SAIC Group (600104): Destocking is coming to an end, waiting for sales to stabilize and pick up

Event: The company released its March production and sales report, achieving a total sales volume of 55.

80,000 vehicles in the past ten years 14.

0%.

Among them, SAIC Volkswagen achieved sales of 16.

70,000, New Year’s Eve 5.

9%; SAIC-GM achieved sales of 14.

90,000, ten-year average of 10.

0%; SAIC passenger cars achieved sales of 5.

0 million, a ten-year average of 19.

1%; SAIC-GM-Wuling achieved sales of 17.

0 million, New Year’s Eve 22.

7%.

Active destocking continued, Q1 sales increased by 15.

9% of the company’s sales decreased by 14 in March.

0%, Q1 sales exceeded 15.

At 9%, the company’s sales volume decreased significantly initially: 1) The industry boom is still building.

Since July 2018, the industry sales volume has been continuously alternating monthly. This round of industry sales volume has experienced 9 consecutive months of fluctuations, which is a history of continuous continuous fluctuation cycles. 2) The impact of active destocking.

The prosperity of the current round has declined, and the industry inventory has accumulated and was once at a high level. In the first 杭州桑拿网 quarter, auto companies generally entered the active destocking stage, resulting in weak performance of batch sales data.

We believe that the industry is expected to usher in a gradual recovery in the second quarter, and the decline in sales volume will further narrow. The company’s leader is obviously significant, and it is still expected to outperform the industry to usher in steady growth.

In the industry with common performance, SAIC-Volkswagen’s sales volume increased by 5 in the three months with independent residual pressure.

9%, SAIC-GM sales increased by 10 in March.

0%, the previous decline has narrowed, and the growth rate has been continuous in the industry.

We believe that SAIC Volkswagen has continued to list and maintain new product launches in recent years. SAIC Motor will use it to launch a 深圳SPA会所 number of new SUVs in 2019. Co-brand sales are expected to change the industry recovery and warm up.

The sales range of SAIC Auto over the past three months was 19.

1%, SAIC-GM-Wuling sales increased by 22 in March.

7%, a year of decline.

We believe that the weakening of consumption capacity in third- and fourth-tier cities is one of the reasons for the weak sales of independent brands due to the decline of the macro economy and the cancellation of shed reform monetization.

After years of strong independent product cycles in recent years, the layout of self-owned brand products has been expanded and improved. Both main models such as RX5, i5, and MG HS have undertaken sales, and black technology models such as Marvel X have demonstrated their R & D capabilities and enhanced the value of independent brands.Sales are expected to usher in steady growth as the industry recovers.

Profit forecast and investment advice The company is a leading domestic vehicle with stable performance for many years.

At present, the company’s joint venture is still in a strong product cycle, its profitability is stable, and it is in a strong upward trend.

The EPS is expected to be 3 in 2019-2021.

26/3.

43/3.

58 yuan, corresponding PE is 8 respectively.

8/8.

3/8.

0 times.

Maintain “Buy” rating. Risk warning: The industry’s prosperity is lower than expected, and the company’s sales are lower than expected.