According to statistics from iFind by Tonghuashun, as of July 21, 59 A-share listed auto parts companies have released semi-annual earnings forecasts (classified under Shenwan Industry Classification). Of these, 38 issued positive outlooks, including 27 forecasting increased profits, 6 with slight increases, and 5 turning losses into gains. In contrast, 21 companies are projecting decreased profits or losses. Overall, the auto parts sector is showing a clear polarization in H1 performance expectations.

Zhang Xiang, Secretary-General of the International Intelligent Transport Technology Association, told reporters, “Auto parts companies with strong brands and leading technologies tend to be more profitable, while those trapped in product homogeneity are facing significant operational challenges.”

Based on the upper limit of projected net profit growth, 20 of the 59 companies expect year-on-year increases of more than 100%. Many companies with strong H1 performances attribute their growth to the continued expansion of orders, driven by sustained momentum in the new energy vehicle (NEV) market.

For example, Xiangyang Changyuandonggu Industry Co., Ltd. forecasts net profit attributable to shareholders of RMB 155 million to RMB 180 million for the first half of the year, representing a year-on-year increase of 62.65% to 88.88%. The company stated that during the reporting period, demand from major commercial vehicle clients remained stable and positive, while the NEV market grew rapidly. Sales of hybrid engine cylinder blocks and heads increased steadily year-on-year, contributing to both revenue and profit growth.

Jiangsu Bojun Industrial Technology Co., Ltd. projects H1 net profit attributable to shareholders of RMB 341 million to RMB 387 million, up 47% to 67% year-on-year. The company reported ample orders and steady revenue growth during the reporting period. It also benefited from the booming NEV sector, with rapid growth in hybrid and pure electric vehicles driving demand for its modular NEV body components.

A review of announcements reveals that key drivers of rising order volumes include optimized product portfolios, improved technical capabilities, and expansion into overseas markets.

Zhang Xiaorong, Director of the Institute of Deep Technology, noted that the automotive industry is moving toward electrification, intelligence, and lightweight design. This trend will push auto parts companies to focus on three key areas: high-precision electric motor control systems, integrated smart driving sensors and algorithms, and applications of new materials such as carbon fiber.

However, some companies are under performance pressure due to intensifying competition in the auto industry and ongoing “price wars.”

Zhang Xiaorong remarked, “The performance divergence among auto parts companies is an inevitable outcome of the rapid rise of NEVs. As NEV penetration increases, the demand across the parts supply chain surges. Companies with leading technologies and partnerships with top-tier automakers are the first to benefit. In contrast, those tied to the shrinking internal combustion engine market are seeing order declines.”

He added that the polarization within the auto parts industry will likely intensify, with technological iteration capabilities and market responsiveness becoming critical differentiation.

For companies facing performance pressure, Zhang suggests accelerating transformation efforts, optimizing product structures, and transitioning more aggressively toward the NEV sector. Simultaneously, they should focus on reducing costs and improving efficiency, enhancing gross margins through process improvements. Expanding their international client base and leveraging domestic supply chain advantages to participate in global competition are also key strategies.

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