This photo taken on July 3, 2023 shows China's 20 millionth new energy vehicle (NEV) produced by GAC Aion New Energy Automobile Co., Ltd. in Guangzhou, south China's Guangdong Province. (Xinhua/Deng Hua)
BEIJING, Dec. 21 (Xinhua) -- China's new energy vehicle (NEV) sector has turbocharged growth in recent years, with listed companies related with the industrial chain gaining close attention from investment institutions.
A number of listed companies in the new energy industrial chain received increased holdings from public funds, social security funds, foreign investment and other sorts of institutions since the fourth quarter, whereas companies have also been involved in the establishment of industrial funds to invest in projects related to intelligent connected NEVs.
-- Listed companies involved in establishing industrial funds
Guangzhou Automobile Group Co., Ltd. (GAC Group), Bank of China and Guangzhou Industrial Investment and Capital Operation Holding Group Ltd. recently agreed to co-establish a new investment fund for major projects of intelligent connected NEV industrial chain's upstream and downstream businesses. The new fund is expected to eventually reach a total scale of 30 billion yuan (about 4.2 billion U.S. dollars), with an initial scale of 10 billion yuan.
GAC Group made the announcement on its participation in establishing a fund of this kind back in November, stating that through investing in projects along the intelligent connected NEV industrial chain, the company was set to build a comprehensive supply chain system that features both industry implementation and forward-looking technological empowerment, supporting the transformation and upgrading of traditional sectors towards the future.
Huizhou Desay SV Automotive Co., Ltd. (Desay SV) has also announced to invest in the establishment of two industrial funds last month, with a scale of 300 million yuan each. Both funds are to better strengthen the company's influence in its existing business fields and improve the capabilities of development and layout in the intelligent connected vehicle (ICV) industry.
As the ICV industry is currently in a period of rapid development, it is important to keep up with the industry development trends by deeply interacting with the leading enterprises in technology and business in the industrial chain, according to Desay SV. It is necessary to allocate an appropriate amount of self-owned funds to participate in the investment of industrial funds, which helps expand the company's main business while promoting the formation of an ICV industry ecosystem, said Desay SV.
-- Investment institutions increase holdings intensively
Since the fourth quarter of this year, long-term capital such as public funds, foreign capital, social security funds and insurance funds have also been intensively increasing their holdings of listed companies in the NEV industry chain.
On November 13, Zhejiang Sanhua Intelligent Controls Co, Ltd., a company producing air conditioning control components that are widely used in NEVs, disclosed its shareholdings situation. As of November 6, 21.08 million shares of the company was held by China Life Insurance Co., one of China's biggest insurers, an increase of 6.25 million shares compared with the end of the third quarter of 2023.
In addition, China's national social security fund 104 portfolio newly acquired 20.75 million shares of the company in the fourth quarter, whereas Hong Kong Securities Clearing Company Limited and Kuwait Investment Authority each increased their holdings by 1.57 million and 1.58 million shares respectively.
As of October 27, national social security fund 17022 portfolio held 10.11 million shares of JL MAG Rare-Earth Co., Ltd. (JL MAG), an increase of 1.11 million shares compared with the end of the third quarter. JL MAG is a high-tech enterprise producing high-performance neodymium-iron-boron (NdFeB) permanent magnets materials, which are widely used in wind power generation, NEVs and automotive parts. The company's products have been adopted by the world's top ten NEV manufacturers.
-- Institutions optimistic about industry development
Data from the China Association of Automobile Manufacturers showed that China's vehicle production and sales rose 29.4 percent and 27.4 percent year on year in November, reaching 3.09 million and 2.97 million units, respectively. Among them, production and sales of NEVs hit 1.07 million and 1.03 million units, respectively, up 39.2 percent and 30 percent year on year.
The retail penetration rate of NEVs reached 40.4 percent in November domestically, up 4 percentage points over the same period last year, exceeding 40 percent for the first time, according to data from the China Passenger Car Association. This means that for every 10 cars that are sold in China, four are NEVs.
With strong support of national policies and increasing market demand, China's NEV industry has been developing rapidly in recent years, with the scale of production and sales growing significantly. A domestic consulting agency pointed out that with the steady advancement of the trend towards ICVs, varying degrees of transformation are seen in multiple systems of automobiles, including the power system, electronic and electrical structure, intelligent driving system, entertainment system and so on, driving the development of multiple sectors in the industrial chain.
After years of development, the irreversible trend of new energy has been formed. Intelligent vehicles will be the second half of the revolution of automobile industry. The level of intelligence has become another important factor for consumers to consider when purchasing electric vehicles, according to Hwabao Securities.
The combination of macro policies and the accelerated application of new technologies such as fast charging and intelligent driving will catalyze the rapid growth of NEV sales, as well as global demand for power batteries. It is expected that domestic enterprises will further increase their global market share with their technological and industrial cost advantages, according to Dongguan Securities. (Edited by Yu Huichen with Xinhua Silk Road, yuhuichen@xinhua.org)
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