On September 16, a research report from Huatai Securities highlighted that in the second quarter, the automotive sector witnessed a 9.0% year-on-year and 16.6% quarter-on-quarter increase in revenue. Sales of passenger vehicles sustained a steady upward trajectory, with wholesale and retail volumes surging by 11% and 13% quarter-on-quarter, respectively. Consequently, the revenue of the passenger vehicle segment climbed by 11% year-on-year and 22% quarter-on-quarter. Nevertheless, the net profit margin for the second quarter saw a decline of 1.4 percentage points year-on-year and 0.8 percentage points quarter-on-quarter. This could be attributed to heightened competition among domestic brands and factors like consumer discounts on new cars, which temporarily impacted profitability.

Regarding financial metrics, the days sales outstanding (DSO) for the passenger vehicle sector experienced a year-on-year and quarter-on-quarter decrease in the second quarter. This drove a substantial net increase in operating cash flow, amounting to RMB 25.2 billion year-on-year and RMB 97.2 billion quarter-on-quarter. In the auto parts sector, the DSO registered a slight quarter-on-quarter decrease in the second quarter, although the advantages of shortened payment terms have not yet been fully reflected in the financial statements.

Furthermore, the trade-in policy is anticipated to offer robust support for the peak sales season in September and October. It is recommended to focus on sub-sectors such as intelligent auto parts, tires benefiting from the drop in raw material prices, and motorcycles with exceptional export performance.