Changan Automobile (000625) Quick Review of Major Events: Ford Releases 3 New Cars, Progressive Product Cycle

Changan Automobile (000625) Quick Review of Major Events: Ford Releases 3 New Cars, Progressive Product Cycle
Matters: Changan Ford releases three new models including Focus ACTIVE, Sharpline, and Taurus. Guoxin perspective: Ford released in the early stage 2.0 strategy, continue to promote the localization of the Chinese market at the level of products, research and development, and the introduction of new models is strong. 2019 will usher in a strong product cycle.Recently, Ford has released three models again.We believe that the follow-up industry gradually narrows gradually, and the probability of extension in the second half of the year will achieve several times a month of wholesale normalization, while Changan Ford has a clear month-on-month improvement trend driven by the recovery of the industry and the new model.We expect the company’s initial net assets to be 9 in 2019-2021.64/9.77/9.98 yuan, taking into account the subsequent company turned losses into profit, the trend of significant improvement in profit is obvious, the benchmark PB is basically at 1.2-1.5PB interval (Great Wall Motor 1.50PB, SAIC Group 1.24PB, GAC Group 1.46PB), giving the company a 2019 P / B ratio of 1.0-1.1x estimation, corresponding to a reasonable estimation interval 9.64-10.60 yuan, maintain “Buy” rating. Comment: The product cycle is gradual. Ford releases three models. Ford recently released three new models in the Chinese market. These are the Focus ACTIVE, which is positioned as the city’s cutting-edge SUV.Taurus. Currently, Fox models include hatchbacks and sedans. The initial position of the Fox ACTIVE is a cross-border model, but the actual size and appearance are smaller SUVs, so it can increase the number of models for which the Fox is sold, and also eliminate Changan Ford.Currently missing in the field of small SUVs.As a mid-range reformed model, Ruijie has been improved by the combination of various aspects. The product strength has been improved after the mid-term change, which can increase sales to a certain extent on the existing basis.The Taurus overall change of sights should be regarded as a C-class car from the model level, but it is mainly a B-class car, especially the low-and-medium price basically goes down to the volume of B-class cars. At present, Changan Ford’s B-Class Mondeo is at the end of its life cycle. Taurus is expected to replace Mondeo as Changan Ford’s B-Class sedan. Fox ACTIVE: The configuration advantage in the field of small SUVs is obvious. It is expected to sell about 3,000 units per month. Initial benchmarking: The 2020 Fox Hatchback version.Expensive 3,000 yuan. The overall configuration has been slightly improved, which is reflected in: First, the size: the overall size of the vehicle has increased, including an increase of 19mm in length, 38mm in width, 50mm in height, and the same wheelbase, but improved passability, defined asSUV, the space has improved while maintaining power; second, the interior: the main change is the central control screen, from 8 inches to 12.3 inches; Third, intelligent deployment: the content of language recognition has increased, navigation, multimedia, air conditioning, etc. have been added to the low profile, and navigation and air conditioning have been added to the high profile. Horizontal benchmarking: The comparative advantages of XR-V, Tange and other small SUVs and XR-V are mainly reflected in: First, the size and change of wheelbase: Especially the wheelbase is separated by XR-V, which increases by 95mm, and the overall space is positive.Better performance; second, better power and prevention: Fox ACTIVE engine is 1.5T, for horsepower 174, the maximum power and molecular weight are better than XR-V performance, while fuel consumption.XR-V uses 1.5L naturally inhales.Transmission mechanism, ACTIVE uses 8AT and nozzle-type shift, XR-V uses CVT, rear suspension of converted XR-V uses non-independent suspension system; third, from the perspective of interior, ACTIVE uses 12.Large 3-inch screen, XR-V uses 8-inch large screen. Sales forecast: The monthly sales are 3,000 units / month. The average monthly sales volume of the XR-V in the past 4 years is 13,200 units / month, and the average monthly sales volume in the last year is 12,850 units / month.Tange went on sale in July 2018, with an average monthly sales of 8356 vehicles per month in the past year.We believe that although the Fox ACTIVE is defined as a partial cross-border model, it mainly focuses on small SUVs. However, since the ACTIVE is only a distributed model as part of the Fox model, we expect monthly sales to be 3,000 vehicles per month. Sharp: The appearance is improved, and the configuration is significantly improved. It is expected that the overall monthly sales will rise to 4,000 vehicles per month.The 6AT is increased to 8AT, and the interior is equipped with 12.Large 3-inch screen (previously 8-inch). Third, the overall design is more sporty and stylish.In addition, Ruijie added a high-profile model, at least 38.980,000, configuration size has been improved, size power, tires, etc. Horizontal benchmarking: The 7-seat Highlander Sharp World focuses on 7-seater models, mainly benchmarking Highlander.The overall size is close to the Highlander. The Axle has a longer and more advantageous wheelbase. The wheelbase is 60mm longer than the Highlander. The power is better. The gearbox 8AT has a higher configuration than the Highlander 6AT. The interior control screenLarger, in addition to language recognition, active and passive safety, cruise system equipped with extended advantages and extended advantages. Sales analysis: It is expected that the sales volume of the new Sharp will increase by 1000-2000 units / month, and the overall sales of the Sharp will rise to 4000 units / month. The benchmark model Highlander sold 8641 units / month in the last year and8,300 vehicles / month.The sales volume of Ruijie in the past year was 2933 vehicles / month, and the average sales in three years were 6,834 vehicles / month.On the whole, the 7-seat mid-size SUV segment where Ruijie and Highlander are competing for replacement. From the sales volume of the past three years, the average power of Sharpworld is slightly inferior to Highlander. At present, Highlander is in the product life cycle.At the end, GAC Toyota will face capacity problems in the next six months.Combined with the channel investigation and analysis, we expect that the new Ruijie will bring sales of 1,000-2000 units, and the overall sales of Ruijie will rise from the current 2500 units / month to 4,000 units / month. Taurus: configuration upgrades, down to B-level misalignment competition, it is expected that monthly sales will rise to 3,000 vehicles per month. Vertical benchmarking: the ratio of old Taurus to old Taurus, low and high priced at 10,000 cheaper, overall shape is somewhatWith the increase, tire size has increased.The gearbox was increased from 6AT to 8AT.In addition, intelligent configuration such as parallel line assistance, lane prediction in advance, lane keeping assistance system, road traffic sign recognition, active braking and active safety system are more abundant.Interior baselines, the central control screen increased from 8 inches to 12.3 inches. Horizontal benchmarking: Toyota Crown, Cadillac XTS, Volkswagen Passat Taurus is positioned as a medium-sized car, but the size is basically the same as that of a medium-sized Toyota Crown.Compared with the Toyota Crown, the appearance is in the sunroof, the tire size has advantages, and the power advantage is relatively obvious. The interior is matched.8 inches compared to 5 inches for the crown. With Cadillac XTS series wheelbase, power, and transmission (6AT), interior (large screen) size advantages.The biggest advantage with Passat size is the size (length 85mm, wheelbase 78mm), dynamic power and transmission (7WT) configuration size. Sales analysis: It is estimated that monthly sales in the future will be 3,000 vehicles / month. The average monthly sales of Taurus in the past three years is 1,464 vehicles / month, and the sales of Taurus in the latest year is 251 vehicles / month.In the past three years, the sales volume of the Crown was 2,734 vehicles / month, in the last year, the sales volume was 1,879 vehicles / month, in the last three years, the sales volume of the Cadillac XTS was 4,331 vehicles / month, and in the latest year, the sales volume of Cadillac was 5,183 vehicles / month.Taurus mid-range models are priced at 22.89 and 24.890,000, plus some terminal discounts after the listing, basically lowered the price range of mainstream B-class vehicles near 200,000. Taurus itself, as a C-class vehicle, focuses on the B-class market, and has significant advantages in size and configuration.Combined with channel investigation and analysis, we estimate that Taurus’ potential monthly sales will be 3,000 units / month. Risk reminders: First, Ford’s new product introduction rate is slower than expected, and Ford sales are lower than expected; second, the industry’s supply-side competition has intensified, and the company’s new product market recognition has exceeded expectations; third, the industry’s recovery has exceeded expectations. Investment suggestion: underestimate, large cycle, maintain the “buy” rating company’s core focus is Changan Ford. In the short term, Changan Ford sales have not yet significantly improved, mainly due to demand-side factors and the initial stage of the product cycle.In the long run, the domestic auto industry is in a transition from growth to maturity, competition among OEMs has intensified, and the impact of product cycles on sales and profits has become more prominent.Changan Ford’s “1515 Plan” launched Mondeo, Yihu, Yibo, and Ruijie models to accelerate sales and profit growth. Subsequently, 2016-2018 replacement models were scarce.The “330 Plan” was launched in 2019, and 30 new models were launched within 3 years, and product introduction began to accelerate.We are optimistic that Ford will increase the reform of the Chinese market (department, model, R & D, and channel) to accelerate the rapid recovery of sales and profitability of Changan Ford after the introduction of new cars.Considering that the company is not yet profitable, we estimate it based on PB, and we expect the company’s net assets to be 9 in 2019-2021.64/9.77/9.98 yuan. Considering that the company will turn losses into profits in the later period, the profit is expected to improve significantly, and the target PB is basically at 1.2-1.5PB interval (Great Wall Motor 1.50PB, SAIC Group 1.24PB, GAC Group 1.46PB), our company gives a P / B ratio of 1 in 2019.0-1.1x 杭州桑拿网 estimation, corresponding to a reasonable estimation interval 9.64-10.60 yuan, maintain “Buy” rating.