Lucid's plan to build a plant in China triggers supply chain expectations that the supplier's share price will soar by more than 8%

Published: Nov 17, 2021 16:36 (GMT+8)
[Lucid's plan to build a plant in China triggers supply chain expectations that the supplier's share price is expected to soar by more than 8 per cent] with the gradual expansion of the global new energy market, China's local new energy auto parts manufacturers are increasingly being watched by a number of large car companies, such as the famous Tesla supply chain, which is deeply tied to domestic manufacturers. The chief executive of US electric car company Lucid said on Wednesday that it plans to open factories in China and the Middle East around 2025, which means Lucid is expected to become the second overseas new energy car company to build a Chinese supply chain.

With the gradual expansion of the global new energy market, China's local new energy auto parts manufacturers are more and more concerned by a number of large car companies, such as the famous Tesla supply chain has been deeply tied to domestic manufacturers. The chief executive of US electric car company Lucid said on Wednesday that it plans to open factories in China and the Middle East around 2025, which means Lucid is expected to become the second overseas new energy car company to build a Chinese supply chain.

The announcement of Lucid has attracted active attention in the market, looking for potential suppliers of Lucid. Yihe Holdings (00838), one of the suppliers of Lucid, exclusively supplied automotive battery covers for Lucid, and said that Lucid had increased its shipments next year to 40, 000 units, which made investors bright, and the stock was immediately sought after by funds. As of press time, Yihe Holdings rose 8.33% to HK $2.34.

It is reported that the chief executive of Lucid, a US electric car company, recently said that he plans to open factories in China and the Middle East around 2025. Lucid has completed the delivery of its first batch of electric vehicles and plans to produce about 575 by the end of this year, rising to 20, 000 by 2022.

As of Tuesday's close, Lucid was up 23.71% at $55.520.

Yihe Holdings is not well known by most investors. after announcing its entry into the spare parts field, the company obtained the qualification of Tesla as a first-tier supplier in 2020 and began to produce Tesla's orders in the digital model (SLP) Automobile Industry Park in Mexico in July 2021. The first phase of the Mexican plant was completed in 2019 and has been put into production.

Guoyuan Securities pointed out that Yihe Holdings has the potential to cooperate with other car-making new forces and their supply chains in other auto parts, and expects the company's auto parts and new energy business to reach a revenue scale of 4-5 billion in the next 3-5 years.

At the same time, there are not a few auto parts companies like Yihe Holdings, including Fuyao Glass (Panorama Sky screen), Huayang Group (HUD), Ningde Times (battery), Yingheng Technology (smart seat) and other companies.

Zheshang Securities pointed out that in the future, as the downstream economy recovers, the industry enters the replenishment cycle, capacity utilization picks up, as well as raw materials, freight and other costs decline, the performance of parts companies with greater operating leverage is more resilient, so the sector is expected to usher in Davis double-click.

Zheshang Securities also mentioned that the automobile industry is facing changes in electrification and intelligence, and that the competition pattern of the automobile industry will change greatly in the future, and pointed out that high-quality enterprises in the electric vehicle industry chain need to blossom. Will fully benefit from the process of global automobile electrification.

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