Also in the heavy warehouse of new energy vehicles, this year can only sit on the bench
New energy vehicle plate fire for two years, whether the upstream lithium cobalt, battery, downstream vehicle, share prices are high, facing a lot of pressure.If we continue to engage in value investment at a high level and plan to continue the pattern, we are afraid that we will only be left on the bench this year.According to the China Automobile Association, 530,000 electric vehicles were sold in China in December 2021, +114% year-on-year and +11% month-on-month.Data showed that in December, China’s passenger vehicle penetration rate of new energy vehicles exceeded 20 percent for the first time, reaching 20.6 percent.In Europe, 176,000 pure electric vehicles and 160,000 diesels were sold in 18 western European countries in December 2021.This is the first time in European history that monthly sales of pure trams have surpassed those of diesel cars, and the penetration rate of pure trams in the local market has reached 21%.From the perspective of industry, any product can be divided into “introduction period – development period – maturity period – decline period”.Singularity means that a new product enters the accelerated penetration stage. Penetration rate of 20% is the singularity level, and it may accelerate penetration to 40% in the future.The industry is likely to accelerate, but for the capital markets, the fastest valuations have passed.Going forward, earnings are still going up, but valuations are going to come back because growth is slowing.In other words, the singularity position is the ceiling of valuation.For those unfamiliar with singularity logic, this logic can be compared to the period of accelerating smartphone penetration from 2009 to 2013.After two years of large increases in excess earnings in 2009-2010, the electronics sector has seen a sharp retreat in 2011.The main reason is that when the penetration rate started to accelerate in the early stage, most enterprises did not expect it, so the capacity reserve is insufficient, and the revenue growth is much faster than the capacity growth.Over the next two years, most companies will quickly adjust their capacity building for future penetration.By 2011, although the penetration rate of mobile phones increased and the income growth rate of the electronic industry was still more than 20%, the periodical concentration of production capacity led to the decline of the gross profit margin of the industry.Thus, even in the rapid improvement of industry demand stage, there has been a periodic rest of excess earnings.After two years of continuous rise in excess returns, the new energy industry may also face a similar annual level of recovery in 2011 for the electronic industry.From the perspective of production capacity, the capital expenditure of the new energy industry will increase significantly in 2021, and the concentrated production capacity of the electronics industry in 2022 May be similar to that in 2011.Revenue growth, though still not low, has peaked and fallen, and capacity growth is likely to exceed revenue growth.Simply put, next year, faced with concentrated production capacity, revenue growth rate, gross margin is likely to decline.For electric vehicles, the current penetration rate has reached 20%, and it is widely estimated that it will reach 30% by the end of 2022.However, compared with that in 2011, two new variables appeared: first, subsidy regression.In 2022, the national subsidy standards for new energy vehicles will be reduced by 30 percent from 2021, and all of them will be withdrawn by the end of the year.Some new car makers try to raise prices to maintain costs, which is bound to cause dissatisfaction among users.Second, premium increases.The premium of new energy vehicles has always been higher than that of fuel vehicles, with the launch of new energy exclusive car insurance at the end of December, the premium of popular brand models fluctuated again.In addition, more and more new cars adopt aluminum alloy body, integrated die casting.For example, for a certain car model, more than 70 parts will be integrated into two large parts, manufacturing, time and labor costs will be greatly reduced, the future body will only be composed of 8 parts.Yeah, but the cost of repairs is creeping up, it’s not friendly, and that’s what it’s doing.With the development of the industry, more and more people pay attention to the car track, and the competition is intensifying.In midstream battery, LG New Energy is about to IPO.As of May 2021, LG New Energy has become the world’s no. 1 power battery manufacturer with 5.7Gwh installed capacity.From the perspective of LG New Energy’s customers, a large number of leading automobile companies, including Tesla, GENERAL Motors, Volkswagen, Hyundai and Volvo, sit in the company, which has become an important source of its income.In terms of capacity planning, LG New Energy plans to expand battery capacity to 300GWh in 2023 and 430GWh in 2025.According to zheshang Securities forecast, ningde times 2023 production capacity of about 340GWh.According to public information, its planned capacity before 2025 is already close to 600GWh.In addition, Volkswagen, Great Wall, Geely and other traditional car companies are also in the battery field, and launched a huge investment plan.Downstream vehicle, traditional fuel vehicles are accelerating into the market.Ford’s Mustang new energy vehicle has set up its own stand at a mall in Beijing.Mercedes-benz, BMW, Volkswagen and other auto companies have announced new energy development plans for the next two years.Volkswagen will expand production of electric cars in China to 900,000 units a year, according to German newspaper Welt.BMW has said it will expand the number of new energy products in The Chinese market to seven in 2022.In 2022, Mercedes-Benz will launch 21 new products based on the Chinese market, including 8 pure electric and plug-in hybrid models.All this competition is bound to compress profit margins.When high growth is gone, valuations can’t be that high.The whole industrial chain began to digest the high valuation stage, towards mean regression.The eternal roll-in new energy is the main stock selection logic of the market in the past two years, and the high prosperity of the industry level is the main thrust.The industry demand logic is still there, but the mismatch between supply and demand will not be the norm every year.In the past two years, with the price rise of the whole industry chain, more production capacity will be released in 2022. Coupled with the fluctuation of macro aggregate demand, there may be a one-year rest.The market has little disagreement about which industries are promising, but when industry trends are combined with valuations, the issue becomes complicated, especially in the short term.Growth in most manufacturing sectors is very strong in the long run, and it is hard to assume that demand will exceed supply in the long run.The time lag between stage technological progress, the short-term boom, is usually interpreted by the market as long-term, and then takes advantage of market sentiment and inefficiency, which is not sustainable.Also in the heavy warehouse of new energy vehicles, I am afraid to sit a year of cold bench.•END• Personal opinion, for reference only, not for recommendation.The stock market is risky and investment should be cautious.