Everbright Securities released a research report stating that high-level intelligent driving may be approaching a commercialization inflection point, while humanoid robots still await event-driven catalysts. Recent pressure on passenger vehicles primarily stems from a sales decline in January-February due to the Spring Festival and policy phase-outs, coupled with margin pressure from rising costs of raw materials like memory chips, batteries, aluminum, and copper since the beginning of the year. The synergy between AI computing and electricity demand is driving a significant increase in power generation requirements. Given mismatches in supply and demand alongside infrastructure upgrades, combined with issues like the retirement of traditional power sources and unstable output from new energy sources such as wind power, opportunities are anticipated for volume expansion in gas turbines/internal combustion engines and SOFC fuel cells. Among these, internal combustion engines offer advantages like sufficient production capacity and fast delivery times, leading to a positive outlook on investment opportunities within the internal combustion engine industry chain driven by AI-related power shortages.

Key points from Everbright Securities are as follows:

**Weak performance in the auto market during January-February** Domestic passenger vehicle retail sales in January fell by 13.9% year-on-year and 31.7% month-on-month to 1.544 million units. Wholesale sales decreased by 6.2% year-on-year and 29.3% month-on-month to 1.973 million units. New energy vehicle (NEV) retail sales dropped 20.0% year-on-year and 55.4% month-on-month to 596,000 units (NEV penetration rate of 38.6%), while NEV wholesale sales declined 3.3% year-on-year and 44.7% month-on-month to 864,000 units (NEV penetration rate of 43.8%). In February, various automakers began releasing sales figures. Li Auto reported sales of 26,000 units, up 0.6% year-on-year but down 4.5% month-on-month. XPeng's sales were 15,000 units, a decrease of 49.9% year-on-year and 23.8% month-on-month.

**Consumption stimulation and industrial upgrading remain core directives for the automotive industry** The 2026 Government Work Report continues to emphasize consumption stimulation and industrial upgrading as core directives. The institution expects that 1) automotive sales volume in 2026 may still be policy-driven, and 2) the intelligent transformation of the automotive industry (intelligent driving, humanoid robots) aligns well with the national focus on developing new quality productive forces.

**Pressure across the entire industry chain beta** The assessment is that recent pressure on passenger vehicles is mainly due to the sales decline in January-February caused by the Spring Festival and policy rollbacks, alongside margin pressure from increased costs of raw materials such as memory chips, batteries, aluminum, and copper since the start of the year. The possibility of trading price for volume in 2024 cannot be ruled out. Short-term focus should be on automakers' pricing strategies, order intake in March, April auto shows, and the realization of financial results.

**High-level intelligent driving may approach commercialization inflection point; humanoid robots await catalysts** *Intelligent Driving*: 1) Intelligent driving is expected to have become one aspect of competition in passenger vehicle configuration, with continued optimism regarding opportunities for increased shipments of related components driven by rising L2+ penetration. 2) Commercialization of L3 and higher autonomous driving levels may accelerate in 2026, creating opportunities for volume growth in components like hands-off/eyes-off detection and alerts, and Data Storage Systems for Conditionally Automated Driving (DSSAD). Related testing institutions are also expected to benefit. 3) Monitor the application of L4 unmanned mining trucks and unmanned logistics vehicles in commercial scenarios. *Humanoid Robots*: Companies like Unitree made impressive appearances during the Spring Festival Gala. Tesla and XPeng have indicated plans for mass production in 2026. Humanoid robots are projected to remain a key investment theme in 2026, though short-term catalysts likely depend on the release of Tesla's V3 prototype. Focus areas include the domestic supply chain, iterations in domestic AI chips and algorithms, and breakthroughs in new technologies.

**AI power shortage may drive investment opportunities in the internal combustion engine industry chain** The synergy between AI computing and electricity demand is significantly elevating power generation requirements. Challenges such as supply-demand and infrastructure upgrade mismatches, coupled with the retirement of traditional power sources and unstable output from renewables like wind power, are expected to create volume expansion opportunities for gas turbines/internal combustion engines and SOFC fuel cells. Internal combustion engines, characterized by ample capacity and rapid delivery, present a favorable outlook for investment opportunities within their industry chain, driven by AI-related power deficits.

**Risk提示**: Policy fluctuations; Supply chain performance below expectations; Industry demand below expectations; Ramp-up progress below expectations.