Auto ETF Guotai (516110) rises over 1.2%, focusing on opportunities in the internal combustion engine industry chain driven by AI power shortages.

On April 1, the Cathay Automobile ETF (516110) rose more than 1.2%, focusing on opportunities in the internal combustion engine industry chain driven by AI and power shortages

Guotai Junan Securities noted that in March, some rebound appeared in certain vehicle OEM targets, and the focus going forward will be on the sustainability of order recovery and on whether earnings in financial reports can be delivered. In the domestic market, taking 150,000-yuan models as an example, cost increases since the beginning of the year may lead to a gross margin pullback of about 3–5 percentage points that the entire industrial chain needs to absorb, and automakers may respond through technological upgrades and price increases. In overseas markets, fluctuations in oil prices may further boost demand for new-energy vehicles going overseas; it is expected that ocean freight capacity could become the main constraint on sales ramp-up. In addition, AI power-generation coordination is driving a significant increase in electricity generation demand; given a mismatch between supply and demand as well as infrastructure iteration, it is expected that there are room for volume expansion opportunities in gas turbines, internal combustion engines, and the like. Among them, internal combustion engines have characteristics such as ample production capacity and fast delivery, and the opportunity in the internal combustion engine industry chain driven by AI and power shortages is favored, with attention to the release of orders for exhaust-emission products. In the first quarter, the auto sector underperformed the market, while passenger vehicles performed better than components.

The Cathay Automobile ETF (516110) tracks the 800 Automobile Index (H30015). This index selects securities of listed companies related to the auto industry from China’s A-share market as index constituents, covering business areas such as passenger vehicles, commercial vehicles, and component manufacturing, to reflect the overall performance of China’s auto industry and related industrial chains. Its sector allocation is concentrated in the auto manufacturing sector, and the style balances growth and value.

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Daily Economic News

(Editor: Guo Jiandong ）

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