Guojin Securities: Give the Auto Industry "Overweight" Rating

According to the latest investment report of China Gold Securities, in the first half of the year, the income and profit of the automobile industry increased significantly year-on-year, and the profit growth rate was significantly higher than the growth rate of income, which to a certain extent reflected the characteristics of “high flexibility and strong cycle” of the auto industry; Sub-sector comparisons: sales growth, auto parts industry> commercial vehicle industry> passenger vehicle industry, profit growth, commercial vehicle industry> passenger vehicle industry> automotive parts

Industry. Benefiting from the increase in revenue, the industry's operating efficiency indicators have been improved. It is noteworthy that in the sub-industries, the “operating cash flow/net profit” indicator in the first half of 2010 was lower than the level of the same period last year, mainly due to the In half a year, the increase in inventory and accounts receivable of automobile companies resulted in low operating cash flow.

The report also pointed out that according to the profit forecast of 26 key listed companies in the automotive and parts industries, the weighted average value of dynamic PE in the industry in 2010 was 15.41 times, including 13.81 times of total vehicles and 18.63 times of parts; this PE level has been In a historically low position, the 2010 EPS forecast has fully taken into account the downside risk of the industry in the second half of the year, and there is limited room for further downward adjustments. Therefore, the industry already has a certain margin of safety from this perspective; however, from the perspective of PB Looking at the average PB of the listed companies in the automotive industry, the average level is still about 3 times, which is in the middle of the historical level. In the first half of this year, the average ROE of the auto industry was 12.2%. It is expected that the average annual ROE will be above 20% in the whole year. Therefore, the overall industry is expected to give "Overweight" rating.