% External of The City Automobile Coal Burning Industry Polution Dust Others -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 China U.S. 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 limited charging facilities, short driving range and limited option of vehicle model for consumers has limited the adoption of PV in private segment. In public segment, the government can set up charging facilities for these vehicles. In addition, the EVs that are used for public segment are generally used in urban area which doesn’t require a very long driving range. Therefore, we expected the sales of EVs in public segment to grow much faster than that of private segment. Table-1: Promotion Plan of the First Batch of Pilot Cities during 2013-2015 Public services Private Segment Minimum requirement to be qualified for subsidies Promotion Plan Bus Taxi Others Beijing 10,000 35,0205,0205,00010,000 10,000 30,000 Tianjin 10,000 12,00011,5002,800 500 Taiyuan 5,000 5,0003,900 1,100 Jincheng 5,000 5,0005,000 0 Dalian 5,000 5,0003,600 1,400 Shanghai 10,000 10,0003,2001,000 6,800 Ningbo 5,000 5,0002,900 2,100 Hefei 5,000 5,7201,220 4,500 Wuhu 5,000 5,1103,460 1,650 Qingdao 5,000 5,2005,2001,500 0 Zhengzhou 5,000 5,5004,9003,400 600 Xinxiang 5,000 5,0003,000 2,000 Wuhan 5,000 10,5004,300 6,200 Xiangyang 5,000 5,0001,190 3,810 Changsha- Zhuzhou- Xiangtan 5,000 6,1004,650 1,450 Guangzhou 10,000 10,0006,0002,000 4,000 Shenzhen 10,000 35,00019,0005,0003,000 15,000 16,000 Haikou 5,000 5,0003,000 2,000 Chengdu 5,000 5,0005,000 0 Chongqing 10,000 10,00010,0003,000 0 Kunming 5,000 13,1203,500 * 9,620 Xi'an 5,000 11,0005,700 5,300 Lanzhou 5,000 5,0003,750 1,250 City Group of Hebei 5,000 13,1418,911 4,230 City Group of Zhejiang 5,000 11,6007,500 * 4,100 City Group of Fujian 5,000 10,0006,950 3,050 City Group of Jiangxi 5,000 5,3005,100 200 City Group of Guangdong 5,000 10,0006,000 4,000 Total 170,000 269,311153,45123,70013,000 25,000 115,860 Source: , Guotai Junan International. Sector Investment View Maintain “Outperform” Rating for Automobile Sector. Valuation of auto stocks is affected by monthly sales growth and seasonal effects since valuation of auto stocks are generally higher during peak season when inventory level is low. We estimated the vehicles sales to increase 12% in 2014, slower than that of 2013. However, the prosperity is expected to remain high. Therefore, we maintain “Accumulate” rating for automobile sector. We favor new energy auto makers. We expect NEV sales of 2014 and 2015 to grow rapidly since the local government will actively adopt NEVs due to severe air pollution. Currently, the adoption of new energy PV for private users is relatively difficult due to lacking of charging facilities, relatively short driving range and limited purchase option for consumers etc. However, the adoption of NEVs for public services, as well as rental cars is much easier since the charging facilities are much easier to install for these fleets. In addition, these NEVs do not required to travel for very long distance. According to the pilot cities’ future plan, we expect NEVs for public services and rental car to grow rapidly in 2014 and 2015, which is expected to benefit leading NEV makers, such as BYDCorporation (01211HK). 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Table-2: Summary of NEVPolicies during 2009-2013 Date NEVPolicies NEVPolicies in Chinese Details Jan-091000 NEVs in 10 Cities “十城千辆”计划Within 3 years, there should have 1000 units of NEVs, including bus, taxi, government fleets, post office fleets, in each 10 pilot cities each year. The pilot cities increased from 13 to 25 cities. Mar-09 Automobile Industry Adjustment and Revitalization Plan 《汽车产业调整和振兴规划》 Sales of NEV accounted for 5% of sales in 2011 Jun-09 Qualification for NEVMakers and Products 《新能源汽车生产企业及产 品准入管理规则》 Detailed the qualification of company to enter the production of NEVs Jun-10 The Notice of Government Subsidies on NEVs to Stimulate Private Sales in Pilot Cities 《关于开展私人购买新能源 汽车补贴试点的通知》 Subsidies for NEVs, Up to RMB60K for EV and RMB50K for PHEV in Shanghai, Shenzhen, Changchun, Hangzhou and Hefei Jan-12 Waive of Vehicle and Vessel Tax for NEVs 对使用新能源的车船免征车 船税 VVT was waived for listed EV and petrol batteries PV Mar-12 Twelfth Fifth Year Plan for EV Development 《电动汽车发展的“十二五“规 划》 Continued the Three Vertical and Three Horizontal R&D strategic. Set up 400,000 units of charge poles and 2000 recharge stations in 20 pilot cites May-12 Twelfth Fifth Year Plan for the Development of National Strategic Emerging Industry 《“十二五”国家战略性新兴产 业发展规划》 Accelerate the development of batteries and electric motor May-12 The Development of NEVs Became the Focus of Energy Saving in 2H12 发展新能源汽车将成为2012 年下半年节能减排重点 Arrange RMB1-2 billion each year to support the development of NEV Jun-12 Development Plan of Energy Saving and NEVs (2012-2020) 《节能与新能源汽车产业发 展规划(2012—2020)》 Set target for development of NEVs, accumulated production of 500k units in 2015 and 5million units in 2020 Dec-1212 Five-Year Plan for Solving Air Pollution in Major Regions 《重点区域大气污染防治“十 二五”规划》 Plan to reduce SO2 emission by 8% over the period, to 20.86 mn ton by 2015E, and 10% reduction for NOx emission to 20.46 mn ton in 19 cities and regions. Sep-13 The Notice of Continuous Development of the Promotion for New Energy Vehicles 《关于继续开展新能源汽车 推广应用工作的通知》 1) Every city can apply for pilot cities and receive government subsidies to build recharge stations.2) Calculation of subsidies for EVs and HPEVs is based on driving range during EV mode.3) Central government funds the auto makers directly. Nov-132014-2017 Scheme of Control Automobile Emission in Beijing 《北京市2013-2017年机动 车排放污染控制工作方案》 The quotas of vehicle registration through lottery in Beijing are going to decrease from 240k units to 150k units, down 90k units. In addition, the quota for NEVs is expected to be 20k,30k.60k and 60k units during 2014-2017, which will continue to increase each year Nov-132013-2015 first batch of NEV pilot cities or regions 2013-2015年第一批新能源 汽车推广城市或地区名单 28 pilot cities or regions, including the cities of Beijing, Tianjin, Taiyuan, Jincheng, Dalian, Shanghai, Ningbo, Hefei, Wuhu, Qingdao, Zhengzhou, Xinxiang, Wuhan, Xiangyang, Guangzhou, Shenzhen and the regions of Hebei Province, Zhejiang Province, Fujian Province, Jiangxi Province and Guangdong Province. Source: Guotai Junan International. Figure-38: Forward PEBand for Automobile Sector Figure-39: Forward PBBand for Automobile Sector Source: Bloomberg, Guotai Junan International Source: Bloomberg, Guotai Junan International DFGGeely BYDSinotruk Brilliance GWMGAC 0 20 40 60 80 100 120 140 Ja n 06 Ju n 06 D ec 06 M a y 07 N ov 07 Ju n 09 O ct 08 M ar 09 S ep 09 Fe b 10 A ug 10 Ja n 11 Ju l 1 1 D ec 11 Ju n 12 N ov 12 M a y 13 N ov 13 (X) WAPER band PE (historical mean) PE (2013F) PE (High) PE (Low) PE (2014F) DFGGeely BYDSinotruk Brilliance GWMGAC 0 2 4 6 8 10 12 14 Ja n 06 Ju n 06 D ec 06 M a y 07 N ov 07 Ju n 09 O ct 08 M ar 09 S ep 09 Fe b 10 A ug 10 Ja n 11 Ju l 1 1 D ec 11 Ju n 12 N ov 12 M ay 13 N ov 13 (X) WAPB band PB (historical mean) PB (2013F) PB (high) PB (low) PB (2014F) 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Table-3: Peers of Automobile Sector Company Stock Code Currency Last price PE PB ROE (%) D/Y( %) EV/EBI TDA 12A 13F 14F 15F 12A 13F 14F 15F 14F 14F 14F Dongfeng Motor Grp Co Ltd-H 489 HKHKD 11.66 9.1 8.1 7.3 6.6 1.5 1.2 1.1 1.0 15.9 2.0 2.8 Geely Automobile Holdings Lt 175 HKHKD 3.19 10.9 8.1 6.9 6.0 1.9 1.4 1.2 1.0 17.7 1.9 3.6 Brilliance China Automotive 1114 HKHKD 12.28 16.8 13.9 11.3 9.3 3.9 3.6 2.8 2.2 27.8 1.4 n.a. Great Wall Motor Company-H 2333 HKHKD 36.85 10.5 10.6 8.7 7.2 2.8 3.1 2.4 1.9 31.5 3.4 6.9 Qingling Motors Co Ltd-H 1122 HKHKD 2.20 12.5 10.7 9.7 8.9 0.5 0.6 0.6 0.6 5.7 7.6 1.0 Byd Co Ltd-H 1211 HKHKD 37.60 540.5 91.1 50.6 39.7 2.1 3.0 2.8 2.6 6.1 0.1 15.8 Guangzhou Automobile Group-H 2238 HKHKD 7.87 30.7 13.4 9.3 7.6 1.1 1.2 1.1 1.0 12.0 3.1 573.0 Avichina Industry & Tech-H 2357 HKHKD 4.54 24.6 27.0 22.4 17.6 1.7 2.0 1.8 1.6 8.5 0.8 9.6 Weichai Power Co Ltd-H 2338 HKHKD 29.70 18.4 12.5 10.5 8.9 2.2 1.6 1.4 1.2 14.2 1.3 5.1 Sinotruk Hong Kong Ltd 3808 HKHKD 4.05 108.2 17.9 13.2 9.7 0.7 0.5 0.4 0.4 3.2 1.9 5.4 Simple Average 78.2 21.3 15.0 12.2 1.8 1.8 1.5 1.3 14.3 2.4 69.3 Weighted Average 115.5 26.8 17.4 14.0 2.2 2.3 1.9 1.7 17.8 1.9 64.0 Dongfeng Automobile Co Ltd-A 600006 CHCNY 2.89 274.3 n.a. n.a. n.a. 1.0 n.a. n.a. n.a. n.a. n.a. n.a. Faw Car Company Limited-A 000800 CHCNY 10.08 n.a.14.6 9.8 8.7 1.8 1.9 1.6 1.3 20.1 0.5 6.2 Saic Motor Corporation Ltd-A 600104 CHCNY 13.09 9.4 6.1 5.4 5.2 1.6 1.0 0.9 0.8 16.5 4.2 7.7 Changchun Faway Autombile-A 600742 CHCNY 17.20 9.6 9.2 7.2 5.9 1.3 n.a. n.a. n.a. 13.5 n.a. n.a. Chongqing Changan Automob-A 000625 CHCNY 11.06 11.3 15.0 9.5 7.0 1.1 2.8 2.2 1.7 24.5 1.6 13.3 Weichai Power Co Ltd-A 000338 CHCNY 17.84 18.4 9.4 7.9 6.9 2.2 1.3 1.1 1.0 15.1 2.1 4.7 Beiqi Foton Motor Co Ltd-A 600166 CHCNY 5.14 12.2 12.0 9.1 7.4 1.3 0.9 0.9 0.8 7.1 2.7 11.5 Anhui Jianghuai Auto Co-A 600418 CHCNY 7.81 18.0 10.2 7.6 6.4 1.5 1.5 1.3 1.1 16.7 3.1 2.1 Cnhtc Jinan Truck Co Ltd-A 000951 CHCNY 10.71 116.6 11.5 8.9 7.6 1.4 1.1 1.0 0.9 11.4 1.5 5.2 Zhengzhou Yutong Bus Co -A 600609 CHCNY 18.16 10.9 13.4 11.4 9.6 2.4 2.7 2.3 1.9 19.9 2.6 7.0 Shenyang Jinbei Automotive-A 600686 CHCNY 2.85 186.2 n.a. n.a. n.a. 11.5 n.a. n.a. n.a. n.a. n.a. n.a. Jiangling Motors Corp Ltd-A 000550 CHCNY 24.75 8.0 12.7 11.0 8.3 1.5 2.4 2.1 1.9 18.7 2.5 8.2 Yangzhou Yaxing Motor Co-A 600213 CHCNY 6.10 186.0 n.a. n.a. n.a. 6.6 n.a. n.a. n.a. n.a. n.a. n.a. Zhongtong Bus & Holding Co-A 000957 CHCNY 9.82 23.9 23.1 8.1 11.5 2.0 2.9 2.1 1.8 28.0 3.1 n.a. Simple Average 68.1 12.5 8.7 7.7 2.7 1.8 1.5 1.3 17.4 2.4 7.3 Weighted Average 19.0 9.5 7.4 6.4 1.7 1.5 1.3 1.1 17.2 2.9 7.7 Nissan Motor Co Ltd 7201 JPJPY 914.00 10.8 11.4 10.6 8.7 1.2 1.1 0.9 0.9 9.1 3.3 8.1 Toyota Motor Corp 7203 JPJPY 6,136.00 39.6 21.4 10.5 9.7 1.1 1.7 1.4 1.3 14.4 2.7 8.0 Honda Motor Co Ltd 7267 JPJPY 4,004.00 26.8 18.3 11.7 10.0 1.3 1.5 1.3 1.2 11.5 2.2 8.1 Daihatsu Motor Co Ltd 7262 JPJPY 1,734.00 9.9 9.4 9.0 9.0 1.5 1.5 1.3 1.2 15.5 3.3 3.2 Mazda Motor Corp 7261 JPJPY 528.00 n.a.50.8 13.2 10.0 0.9 3.2 2.6 2.1 20.0 0.0 8.0 Mitsubishi Heavy Industries 7011 JTJPY 692.00 54.9 30.1 20.8 18.2 1.1 1.8 1.6 1.5 7.8 1.2 9.3 Fuji Heavy Industries Ltd 7270 JPJPY 2,949.00 13.5 23.7 10.5 10.7 1.2 4.3 2.9 2.4 32.0 1.5 6.0 Suzuki Motor Corp 7269 JPJPY 2,765.00 20.6 20.4 14.2 13.3 1.1 1.5 1.2 1.1 9.0 0.8 4.9 Hino Motors Ltd 7205 JPJPY 1,531.00 20.9 20.3 11.6 11.2 1.6 3.6 2.8 2.4 25.4 2.4 6.6 Isuzu Motors Ltd 7202 JPJPY 633.00 9.0 11.5 9.3 8.9 2.0 2.1 1.8 1.5 19.2 1.9 5.0 Hyundai Motor Co 005380 KSKRW 234,500.00 11.3 n.a. n.a. n.a. 1.2 n.a. n.a. n.a. n.a. 0.9 n.a. Ford Motor Co FUSUSD 15.72 8.2 10.0 11.4 7.9 3.2 2.9 2.5 2.0 24.1 2.9 4.9 Navistar International Corp NAVUSUSD 32.49 n.a. n.a. n.a.13.6 22.5 n.a. n.a. n.a. 2.8 0.0 13.3 Paccar Inc PCARUSUSD 56.80 14.5 17.3 15.6 13.9 2.7 3.2 2.9 2.7 19.0 2.7 11.6 Fiat Spa FIMEUR 7.60 13.3 44.7 8.0 6.5 0.5 1.0 0.9 0.7 11.9 1.1 2.6 Volkswagen Ag VOWGREUR 188.30 3.5 9.3 8.1 7.3 1.0 1.1 1.0 0.9 12.4 3.0 3.1 BMWBMWGREUR 82.69 9.4 10.4 10.2 9.7 1.6 1.6 1.5 1.3 14.7 3.5 3.3 Daimler Ag DAIGREUR 63.48 7.2 12.1 11.2 9.5 1.0 1.5 1.4 1.3 13.2 3.6 5.0 Man Se MANGREUR 90.22 67.3 n.a.23.5 18.9 2.1 2.5 2.4 2.3 11.1 3.4 10.8 Renault Sa RNOFPEUR 66.84 6.2 13.6 7.9 6.2 0.5 0.8 0.7 0.7 8.6 2.8 4.1 Volvo Ab-BShs VOLVBSSSEK 87.80 16.3 31.5 16.9 10.7 2.1 2.3 2.2 1.9 12.6 3.3 8.2 Scania Ab-BShs SCVBSSSEK 123.50 16.2 15.6 13.8 12.2 3.1 2.7 2.5 2.3 18.3 4.0 7.3 Tata Steel Ltd TATAININR 360.00 8.4 37.1 9.9 8.2 1.1 0.9 1.0 0.9 9.9 2.5 6.5 Simple Average 18.5 20.9 12.3 10.6 2.4 2.0 1.7 1.5 14.7 2.3 6.7 Weighted Average 19.1 16.0 10.6 9.2 1.4 1.7 1.5 1.3 13.7 2.7 5.9 Global Simple Average 54.9 18.2 12.0 10.2 2.3 1.9 1.6 1.4 15.4 2.3 27.8 Global Weighted Average 25.9 16.4 10.9 9.4 1.5 1.7 1.5 1.3 14.2 2.6 10.1 Source: Bloomberg, Guotai Junan International. 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Company Report: BYDCorporation (01211 HK) Harry Chen陈欢瑜 公司报告:比亚迪股份(01211 HK) +8675523976683 chenhuanyu@gtjas.com 29 January 2014 Benefit from the Surge of NEVSales, Upgrade to “Accumulate” 受益于新能源汽车销售大幅增长,上调到“收集” BYD achieved its 2013 vehicle sales target. Vehicle sales of BYD increased 11% YoY to 507,000 units, completing its 2013 sales target. Among these vehicle sales, sales of 3-series increased 14% YoY, faster than that of 0-series and 6-series, due to the launch of Su Rui. The sales of Si Rui and S6 were worse than expected due to severe competition from JV in B-class sedan and SUV segment. We expect vehicle sales of BYD to increase 10% YoY in 2014, very close to its sales target for 2014. NEV sales of BYD are expected to increase rapidly during 2014 and 2015. BYD sold 3,600 units of NEVs in 2013, down 3% YoY, much worse than its sales target of 8,000 in 2013. Severe air pollution is expected to push the government to adopt NEVs much quicker. In addition, BYD actively established a JV with local government to produce NEVs. Therefore, NEV sales of BYD are expected to increase to 8,100 units and 12,000 units during 2014 and 2015, respectively. Upgrade to “Accumulate”. The current valuation of BYD is much higher than that of its peers in terms of PE valuation but it is considered reasonably priced in terms of PB valuation. We think BYD should deserve higher valuation due to its leading position in electric bus and taxi market. Therefore, we upgrade its rating to “Accumulate” and revise up its TP to HKD46.00, representing 60x 14PE,47x 15PE,2.7x 14PB and 2.4x 15PB. 比亚迪完成其2013年的汽车销售目标。

比亚迪的汽车销售同比增长11%到50.7万辆,完 成了公司2013年的销售目标。

其中比亚迪的3系列的销售同比增长14%,快于0系和6 系,主要是因为速锐的推出,而思锐和S6的销售则不理想,主要是因为自主品牌的B级 轿车和SUV的销售受到合资品牌的严重挤压。

我们预计公司2014年的汽车销售应该会同 比增长10%左右,贴近公司2014年的销售目标。

比亚迪受惠于政府采购和网络拓展,新能源汽车销售在2014年和2015年快速增长。

比亚 迪在2013年销售3,600辆新能源汽车,同比下滑3%,远低于其8,000辆的销售目标。

由 于大气污染严重,地方政府将更加积极推广新能源汽车,同时公司与各地政府成立合资工 厂生产新能源汽车,我们相信公司的新能源汽车销售将在2014年和2015年快速增长到 8,100和12,000辆。

上调评级到“收集”。

以PE估值,公司现在的估值远高于同业,但是以PB估值,公司 的估值则处于比较合理水平。

我们认为公司作为行业的龙头,在电动公交和出租车领域具 有很强的竞争力,应该值更高估值,因此上调公司评级到“收集”,上调目标价到46.00 港元,相当于60倍14年PE、47倍15年PE、2.8倍14年PB和2.6倍15年PB。

Rating: Accumulate Upgraded 评级:收集(上调) 6-18m TP目标价: HK$46.00 Revised from原目标价: HK$23.00 Share price股价:HK$37.600 Stock performance 股价表现 Change in Share Price 股价变动 1 M 1个月 3 M 3个月 1 Y 1年 Abs.% 绝对变动% 2.5 (0.8) 44.3 Rel.% to HS index 相对恒指变动% 7.2 2.350.7 Avg. share price(HK$) 平均股价(港元) 37.1 37.832.3 Source: Bloomberg, Guotai Junan International Year End 年结 Turnover 收入 Net Profit 股东净利 EPS 每股净利 EPS 每股净利变动 PER 市盈率 BPS 每股净资产 PBR 市净率 DPS 每股股息 Yield 股息率 ROE 净资产收益率 12/31 (RMB m) (RMB m) (RMB) (△%) (x) (RMB) (x) (RMB) (%) (%) 2010A 46,3121,3850.598 (46.1) 50.510.1873.00.000 0.06.1 2011A 44,381810.035 (94.2) 883.110.2563.00.000 0.00.3 2012F 48,0825660.240 595.1122.212.3072.40.000 0.02.1 2013F 53,8991,4090.599 149.148.412.7782.30.000 0.04.8 2014F 60,1651,7660.750 25.338.613.6242.10.150 0.55.7 Shares in issue (m)总股数(m) 2,354.1 Major shareholder大股东Mr. Wang Chuanfu 25.08% Market cap. (HK$ m)市值(HK$ m) 88,514.2 Free float (%)自由流通比率(%) 27.8 3 month average vol.3个月平均成交股数(‘000) 2,551.3 FY13 Net gearing FY13年净负债/股东资金(%) 53.3 52 Weeks high/low (HK$) 52周高/低42.000/21.000 14 NAV 14年资产净值29.9 Source︰the Company, Bloomberg, Guotai Junan International 20.00 25.00 30.00 35.00 40.00 45.00 19,000 20,000 21,000 22,000 23,000 24,000 25,000 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 H K $ HSIBYD 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Company Analysis BYDVehicle Sales Analysis Vehicle sales of BYD in 2013 increased rapidly, in-line. According to CAAM, vehicle sales of BYD in 2013 were 507,000 units, up 11% YoY, in-line with our forecasts. BYD has achieved its sales target of 500,000 units in 2013. BYD coninued to missed its sales target during 2010-2012 since it had experienced some problems with its sales networks and produciton expansion. Vehicle sales of BYD gradually recovered from 4Q12 after the launch of Su Rui. In addition, BYD launched its B-class sedan Si Rui in April of 2013 which also contributed nearly 11,000 units of sales for 2013, representing 2% of total sales. 0-series vehicles sales increased stably in 2013. After the adjustment of BYD’s production plants, the production of F0 gradually recovered in 2013. In addition, BYD also launched addiitional model, F0 with auto transmission, in September of 2013. As a result, F0, or 0-series vehicle, sales increased 12% YoY in 2013, accounting for 9.9% of total sales of BYD. 3-series vehicles sales increased 14% YoY, faster than that of other types of vehicles in 2013. As a new A-class sedan for BYD,Su Rui was launched in September of 2012 which is 15cm longer and 6 cm wider than that of F3. The sales of Su Rui increased rapidly in 2013, up 80,000 units YoY, contributing for 16% of BYD’s sales growth. The sales of L3 also grew rapidly, Figure-40: Monthly PVSales of BYD,2008-2013 Figure-41: Sales, Sales Target and Completion Rate of BYD Source: CAAM, Guotai Junan International. Source: CAAM, Guotai Junan International. Figure-42:Sales Growth of Different Type of Vehicle for BYD (0-series,3-series and 6-series) Figure-43: Product Mix of BYD (Classified into 0-series, 3-series and 6-series) Source: CAAM, Guotai Junan International. Source: CAAM, Guotai Junan International. -60% -40% -20% 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200% 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Ja n- 10 Ju n- 10 N ov -1 0 A pr -1 1 Se p- 11 Fe b- 12 Ju l-1 2 D ec -1 2 M ay -1 3 O ct -1 3 un its Sales volume Sales growth 0% 20% 40% 60% 80% 100% 120% 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 2007200820092010201120122013F unit Sales Target Actual Sales Completion Ratio -60% -40% -20% 0% 20% 40% 60% 80% 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 2010201120122013 un it 0-series 3-series 6-series 0-series Growth 3-series Growth 6-series Growth 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 20072008200920102011201220131H122H121H132H13 6 series 3 series 0 series 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 up 28% YoY. However, the sales of G3 and F3 decreased 78% YoY and 33% YoY, respectively, since these models have been launched for long time and are in the end of their product cycle. As a result, the sales of 3-series vehicles of BYD increased 14% YoY, accounting for 59% of BYD’s vehicle sales. 6-series vehicle sales increased slowly in 2013. As new B-class sedan of BYD, the sales of Si Rui reached 11,000 units in 2013 after the launch in April of 2013, accounting for 2% of total sales. The sales of M6 also recovered a bit after its facelift. The sales growth of of SUVS6 slowed down, up only 7% YoY, slower than industry average, which was mainly due to intense compeition in SUV segment. The sales of G6 dropped rapidlly in 2013, down 38% YoY, when it faced severe competition of JV branded sedan. In B-class sedan segment, self-owned branded sales only accounted for 5.8% of the market share. The Top 10 sales of B-class sedan are all JV branded since the potential B-class sedan buyers concerned more in brand image, safety and product quality. As a result,6-series vehicles sales increased only 5% YoY in 2013. Vehicle sales of BYD is expected to increase 10% YoY in 2014. According to BYD’s management, the sales target of 2014 is 555,000 units, up 11% YoY from 2013, in-line with industry average. We think that BYD should be able to achieve its sales target due to launch of new models. In 2014, BYD plans to launched 8 models of new cars, which is listed in Table-4. The new generation of F3 will be able to stop the sales drop of F3. In addition, the sales of S7, M3 and G5 should be able to help BYD to boost its sales by 10%. Figure-44:Monthly Sales of BYD 3-Series Figure-45: Annual Sales of BYD 3-Series Source: CAAM, Guotai Junan International. Source: CAAM, Guotai Junan International. Figure-46: Monthly Sales of BYD 6-Series Figure-47: Annual Sales of BYD 6-Series Source: CAAM, Guotai Junan International. Source: CAAM, Guotai Junan International. 0 10,000 20,000 30,000 40,000 50,000 Ja n 08 Ju n 08 N ov 08 A pr 09 Se p 09 Fe b 10 Ju l 1 0 D ec 10 M ay 11 O ct 11 M ar 12 Au g 12 Ja n 13 Ju n 13 N ov 13 un its Su Rui L3 G3 F3 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 2007200820092010201120122013 units Su Rui L3 G3 F3 0 5,000 10,000 15,000 20,000 25,000 Ja n 08 Ju n 08 N ov 08 Ap r 0 9 S ep 09 Fe b 10 Ju l 1 0 D ec 10 M ay 11 O ct 11 M ar 12 A ug 12 Ja n 13 Ju n 13 N ov 13 un its Si Rui S6 G6 M6 F6 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 2007200820092010201120122013 units Si Rui S6 G6 M6 F6 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Table-4 : Summary of New Model Plan Year Type of Renew Model Name Vehicle Type Date of Launch Retail Price(RMB) Delivery or not 2013 New model and new generation Qing(秦) A-class Hybrid Sedan Dec-13189,800-209,800 Postponed Si Rui B-class Sedan Mar-13103,900-150,900 Yes Denza Golf EVEVMid of 2013 n.a. No S3 Compact SUV n.a. n.a. No Additional model S62.0TMid of 2013 n.a. No F0 AMT 4Q1342,900-46,900 Yes L31.2T 4Q13 n.a. No Facelift M6 MPV 1Q13103,900-153,900 Yes 2014 New model and new generation S7 Mid-size SUVMay-14115,800-179,800 M3 Small MPV 4Q14 n.a. F3 A-class Sedan Apr-14 n.a. G5 A+-class Sedan Sep-14 n.a. Tang(唐) Hybrid SUVEnd of 2014 n.a. Additional model Si Rui 2.0T n.a. n.a. Facelift F0 A00-class Sedan n.a. n.a. Source: the Company, Guotai Junan International. BYDNEVSales Analysis NEV sales decreased 3% YoY, lower than expected. According to CAAM, NEV sales of BYD dropped 3% YoY to 3,600 units, completing only 45% of its sales target of 8,000 units in 2013, accouting for only 0.7% of total sales of BYD. The NEV sales of BYD relied on government’s support heavly. The new government policies for NEVs have been postponed from April to September in 2013. Therefore, the sales of the NEV makers have been affected significantly. BYD sold 1,005,142,1,550 and 900 units of F3DM, Qing, e6 and K9 in 2013. The sales of BYD’s K9 are estimated to accounted for 46% of total electric bus sales in China while new energy PV sales of BYD may only account for 8% of total new energy PV sales in 2013. The sales of BYD’s new energy PV has relatively low market share mainly due to local protectionism. Market expansion of NEV sales network relied on setting up JV with local government in China. BYD actively established the JV with local government to produce new energy bus and taxi. Up till December of 2013, BYD has already signed the agreement with 9 large cities to set up the production plants, including Shenzhen, Xi’an, Changsha, Tianjin, Kunming, Wuhan, Nanjing, Zengcheng and Chengdu. In these cities, the investment will be around RMB50 billion to set up the produciton capacity no less than 300,000 units. Such expansion methods can not only help BYD to receive more order from different cities and prevent local protectionism, but also can utilize local funding for production expansion. BYD promoted its EVs around the world to capture potential business. BYD not only set up NEV production plants in Figure-48: NEVSales of BYDFigure-49: Sales Breakdown of BYDNEVs Source: CAAM, Guotai Junan International. Source: CAAM, the Company, Guotai Junan International. 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 20092010201120122013 units Qin K9 e6 F3DM 28% 4% 43% 25% F3DM Qin(秦) E6 K9 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 overseas, including Los Angel and Bulgaria, but also signed up agreements with more than 25 cities or countries around the world to use K9 and e6 in their public transport system. Currently, BYD’s NEV network covered nearly 30 cities or countries in the world. Even though most of these NEV shipments are mainly used for trial in these cities, BYD still able to benefit from rising brand awareness and capturing potential business opportunities. Major growth driversw are new energy buses and taxis. As discussed previously, we expected the NEV sales in China to be driven by public services and rental car market. Private sales of NEVs may still face a lot of difficulties even though the exemption of vehicle restriction and government subsidies may help a bit. As a result, we expected NEV sales of BYD in 2014 and 2015 to increased rapidly to 8,100 units and 12,000 units, respectively. Revenue of NEV sales is expected to reach 20% of automobile sales in 2016. Even though the sales volume of NEVs of BYD only accounted for 0.7% of total sales, sales revenue of NEV sales accounted for nearly 5% of sales revenue of BYD’s automobile business which was mainly due to the much higher ASP of K9. Based on our estimates, the sales revenue of NEV sales as percentage of total sales revenue of BYD’s automobile business is expected to reach 20% in 2016. Figure-50: BYDNEVSales Coverage in China Figure-51: BYDNEVSales Coverage Overseas Source: the Company, Guotai Junan International. Source: the Company, the Company, Guotai Junan International. Figure-52: Sales Revenue of BYDNEVs and Traditional Vehicles Figure-53: Sales and Revenue of BYDNEVSales as % of Total Sales Source: CAAM, Guotai Junan International. Source: CAAM, the Company, Guotai Junan International. 海南 黑龙江 吉林 辽宁 河北 山东 福建 江西 安徽 湖北 湖南 广东广西 河南 山西 内蒙古 陕西 宁夏 甘肃 青海 四川 贵州 云南 西藏 新疆 江苏 浙江 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 2007200820092010201120122013F 2014F 2015F 2016F R M B m n Revenue of NEVSales Revenue of ICEVehicle Sales 0% 5% 10% 15% 20% 25% 2010201120122013F 2014F 2015F 2016F Sales volume of NEVRevenue of NEV 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Company Valuation Upgrade to “Accumulate” and revise up TP for market revaluation. BYD is currently trading at 49x 14PE,39x 15PE,2.3x 14PB and 2.2x 15PB. Based on the weighted average valuation, the comparable HK peers of BYD are valued at 14x 14PE, 11x 15PE,2.0x 14PB and 1.7x 15PB. BYD’s valuation is much higher than its peers in terms of PE valuation but is considered reasonably priced in terms of PB valuation. On average, BYD was traded at 27.7x forward PE and 3.3x forward PB in the past 7 years. Therefore, BYD’s forward PE is higher than its historical average while its forward PB is lower. Traditional vehicle sales of BYD are expected to remain stable in 2014 due to launch of new models which are expected to improve gross profit margin of BYD. Lost in solar business is expected to decrease. We think the breakthrough of NEVs of BYD in 2014 and 2015 is expected to boost sales revenue and profit for BYD. We think that the market will revalue BYD for its leading position in electric bus and taxi market. Therefore, we upgrade BYD’s rating to “Accumulate” and revise up TP to HKD46.00, representing 60x 14PE,48x15PE,2.8x 14PB and 2.6x 15PB. Table-5: Summary of the Valuation of Different Business Segment and BYD’s w.a. Valuation Gross Profit Contributed by Business Segment (%) 20132014201513PE 14PE 15PE 13PB 14PB 15PB Auto Business 66.9 69.672.616.411.09.4 1.7 1.51.3 HC&S 24.9 21.018.518.313.812.4 2.4 2.01.5 Rechargeable Battery Business 8.1 9.48.951.937.019.4 6.3 5.95.4 W.A. valuation of Industries 19.814.010.9 2.3 2.01.7 BYD valuation based on our estimates 122.249.139.1 2.4 2.32.2 Source: Bloomberg, Guotai Junan International. Figure-54: BYDForeword PEBand Figure-55: BYDForward PBBand Source: Bloomberg, Guotai Junan International. Source: Bloomberg, Guotai Junan International. BYD 0 20 40 60 80 100 120 140 Ja n 05 Ju l 0 5 D ec 05 Ju n 06 N ov 06 M ay 07 O ct 07 M ay 09 Se p 08 M ar 09 Au g 09 Fe b 10 Ju l 1 0 Ja n 11 Ju n 11 D ec 11 M ay 12 N ov 12 Ap r 1 3 O ct 13 (X) PB band PB (historical mean) PB (2013F) PB (2014F) PB (historical high) PB (historical low) BYD 0 2 4 6 8 10 12 14 Ja n 05 Ju l 0 5 D ec 05 Ju n 06 N ov 06 M a y 07 O ct 07 M a y 09 S e p 08 M ar 09 A ug 09 F eb 10 Ju l 1 0 Ja n 11 Ju n 11 D ec 11 M a y 12 N ov 12 A pr 13 O ct 13 (X) PB band PB (historical mean) PB (2013F) PB (2014F) PB (historical high) PB (historical low) 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Table-6: Global Handset Components Manufacturers and Rechargeable Batteries Makers Rechargeable Batteries Makers Stock Code Currency Last price PE PB ROE(%) D/Y(%) EV/EBITD A 12A 13F 14F 15F 12A 13F 14F 15F 14F 14F 14F Scud Group Ltd 1399 HKHKD 0.52 n.a. n.a. n.a. n.a. 0.3 n.a. n.a. n.a. n.a. n.a. n.a. Sinopoly Battery Ltd 729 HKHKD 0.33 n.a. n.a. n.a. n.a. 7.0 n.a. n.a. n.a. n.a. n.a. n.a. Tianneng Power Intl Ltd 819 HKHKD 3.36 6.2 8.9 4.6 3.5 1.4 0.9 0.8 0.7 16.3 6.0 5.2 Chaowei Power Holdings Ltd 951 HKHKD 4.00 6.6 6.2 4.5 3.7 1.5 1.0 0.8 0.7 24.3 7.2 2.9 Coslight Technology Intl Gp 1043 HKHKD 4.60 n.a.12.8 6.6 4.7 0.5 0.8 0.7 0.6 n.a. 2.2 n.a. Zhejiang Narada Power Sour-A 300068 CHCNY 9.09 30.4 31.9 23.9 18.4 1.4 1.9 1.8 1.6 7.1 1.1 n.a. Shenzhen Desay Battery Tec-A 000049 CHCNY 64.80 29.1 43.8 30.0 21.7 11.3 15.4 10.8 7.8 34.7 n.a. n.a. Citic Guoan Information-A 000839 CHCNY 6.29 55.5 n.a.17.5 n.a. 1.6 n.a. n.a. n.a. n.a. n.a. n.a. Xiamen Kehua Hengsheng Co-A 002335 CHCNY 15.72 21.4 26.2 21.0 17.3 2.1 n.a. n.a. n.a. n.a. n.a. n.a. Eve Energy Co Ltd-A 300014 CHCNY 41.05 21.5 50.7 37.2 23.0 2.9 9.2 7.2 5.5 22.3 0.5 n.a. Sony Corp 6758 JPJPY 1,690.00 n.a.36.0 93.9 23.0 0.8 0.9 0.8 0.8 0.8 1.5 4.2 Toshiba Corp 6502 JPJPY 478.00 20.6 18.0 15.9 11.7 1.8 2.0 1.7 1.6 11.5 1.8 7.1 Gs Yuasa Corp 6674 JPJPY 575.00 16.0 27.5 21.2 14.5 1.6 2.0 1.8 1.7 8.1 1.4 11.2 Panasonic Corp 6752 JPJPY 1,235.00 n.a. n.a.25.5 22.7 0.9 2.2 2.0 1.9 8.7 0.7 6.1 Tabuchi Electric Co Ltd 6624 JPJPY 514.00 197.7 34.7 6.5 6.0 5.1 10.2 3.8 2.4 60.3 0.8 n.a. Lg Chem Ltd 051910 KSKRW 260,000.00 16.9 n.a. n.a. n.a. 2.1 n.a. n.a. n.a. n.a. 1.6 n.a. Global & Yuasa Battery Co 004490 KSKRW 54,100.00 6.7 10.7 8.9 8.0 1.1 1.2 1.0 0.9 12.3 0.6 4.2 Samsung Sdi Co Ltd 006400 KSKRW 143,500.00 2.6 n.a. n.a. n.a. 0.8 n.a. n.a. n.a. n.a. 1.1 n.a. Rocket Electric Co Ltd 000420 KSKRW 509.00 n.a. n.a. n.a. n.a. 1.7 n.a. n.a. n.a. n.a. n.a. n.a. Seoul Electronics & Telecom 027040 KSKRW 847.00 n.a. n.a. n.a. n.a. 0.6 n.a. n.a. n.a. n.a. n.a. n.a. Ehwa Technologies Informatio 024810 KSKRW 612.00 n.a. n.a. n.a. n.a. 1.5 n.a. n.a. n.a. n.a. n.a. n.a. Elentec Co Ltd 054210 KSKRW 7,350.00 22.8 n.a. n.a. n.a. 1.2 n.a. n.a. n.a. n.a. n.a. n.a. Saft Groupe Sa SAFTFPEUR 26.67 10.7 20.4 16.3 13.3 1.1 1.6 1.6 1.5 9.9 2.9 7.4 E-One Moli Energy Corp 3127 TTTWD 9.00 n.a. n.a. n.a. n.a. 0.9 n.a. n.a. n.a. n.a. n.a. n.a. China Bak Battery Inc CBAKUSUSD 1.66 n.a. n.a. n.a. n.a. 0.5 n.a. n.a. n.a. n.a. n.a. n.a. China Tmk Battery Systems In DFELUSUSD 0.08 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Johnson Controls Inc JCIUSUSD 47.33 10.8 17.8 14.5 12.4 1.6 2.5 2.4 2.1 16.5 1.8 9.1 Advanced Battery Technologie ABATUSUSD 0.40 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Enersys ENSUSUSD 68.39 11.4 19.3 18.0 15.6 1.6 n.a.2.6 n.a. 13.2 0.4 n.a. Axion Power International AXPWUSUSD 0.09 n.a. n.a. n.a. n.a. 2.8 n.a. n.a. n.a. n.a. n.a. n.a. Universal Power Group Inc UPGUSUSD n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Tesla Motors Inc TSLAUSUSD 178.38 n.a.287.2107.1 53.7 31.0 34.4 32.5 29.8 49.7 n.a. 65.1 Alpha & Omega Semiconductor AOSLUSUSD 7.35 18.2 57.4 367.5 14.0 0.8 0.7 0.7 0.7 (1.4) n.a. 3.7 New Energy Systems Group NEWNUSUSD 0.05 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Simple Average 28.1 41.7 44.3 16.0 3.0 5.4 4.3 3.8 18.4 2.0 11.5 Weighted Average 8.7 51.9 37.0 19.4 5.6 6.3 5.9 5.4 14.6 1.2 13.6 Handset Components Manufacturers Stock Code Currenc y Last price PE PB ROE(%) D/Y(%) EV/EBITD A 12A 13F 14F 15F 12A 13F 14F 15F 13F 13F 13F Byd Electronic Intl Co Ltd 285 HKHKD 3.65 11.7 11.79.2 8.9 0.8 0.70.7 0.7 6.0 1.2 2.9 Foxconn International Hldgs 2038 HKHKD 3.87 n.a.41.519.9 19.9 1.1 1.01.0 0.9 2.2 0.0 6.1 Aac Technologies Holdings In 2018 HKHKD 32.95 18.4 12.912.3 10.7 5.3 4.03.3 2.8 34.4 2.8 10.7 Ichia Technologies Inc 2402 TTTWD 17.90 47.7 17.814.6 n.a. 0.8 n.a. n.a. n.a. n.a. 5.9 n.a. Silitech Technology Corp 3311 TTTWD 37.35 10.7 16.022.1 30.6 1.5 1.21.2 n.a. n.a. 5.1 n.a. Taiwan Chi Cheng Enterprise 3095 TTTWD 6.28 n.a. n.a. n.a. n.a. 0.6 n.a. n.a. n.a. n.a. n.a. n.a. Foxconn Technology Co Ltd 2354 TTTWD 68.20 13.4 12.812.0 11.7 1.8 n.a. n.a. n.a. n.a. 1.4 n.a. Catcher Technology Co Ltd 2474 TTTWD 202.00 9.9 11.311.3 9.9 1.8 n.a. n.a. n.a. 20.8 3.3 n.a. Cheng Uei Precision Industry 2392 TTTWD 64.30 15.8 14.612.5 10.7 1.4 n.a. n.a. n.a. n.a. 4.0 n.a. Largan Precision Co Ltd 3008 TTTWD 1,165.00 18.7 17.014.1 12.6 4.5 5.54.5 3.4 31.3 2.0 n.a. Merry Electronics Co Ltd 2439 TTTWD 175.50 14.0 31.720.8 13.4 1.5 6.25.6 n.a. n.a. 1.4 n.a. Arima Communications Corp 8101 TTTWD 14.10 n.a.26.19.3 5.7 1.8 1.51.3 n.a. 6.2 0.0 n.a. Simple Average 17.8 19.414.4 13.4 1.9 2.92.5 2.0 16.8 2.5 6.6 Weighted Average 13.0 18.513.8 12.5 2.8 2.32.0 1.4 17.8 2.1 3.2 Source: Bloomberg, Guotai Junan International. 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Financial Statement and Ratios Income Statement Balance sheet Year end Dec (RMB m) 2011A 2012A 2013F 2014F 2015FYear end Dec (RMB m) 2011A 2012A 2013F 2014F 2015F Turnover 46,312 44,381 48,082 53,899 60,165 Cash 3,7373,4874,1734,4235,887 Handset comp & services 19,557 17,155 15,842 15,996 15,461 Inventories 6,5967,3457,8018,8349,960 Rechargeable Batteries 4,620 4,675 5,728 6,091 6,720 Trade and other Receivables 9,7829,937 10,98 1 12,55 6 14,29 6 Automobile 22,136 22,551 26,512 31,812 37,984 Prepayment, deposit and other receivable 2,2962,226745783823 Cost of Sales (39,445 ) (39,255 ) (41,544 ) (45,505 ) (50,301 ) Pledge deposit 311197133160183 Gross profit 6,867 5,126 6,538 8,394 9,864 Others 57132145159175 Current Assets 22,78 023,324 23,97 8 26,91 4 31,32 4 Selling & Distribution Costs (1,800) (1,512) (1,827) (1,994) (2,286) Admin (2,126) (2,055) (2,068) (2,479) (2,768) PPE 31,89 435,432 37,22 9 39,13 6 41,17 5 R&D (1,374) (1,150) (1,250) (1,482) (1,745) Intangible Assets 2,4153,6034,4555,4426,580 Other expenses (389) (205) (337) (269) (301) Deferred tax assets 5867861,2462,4673,984 Finance Costs (742) (862) (868) (854) (998) Prepaid land lease payment 4,2084,3134,9435,6826,578 Gov Grants 301 550 385 431 391 Non-current prepayment 4,3271,5082,9783,1313,294 Other gains 988 423 369 482 548 Other 6711,0401,1101,2141,329 Share of profit 1 (25) (70) (81) 15 Non-current Assets 44,10 146,684 51,96 0 57,07 2 62,93 9 EBT 1,727 291 871 2,147 2,720 Taxes Expenses (132) (78) (220) (524) (685) Trade payables 17,23 618,952 20,58 3 22,15 0 25,22 0 Minority Interest (after Tax) (210) (132) (86) (214) (269) Bank borrowing 11,34 211,288 11,68 7 12,16 6 12,57 4 Net Income (Loss) 1,385 81 566 1,409 1,766 Other payable and accruals 3,5243,6663,6414,0964,633 Advances from customers 1,8712,7143,6764,7545,957 Basic EPS (RMB) 0.598 0.035 0.240 0.599 0.750 Other liabilities 656609585740911 BPS (RMB) 10.187 10.256 12.307 12.778 13.624 Current Liabilities 34,62 837,228 40,17 1 43,90 7 49,29 4 Dividend per share (RMB) 0.000 0.000 0.000 0.000 0.150 Long Term bank borrowing 7,0797,3414,9447,819 10,26 4 Deferred income 1,1931,2941,1631,032904 Cash Flow Statement Others 106881,1481,729 Year end Dec (RMB m) 2011A 2012A 2013F 2014F 2015F Non-current liabilities 8,2738,6356,7969,999 12,89 7 EBT 1,727 291 871 2,147 2,720 Net Assets 23,98 025,009 26,18 9 27,61 5 29,16 3 Depreciation for PPE 2,516 3,020 3,270 3,665 4,091 Amortization of prepaid land lease 162 236 524 643 781 Share Capital 2,3542,3542,3542,3542,354 Finance cost 742 862 868 854 998 Reserve 18,77 018,843 23,58 3 24,47 8 26,20 3 Interest Income (55) (51) (47) (50) (67) Minority Interest 2,8562,9473,0333,2483,516 Impairments 485 324 399 445 494 Shareholders’ Equity 23,98 024,144 28,97 1 30,08 0 32,07 3 Change in Inventories (245) (966) (612) (1,209) (1,326) Change in receivables (2,093) 101 (1,176) (1,726) (1,912) Profitability Analysis Change in payable 5,384 1,447 1,631 1,567 3,069 2011A 2012 A 2013F 2014F 2015F Change in other operating items (1,494) 1,144 2,482 1,554 1,767 Gross profit margin(%) 14.8 11.6 13.6 15.6 16.4 Others (857) (605) (928) (299) (243) Handset comp & services 12.0 9.3 10.3 11.0 11.8 Interest received 55 51 47 50 67 Rechargeable Batteries 9.6 8.5 9.3 13.0 13.0 Taxes paid (344) (299) (265) (415) (572) Automobile 18.3 13.9 16.5 18.4 18.9 Cash flow for operation 5,985 5,555 7,064 7,227 9,869 Net profit margin(%) 3.0 0.2 1.2 2.6 2.9 ROE(%) 6.1 0.3 2.1 4.8 5.7 Net Investments in PPE (7,160) (5,495) (4,995) (5,498) (6,052) ROA(%) 2.1 0.1 0.7 1.7 1.9 Receipt of gov grants 286 (54) (146) (143) (140) Growth Analysis Net change of prepaid land lease (270) (144) (630) (755) (914) Rev from handset comp(%) (4.8) (12.3) (7.7) 1.0 (3.3) Others (1,779) 1,083 (1,454) (1,879) (2,083) Rev from rechargeable batteries(%) 0.8 1.2 22.5 6.3 10.3 Cash flow for investing (8,923) (4,610) (7,226) (8,275) (9,189) Rev from auto sales(%) 2.7 1.9 17.6 20.0 19.4 EPS(%) (46.1) (94.2) 595.1 149.1 25.3 Net change of bank loans 4,733 (85) 1,997 2,396 2,037 BPS(%) 9.6 0.7 20.0 3.8 6.6 Interest paid (1,056) (1,173) (1,244) (1,223) (1,430) Liquidity and solvency Dividend paid 0 0 0 0 0 Gearing ratio(%) 66.4 63.8 47.4 53.3 55.1 Others 1,058 41 62 93 140 Interest cover 2.3 0.9 1.4 2.5 2.6 Cash flow for financing 4,736 (1,217) 815 1,266 747 Cash ratio 11.7 9.9 10.7 10.4 12.3 Quick ratio 46.7 42.9 40.3 41.2 43.3 Net change of cash flow 1,798 (271) 653 218 1,427 Efficiency Analysis Cash at the beginning of year 1,979 3,737 3,487 4,173 4,423 Inventory Turnover 7.0 6.0 6.2 6.1 6.0 Other adjustment (39) 21 33 32 37 Days receivable 77 82 83 85 87 Cash at the end of the year 3,737 3,487 4,173 4,423 5,887 Days payable 111 149 156 150 153 Source: the Company, Guotai Junan International. 29 J an ua ry 2 01 4 A ut om ob ile S ec to r 汽 车行业 S ec to r R ep or t See the last page for disclaimer of 25 Company Rating Definition The Benchmark: Hong Kong Hang Seng Index Time Horizon: 6 to 18 months Rating Definition Buy Relative Performance >15%; or the fundamental outlook of the company or sector is favorable. Accumulate Relative Performance is 5% to 15%; or the fundamental outlook of the company or sector is favorable. Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the company or sector is neutral. Reduce Relative Performance is -5% to -15%; or the fundamental outlook of the company or sector is unfavorable. Sell Relative Performance <-15%; or the fundamental outlook of the company or sector is unfavorable. Sector Rating Definition The Benchmark: Hong Kong Hang Seng Index Time Horizon: 6 to 18 months Rating Definition Outperform Relative Performance >5%; or the fundamental outlook of the sector is favorable. Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the sector is neutral. Underperform Relative Performance <-5%; or the fundamental outlook of the sector is unfavorable. DISCLOSUREOFINTERESTS (1) The Analysts and their associates do not serve as an officer of the issuer mentioned in this Research Report. (2) The Analysts and their associates do not have any financial interests in relation to the issuer mentioned in this Research Report. (3) Except for Shandong Chenming Paper Holdings Limited-H shares (01812) and China City Railway Transportation Technology Holdings Company Limited (01522), Guotai Junan and its group companies do not hold equal to or more than 1% of the market capitalization of the issuer mentioned in this Research Report. (4) Guotai Junan and its group companies have had investment banking relationships with Xiezhong International (3663HK) mentioned in this Research Report within the preceding 12 months. Guotai Junan and its group companies have not had investment banking relationships with DFG (00489HK) / Geely Auto (00175HK) / BYDCorporation (01211HK) / Sinotuk (03808HK) / Brilliance (01114HK) / Great Wall Motor (02333HK) mentioned in this Research Report within the preceding 12 months. DISCLAIMER This Research Report does not constitute an invitation or offer to acquire, purchase or subscribe for securities by Guotai Junan Securities (Hong Kong) Limited ("Guotai Junan"). Guotai Junan and its group companies may do business that relates to companies covered in research reports, including investment banking, investment services and etc. (for example, the placing agent, lead manager, sponsor, underwriter or invest proprietarily). Any opinions expressed in this report may differ or be contrary to opinions or investment strategies expressed orally or in written form by sales persons, dealers and other professional executives of Guotai Junan group of companies. Any opinions expressed in this report may differ or be contrary to opinions or investment decisions made by the asset management and investment banking groups of Guotai Junan. Though best effort has been made to ensure the accuracy of the information and data contained in this Research Report, Guotai Junan does not guarantee the accuracy and completeness of the information and data herein. This Research Report may contain some forward-looking estimates and forecasts derived from the assumptions of the future political and economic conditions with inherently unpredictable and mutable situation, so uncertainty may contain. Investors should understand and comprehend the investment objectives and its related risks, and where necessary consult their own financial advisers prior to any investment decision. This Research Report is not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Guotai Junan and its group companies to any registration or licensing requirement within such jurisdiction. 2014 Guotai Junan Securities (Hong Kong) Limited. All Rights Reserved. 27/F., Low Block, Grand Millennium Plaza,181 Queen’s Road Central, Hong Kong. Tel.: (852) 2509-9118 Fax: (852) 2509-7793 Website:

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