Sealand: The seventh emission standard is gradually approaching, It is recommended to focus on six key aspects.

Sealand released a research report stating that the National VI standard has entered a policy window period, and the post-treatment and electronic control systems are expected to see a simultaneous increase in quantity and price. The existing oligopoly is expected to enter a new era of benefiting from industry expansion. It is recommended to focus on six major areas: catalysts, honeycomb ceramic substrates, system integration, sensors, testing services, and electronic control (EMS) links. At the same time, there is an outbreak of demand for exhaust gas treatment in AI data centers gas generators, and it is recommended to focus on enterprises that have already obtained designated projects in this field. The industry's "recommended" rating is maintained. Sealand's main points are as follows: Policy and pace: National VI standard enters policy window period, theme debates begin The National VI standard is expected to achieve three major breakthroughs in the regulatory framework: coordinated control of pollutants and greenhouse gases, addition of unconventional pollutants and non-exhaust emissions, and the establishment of a long-term emission reduction mechanism complemented by "vehicle model + fleet." With reference to the progress of Euro VII, which is officially implemented in November 2026, National VI is expected to be implemented in 2028, with key regions possibly starting trial runs in 2027. In terms of investment pace, it is expected that 2026 to 2027 will be a period of intense policy expectations and project designation, and production realization will gradually commence from 2028 onwards. The market will go through a theme cycle of "expectation implementation realization". Incremental structure and benefiting links National VI is expected to drive comprehensive upgrades of exhaust gas after-treatment systems and electronic control systems. New components will be mass-produced, including EHC (electric heating catalyst), ccSCR (closely coupled selective catalytic reduction), nitrogen oxide sensors, etc. (T8, T9); existing components will be upgraded or replaced, GPF / DPF need structural upgrades, TWC catalytic converter volume and precious metal coating will significantly increase, SCR needs upgrading to address low temperature conversion rate issues, OBD systems will be upgraded from routine diagnosis to mandatory real-time monitoring. Competitive landscape: Existing players in oligopoly competition, deepening domestic substitution The exhaust gas after-treatment industry has undergone restructuring in the National VI phase, and leading companies have established technological, customer, and scale barriers. In the catalyst field, there is room for domestic substitution, with SINOTECH and Actblue Co., Ltd. already deeply involved in National VI pre-research; in the carrier field, Aofu Environmental Technology Co., Ltd. is a pioneer in domestic substitution; in the sensor field, Jiangsu Yunyi Electric is accelerating domestic substitution. In the electronic control and testing sectors, Wuhan Lincontrol Automotive Electronics Co., Ltd. has built a barrier as the largest domestic independent EMS supplier, and China Automotive Engineering Research Institute, as the core testing service provider for regulatory upgrades, is the first to benefit from tightening standards. In overall assessment, companies with technical reserves, customer bases, and complete industrial chains are expected to continue benefiting throughout the National VI cycle. Risk factors: Policy implementation pace slower than expected; lack of full comparability among different country policies; continuous decline in sales of fuel vehicles; fluctuations in raw material prices; increased risk of intensified industry competition; increased risk of compliance costs for exports; overseas market expansion slower than expected; focus on company performance falling short of expectations.