Event:
In April, 1.1568mn vehicles were produced, with month-on-month and year-on-year increase at 5.61% and 17.89% respectively; meanwhile, 1.1531mn vehicles were sold, with month-on-month and year-on-year increase at 3.91% and 24.97%. April production & sales volume broke the record in March and set the new high. In the first four months of 2009, industrial production and sales volume pegged at 3.7248mn and 3.8319mn respectively, with year-on-year surge at 6.40% and 9.43% separately.
Our Analysis and Estimation:
Viewed from April production & sales volume, vehicle models that benefited from favorable policies on vehicle purchase tax maintained growth. Sales volume of saloon car was 591.5 thousand, with month-on-month growth at 8.34% and year-on-year increment at 33.04%.
Sales volume of MPV still tended to see slight decline and stood at 19.5 thousand, with month-on-month decline at 3.54% and year-on-year drop at 4.05%.
Commercial vehicles saw slight decline due to seasonal fluctuation.
Investment Suggestion:
We hold that industrial profitability will rally as driven by rebound of main vehicle models of partial mainstream joint venture co-brandings. As per estimation, dynamic P/E ratio of overall A-share auto board is 31x, with P/B at 2.7x; viewed from estimation history, current estimation is relatively high. “Cautious” rating is given to auto industry.