Huatai Securities: The revenue of the automotive sector in the second quarter showed stable growth, riding on the strong seasonal market momentum supported by policies.

Huatai Securities research report shows that in the second quarter, the revenue of the automobile sector increased by 9.0/16.6% on a quarter-on-quarter basis, with stable growth in passenger car sales and a quarter-on-quarter increase of 11%/13% in wholesale and retail sales. The revenue of the passenger car sector increased by 11%/22% on a quarter-on-quarter basis, while the net profit margin decreased by 1.4/-0.8 percentage points on a quarter-on-quarter basis, possibly due to intensified competition in self-owned brands and factors such as new car discounts for consumers temporarily affecting profitability. The accounts receivable turnover days for the passenger car sector in the second quarter decreased on a quarter-on-quarter basis, leading to a net increase in operating cash flow of 25.2/97.2 billion yuan. The accounts receivable turnover days for the components sector in the second quarter slightly decreased on a quarter-on-quarter basis, and the contraction of accounts payable is a positive factor that has not yet been fully reflected in the financial statements. The "old-for-new" policy may strongly support sales during the peak "Golden September and Silver October" season. Attention should be paid to sub-sectors such as intensively catalyzed intelligent components, favorable tire prices due to falling raw material prices, and excellent export performance in the motorcycle sector.