Import Tariffs Downgraded by Hot Resources for Hunting Auto Parts Stocks

On the next day after the Ministry of Finance announced the reduction of import tariffs on automobiles, auto stocks were very eye-catching. In particular, there were a total of 10 daily limit-related stocks in auto parts. The tax reduction news is naturally good news for domestic consumers, and the market is expected to have an impact on Chinese auto and auto parts manufacturers. However, yesterday's auto stocks did not only bear pressure diving, but they performed well.

Car stocks suddenly rise

On May 22, the automobile industry ushered in a heavy policy. The Ministry of Finance issued an announcement on the same day, starting July 1, 2018, reducing the import tariffs on autos and auto parts. Most analysts claim that auto stocks may experience short-term sell-off risks. However, after the opening of the A-shares on Wednesday, domestic auto stocks have suddenly risen in the disk. Statistics show that yesterday, the automotive sector, parts and related stocks performed the most dazzling, a total of 10 stocks daily limit, including Yue Ling shares (002725, shares it), Di Shengli, Steyr (000760, stock it), Longsheng Technology, Wantong Such as intellectual and control, Xinquan shares, Blue Dragonfly Drive (002765, shares it), Kim Kylin also rose more than 5%. In the auto vehicle segment, Haima Motor Co., Ltd. (000572 shares) surged 4.87%.

Regarding yesterday's car stocks rose, especially the collective upside of auto parts stocks, most agencies interpreted as a decline in import tariffs lower than the original pessimistic expectations, after the policy is on the ground, the auto sector valuation is expected to usher in a rebound.

Previously, due to the multiple pessimistic expectations of tariff reduction, the opening of the joint-venture stocks and the decline in sales in 2018, the automobile sector once saw a sharp correction. Afterwards, the automotive sector ushered in a rebound. Since May, Tongdaxin Automobile Index has increased by 6.03%.

Jiangsu and Zhejiang hot money actively sought after

According to the exchange's public information, the collective soaring of auto parts stocks yesterday was mainly due to hot money, with Jiangsu and Zhejiang hot money being the most active.

Data show that yesterday, a total of six auto parts stocks received a net purchase of funds, all of which are all hot money. Dishengli had the strongest buying power, with a net purchase amount of RMB 42.3 million, while the net purchases of Xiyi (002265, shares), Yuebo Power, and Yueling were all over RMB 20 million. Taier and Wantong intellectual control.

In the Drumpower list, the buyer’s top five sales departments purchased a total of 47.63 million yuan, accounting for 77% of its total turnover. The company’s securities business department, Fuzhou Hot Springs Road Branch, was ranked No. 5 among the sellers. The sales department sold a total of only 5.32 million yuan.

Xiyi Group was favored by two Hangzhou sales offices yesterday. It bought 14.69 million yuan from the Securities Business Department of Hangzhou Global Center, which bought a China Investment Group; and the securities business department of Hangzhou Xiaoshao Road, Guosheng Securities, purchased 5.42 million yuan.

The stocks of auto parts stocks soared yesterday and actively sought after hot money, mainly because the industry believes that the reduction of tariff rates will have a minor impact on domestic auto parts companies and will not change the current supply system based on domestically produced parts. According to the data from the China Industry and Business Research Institute, in 2017, the cumulative total of our auto parts imports was approximately USD 37 billion. It can be estimated that the imported parts and components accounted for approximately 9% of the average vehicle cost of the entire automobile, that is, domestic vehicle parts made up approximately 91%.