The big picture -1
The view at ground level -1
Initiate coverage -1
Why read this report? 2
Intelligent Connected Vehicles and 5G 4
Executive summary 5
At the forefront of China’s technological transformation 5
Software spending is set to increase 6
Smart cockpits and high-definition (HD) maps 6
Promising outlook for intelligent road networks 7
Initiate coverage on three companies 8
Thunder Software (300496 CH, CMP RMB98.46, Buy, TP RMB128.00) 9
TransInfo Technology (002373 CH, CMP RMB18.12, Buy, TP: RMB29) 10
NavInfo (002405 CH, CMP RMB14.70, Hold, TP: RMB16) 11
How we are different from market expectations 11
Sector catalysts and downside risks 12
Potential sector catalysts 12
Sector downside risks 13
Environmental, social and governance 13
Environmental protection 13
Social responsibility 13
Corporate governance 14
Valuation and risks 19
Policy support the key 20
The ICV ecosystem and related policies 20
China’s ICV industry: empowered by 5G-based C-V2X 22
ICV a key enabler of autonomous driving 25
CVIS likely to be the mainstream autonomous driving technology path 26
Infrastructure boost to benefit intelligent road networks 26
All systems go 28
Acceleration of intelligent vehicle innovation, with the proportion of investment in software increasing 28
Commercialisation of smart cockpits and HD maps is underway 29
HD maps for automated driving 31
Company section 34
Thunder Software (300496 CH) 35
Platform software player benefits from intelligent Internet growth 35
Shareholding structure 35
Business outlook 36
Harvest season for the smart vehicle business 36
5G development benefits smart software and IoT business 38
5G to drive smart software business to a new growth cycle 38
The benefits of co-operating with Qualcomm 40
Earnings forecasts 40
Smart vehicle business 40
Smart IoT business 41
Smart software business 41
Valuation and risks 44
Initiate coverage with a Buy rating and a TP of RMB128 44
Potential share price catalysts 45
Key downside risks 45
TransInfo Technology (002373 CH) 47
Main beneficiary of smart road network construction 47
Shareholding structure 47
Business outlook 48
The next stage of road intelligence; room for informatisation investment to rise 48
Xueliang Project and overseas expansion to boost earnings of subsidiary Uniview 50
Business synergies from the investment by Alibaba 51
Earnings forecasts 52
Smart transport 52
Smart IoT 52
We are below consensus 53
Valuation and risks 54
Initiate coverage with a Buy rating and a TP of RMB29 54
Potential share price catalysts 55
Key downside risks 55
NavInfo (002405 CH) 57
All roads lead to intelligent connected vehicles 57
Shareholding structure 58
Business outlook 59
Recovery in passenger vehicle sales positive for navigation and auto chip businesses 59
AutoChips: An important acquisition 59
The connected commercial vehicle business 60
Bullish on HD map business over the long term 61
Earnings estimates 61
Expense ratios 63
We are below consensus 63
Valuation and risks 64
Initiate coverage with a Hold rating and a target price of RMB16 64
Chip business 64
Non-chip business 65
Key upside risks: 66
Key downside risks 66
Disclosure appendix 68
Analyst Certification 68
Important disclosures 68
Equities: Stock ratings and basis for financial analysis 68
From 23rd March 2015 HSBC has assigned ratings on the following basis: 68
Prior to this date, HSBC’s rating structure was applied on the following basis: 68
Rating distribution for long-term investment opportunities 69
As of 15 December 2020, the distribution of all independent ratings published by HSBC is as follows: 69
HSBC & Analyst disclosures 69
Additional disclosures 70
Production & distribution disclosures 70
Disclaimer 71
The big picture -1
The view at ground level -1
Initiate coverage -1
Why read this report? 2
Intelligent Connected Vehicles and 5G 4
Executive summary 5
At the forefront of China鈥檚 technological transformation 5
Software spending is set to increase 6
Smart cockpits and high-definition (HD) maps 6
Promising outlook for intelligent road networks 7
Initiate coverage on three companies 8
Thunder Software (300496 CH, CMP RMB98.46, Buy, TP RMB128.00) 9
TransInfo Technology (002373 CH, CMP RMB18.12, Buy, TP: RMB29) 10
NavInfo (002405 CH, CMP RMB14.70, Hold, TP: RMB16) 11
How we are different from market expectations 11
Sector catalysts and downside risks 12
Potential sector catalysts 12
Sector downside risks 13
Environmental, social and governance 13
Environmental protection 13
Social responsibility 13
Corporate governance 14
Valuation and risks 19
Policy support the key 20
The ICV ecosystem and related policies 20
China鈥檚 ICV industry: empowered by 5G-based C-V2X 22
ICV a key enabler of autonomous driving 25
CVIS likely to be the mainstream autonomous driving technology path 26
Infrastructure boost to benefit intelligent road networks 26
All systems go 28
Acceleration of intelligent vehicle innovation, with the proportion of investment in software increasing 28
Commercialisation of smart cockpits and HD maps is underway 29
HD maps for automated driving 31
Company section 34
Thunder Software (300496 CH) 35
Platform software player benefits from intelligent Internet growth 35
Shareholding structure 35
Business outlook 36
Harvest season for the smart vehicle business 36
5G development benefits smart software and IoT business 38
5G to drive smart software business to a new growth cycle 38
The benefits of co-operating with Qualcomm 40
Earnings forecasts 40
Smart vehicle business 40
Smart IoT business 41
Smart software business 41
Valuation and risks 44
Initiate coverage with a Buy rating and a TP of RMB128 44
Potential share price catalysts 45
Key downside risks 45
TransInfo Technology (002373 CH) 47
Main beneficiary of smart road network construction 47
Shareholding structure 47
Business outlook 48
The next stage of road intelligence; room for informatisation investment to rise 48
Xueliang Project and overseas expansion to boost earnings of subsidiary Uniview 50
Business synergies from the investment by Alibaba 51
Earnings forecasts 52
Smart transport 52
Smart IoT 52
We are below consensus 53
Valuation and risks 54
Initiate coverage with a Buy rating and a TP of RMB29 54
Potential share price catalysts 55
Key downside risks 55
NavInfo (002405 CH) 57
All roads lead to intelligent connected vehicles 57
Shareholding structure 58
Business outlook 59
Recovery in passenger vehicle sales positive for navigation and auto chip businesses 59
AutoChips: An important acquisition 59
The connected commercial vehicle business 60
Bullish on HD map business over the long term 61
Earnings estimates 61
Expense ratios 63
We are below consensus 63
Valuation and risks 64
Initiate coverage with a Hold rating and a target price of RMB16 64
Chip business 64
Non-chip business 65
Key upside risks: 66
Key downside risks 66
Disclosure appendix 68
Analyst Certification 68
Important disclosures 68
Equities: Stock ratings and basis for financial analysis 68
From 23rd March 2015 HSBC has assigned ratings on the following basis: 68
Prior to this date, HSBC鈥檚 rating structure was applied on the following basis: 68
Rating distribution for long-term investment opportunities 69
As of 15 December 2020, the distribution of all independent ratings published by HSBC is as follows: 69
HSBC & Analyst disclosures 69
Additional disclosures 70
Production & distribution disclosures 70
Disclaimer 71 (as-gbk-encoding)

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2025-01-15