KaiYuan Securities: Huawei's QianKun Smart Driving System Promotes Upgrading of the Automotive Industry, Technical Ecosystem Takes Shape and Deeply Empowers

According to the Zhitong Finance APP, Kaiyuan Securities has released a research report stating that the automotive industry has entered a technological transformation cycle, with the value of software in the automotive industry continuously increasing. Huawei, with its strong capabilities, is deeply laying out its presence in the automotive market, aiming to create an intelligent open platform for the automotive industry. The upgrade of Huawei's QianKun ADS intelligent driving function has formed a technological ecosystem that deeply empowers and accelerates the evolution of the industry landscape. In 2024, 11 brand models from 8 automotive companies will be equipped with Huawei's QianKun intelligent driving system, and it is expected that by the end of 2024, over 500,000 vehicles will be equipped with Huawei's intelligent driving system.

The main points of Kaiyuan Securities are as follows:

Huawei's empowerment drives the upgrade of the automotive industry, aiming to build an intelligent open platform

The automotive industry has entered a technological transformation cycle, with the value of software in the automotive industry continuously increasing. Huawei, with its strong capabilities, is deeply laying out its presence in the automotive market, with the goal of creating an intelligent open platform for the automotive industry. The establishment of the Yingwang company has opened a new form of equity cooperation, further deepening collaboration with automotive companies on three major models, attracting partners to invest in equity, which is expected to alleviate the funding pressure on the automotive business unit (BU). Automotive companies investing in Yingwang are expected to gain more technological empowerment and greater long-term dividends, achieving a "mutual pursuit."

In the first half of 2024, benefiting from the hot sales of cooperative intelligent models, the net profit attributable to the parent company of the automotive BU reached 2.231 billion yuan, turning losses into profits; it is expected that total revenue in 2024 will reach 22.485 billion yuan. The independent and commercial operation of the Yingwang company is promising for customer development, and as the number of models equipped with products continues to increase, it is expected to accelerate the transformation of China's automotive industry.

QianKun ADS intelligent driving function upgrade, technological ecosystem formed for deep empowerment

QianKun intelligent driving includes two major solutions: ADS high version and ADS basic version.

In terms of functionality, ADS 3.0 can achieve intelligent driving navigation from parking space to parking space, while ADS 4.0 will be launched in 2025 for commercial L3-level autonomous driving on highways and pilot L3-level autonomous driving in urban areas, showcasing powerful high-end features; ADSSE can achieve intelligent driving navigation on highways and urban fast roads at a lower cost, promoting the popularization of intelligent driving to lower-priced models.

In terms of algorithms, the perception layer of ADS 3.0 uses the GOD network, and the decision-making and planning layer uses the PDP network to achieve this, while adding an instinctive safety network to enhance performance; ADSSE adopts the same source architecture as ADS 3.0. In terms of data, the cumulative intelligent driving mileage has exceeded 736 million kilometers, with a training data volume reaching 35 million kilometers per day.

In terms of computing power, as of October, the cloud learning training computing power of the HUAWEI ADS intelligent driving system has reached 7.5 EFLOPS. Huawei supports the rapid iteration of intelligent driving solutions through full-stack self-research and effective collaboration.

In terms of chips, Huawei currently has two intelligent driving chips, Ascend 310 and 610, which can support four platform products: MDC210/MDC300F/MDC610/MDC810. Models equipped with Huawei MDC610 can now upgrade to ADS 3.0.

In terms of hardware, Huawei has independently developed various sensors such as laser radar and 4D millimeter-wave radar, building a full-spectrum perception capability On the cloud level, Huawei provides a fully autonomous AI computing foundation with its Ascend artificial intelligence hardware and software as the computing power infrastructure.

Deeply empowering car manufacturers with intelligence, accelerating the evolution of the industry landscape

In 2024, 11 brand models from 8 car manufacturers will be equipped with Huawei's QianKun intelligent driving system, including four major brands under HarmonyOS Smart Travel: Aito, Zhijie, Xiangjie, and Zunjie, as well as brands like Voyah, Mengshi Technology, Changan Deep Blue, Avita, and BAIC Jihe under the HI model. Additionally, brands like GAC Trumpchi and BYD Fangchengbao will engage in flexible cooperation with Huawei. It is expected that by the end of 2024, over 500,000 vehicles will be equipped with Huawei's intelligent driving system.

Recommended and Benefiting Targets:

Recommended: Changan Automobile (000625.SZ), BYD (002594.SZ), Huayang Group (002906.SZ), Joyson Electronics (600699.SH), Huguang Co., Ltd. (605333.SH), Top Group (601689.SH), Ruihu Mould (002997.SZ), Sulian Co., Ltd. (301397.SZ), Zhejiang Xiantong (603239.SH);

Benefiting Targets: Seres (601127.SH), BAIC Blue Valley (600733.SH), Jianghuai Automobile (600418.SH), GAC Group (601238.SH), Bertley (603596.SH), Shanghai Yanpu (605128.SH), Huayi Technology (688071.SH), Xingyu Co., Ltd. (601799.SH), Guangfeng Technology (688007.SH), Wencan Co., Ltd. (603348.SH), Baolong Technology (603197.SH), Bojun Technology (300926.SZ), Mingxin Xuteng (605068.SH), Asia-Pacific Co., Ltd. (002284.SZ), Zhongding Co., Ltd. (000887.SZ), Shangsheng Electronics (688533.SH).

Risk Warning: Technology development progress may be less than expected, market demand may be less than expected, and policy advancement may be less than expected