Auto Industry Expected to Warm Up in Late August, Gradually Transitioning to Peak Season
On the afternoon of August 7, Hong Kong's three major stock indexes rose collectively. On the trading floor, stocks from the tech sector fluctuated, with Apple-concept stocks leading the way, innovative drug concepts pulling back, and new consumer concept stocks diverging. Pajer, an ETF tracking Hong Kong-listed stocks with high levels of automation, saw a sharp drop in holdings, with top performers including Jingdong Electric, Tianzi Lithium Industry, East Wind Group, Jinfeng Permanent Magnet, Shunyu Optical Technology, and Ganfeng Lithium Industry. By contrast, Ideal Automobile, Earthline Robotics, and Yihua Electronics fell sharply.
On the news front, on August 6, XPeng Motors held a launch event for its new P7 model in Beijing, marking the car's debut in China and simultaneous start of pre-orders. Three models were unveiled, including versions with ranges of 702km, 820km, and 750km. On August 7, the new XPeng P7 exhibition cars went live across the country at all 228 stores.
Recall Securities noted that according to data from the China Association of Automobile Manufacturers (CAAM), July's sales were characterized by a clear slowdown, partly due to the previous month's surge in sales and partly due to regional subsidies being temporarily suspended. However, last week's central government allocation of 680 billion yuan in the third batch of national support funds suggests that the market may warm up in late August, gradually transitioning into peak season. As for investment strategies for the automotive industry chain, this institution is optimistic about the sector's growth momentum in the second half and believes that companies with good mid-year expectations include:
- a) Geely Automobile: expects strong sales and performance in the second half, with a positive earnings forecast; currently undervalued;
- b) XPeng Motors: will soon launch its new-generation XPeng P7 model, expanding its product lineup;
- c) Ideal Automobile: after adjusting its i8 sales strategy, it may accelerate order conversions and the listing of its i6 model in September;
- d) Xiaomi Automobile, Zero-run: new car models will drive growth momentum in the second half, with strong terminal demand.