HSBC Research Remains Positive on BYD COMPANY and GWMOTOR's Ability to Withstand Significant Raw Material Price Increases
Cost Pressure on Chinese Automakers: HSBC Global Research predicts that rising raw material prices, particularly for metals and memory, will significantly increase production costs for Chinese automakers, especially electric vehicle manufacturers.
Impact of Raw Material Prices: The surge in lithium prices and other materials could raise vehicle costs by RMB3,000-5,000, with additional increases from memory prices potentially adding RMB1,000-3,000.
Stock Resilience: HSBC identifies BYD COMPANY and GWMOTOR as relatively resilient to rising costs, while FUYAO GLASS is expected to be less affected by increased material prices.
Target Prices for Stocks: The target prices set for BYD COMPANY, GWMOTOR, and FUYAO GLASS are HKD139, HKD21.6, and HKD91.2, respectively, with all three stocks rated as Buy.
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JPM Cuts LI AUTO-W Rating to Underweight; Recommends GEELY AUTO and SINOTRUK as Top Choices
Market Outlook: JP Morgan predicts the Chinese automobile market will experience a mixed performance in 2023, with potential negative growth similar to 2018, but also volatility driven by new model releases and seasonal trends akin to 2025.
Top Picks: The broker's top stock picks include GEELY AUTO and SINOTRUK, while they see potential in BYD COMPANY, LEAPMOTOR, XPENG-W, and NIO for future positioning.
Investment Ratings: JP Morgan has assigned various investment ratings and target prices for several automobile stocks, with BYD COMPANY and SINOTRUK rated as "Overweight," while LI AUTO-W has been downgraded to "Underweight."
Short Selling Data: The report includes short selling data for the stocks mentioned, indicating varying levels of market sentiment and potential risks associated with each stock.
<Research>CLSA: Rising Costs Squeeze Automaker Profits; BYD and Leapmotor More Resilient to Pressure
Impact of Commodity Prices: Rising commodity prices are creating challenges for automakers, potentially leading to industry consolidation and adjustments in pricing strategies, as highlighted by CLSA's research report.
Cost Increases: Raw material costs are expected to raise the average cost per vehicle by approximately RMB3,000, driven by increases in lithium carbonate, memory chips, and non-ferrous metals.
Vertical Integration Advantage: Automakers with higher vertical integration, like BYD, or those with significant external auto part sales, such as LEAPMOTOR, are better positioned to manage the cost pressures from rising raw material prices.
EV Market Dynamics: Geely Auto is emerging as a strong competitor in the electric vehicle sector, while the Chinese automotive industry is undergoing consolidation, with market share increasingly concentrated among tier 1 OEMs.
Canadian Industry Minister Promotes Joint Venture for Car Plant Establishment with CN
Canada's Joint Ventures with China: Canadian Industry Minister Melanie Joly announced plans to promote joint venture automotive plants with China for electric vehicle production aimed at global export.
Collaboration Opportunities: Canadian auto parts companies can partner with Chinese EV manufacturers to create assembly plants in Canada, ensuring compliance with safety regulations and labor standards while developing a local supply chain.
BYD Anticipates Limited Production of Sulfide-based Solid-State Batteries by 2027: Reports Suggest
BYD's Solid-State Battery Strategy: BYD is focusing on a multi-path exploration strategy for solid-state batteries, particularly sulfide-based technology, with breakthroughs in battery life and fast charging expected to lead to small-scale production by 2027.
Future Plans for All-Solid-State Batteries: The company plans to begin demonstration vehicle applications for all-solid-state batteries in batches around 2027, aiming for large-scale commercial applications post-2030.
HSI Starts 422 Points Up; HSBC HOLDINGS Gains 3%; Strong Performance in Chips and Commodities
Market Performance: The HSI opened 1.6% higher at 26,982, with significant gains in the HSCEI and HSTECH, reflecting a positive trend in the Hong Kong stock market.
Tech Sector Highlights: Major tech stocks like TENCENT and JD-SW saw increases, while KUAISHOU-W experienced a decline; overall, tech stocks showed a mixed performance with varying short selling ratios.
Automotive and Commodity Stocks: BYD COMPANY and other automotive stocks like NIO-SW and XPENG-W reported gains, alongside a rebound in commodity prices benefiting gold and mining stocks.
Financial Sector Gains: Financial stocks, including HSBC HOLDINGS and HKEX, opened higher, indicating a positive sentiment in the financial market amidst broader market gains.
HSI Drops 325 Points or 1.2% as AIA Declines Over 5%; NIO-SW Rises Approximately 7%
Market Performance: The HSI fell 325 points (1.2%) to close at 26,559, with the HSCEI and HSTECH also experiencing declines of 0.7% and 1.1%, respectively, amid a total market turnover of $247.865 billion.
Financial Sector Decline: Major financial stocks like HSBC and AIA saw significant drops of 2.7% and 5.5%, respectively, with short selling ratios indicating increased bearish sentiment.
Volatile Commodities Market: The commodities sector faced volatility, with stocks like CHI SILVER GP and MMG declining over 3%, while jewelry stock LAOPU GOLD also lost 2.32%.
Automakers' Gains: In contrast, automakers such as BYD and NIO saw gains, with NIO rising 6.9% after announcing its first profit, while battery stock CATL increased by 1.8%.
JPM Cuts LI AUTO-W Rating to Underweight; Recommends GEELY AUTO and SINOTRUK as Top Choices
Market Outlook: JP Morgan predicts the Chinese automobile market will experience a mixed performance in 2023, with potential negative growth similar to 2018, but also volatility driven by new model releases and seasonal trends akin to 2025.
Top Picks: The broker's top stock picks include GEELY AUTO and SINOTRUK, while they see potential in BYD COMPANY, LEAPMOTOR, XPENG-W, and NIO for future positioning.
Investment Ratings: JP Morgan has assigned various investment ratings and target prices for several automobile stocks, with BYD COMPANY and SINOTRUK rated as "Overweight," while LI AUTO-W has been downgraded to "Underweight."
Short Selling Data: The report includes short selling data for the stocks mentioned, indicating varying levels of market sentiment and potential risks associated with each stock.
<Research>CLSA: Rising Costs Squeeze Automaker Profits; BYD and Leapmotor More Resilient to Pressure
Impact of Commodity Prices: Rising commodity prices are creating challenges for automakers, potentially leading to industry consolidation and adjustments in pricing strategies, as highlighted by CLSA's research report.
Cost Increases: Raw material costs are expected to raise the average cost per vehicle by approximately RMB3,000, driven by increases in lithium carbonate, memory chips, and non-ferrous metals.
Vertical Integration Advantage: Automakers with higher vertical integration, like BYD, or those with significant external auto part sales, such as LEAPMOTOR, are better positioned to manage the cost pressures from rising raw material prices.
EV Market Dynamics: Geely Auto is emerging as a strong competitor in the electric vehicle sector, while the Chinese automotive industry is undergoing consolidation, with market share increasingly concentrated among tier 1 OEMs.
Canadian Industry Minister Promotes Joint Venture for Car Plant Establishment with CN
Canada's Joint Ventures with China: Canadian Industry Minister Melanie Joly announced plans to promote joint venture automotive plants with China for electric vehicle production aimed at global export.
Collaboration Opportunities: Canadian auto parts companies can partner with Chinese EV manufacturers to create assembly plants in Canada, ensuring compliance with safety regulations and labor standards while developing a local supply chain.
BYD Anticipates Limited Production of Sulfide-based Solid-State Batteries by 2027: Reports Suggest
BYD's Solid-State Battery Strategy: BYD is focusing on a multi-path exploration strategy for solid-state batteries, particularly sulfide-based technology, with breakthroughs in battery life and fast charging expected to lead to small-scale production by 2027.
Future Plans for All-Solid-State Batteries: The company plans to begin demonstration vehicle applications for all-solid-state batteries in batches around 2027, aiming for large-scale commercial applications post-2030.
HSI Starts 422 Points Up; HSBC HOLDINGS Gains 3%; Strong Performance in Chips and Commodities
Market Performance: The HSI opened 1.6% higher at 26,982, with significant gains in the HSCEI and HSTECH, reflecting a positive trend in the Hong Kong stock market.
Tech Sector Highlights: Major tech stocks like TENCENT and JD-SW saw increases, while KUAISHOU-W experienced a decline; overall, tech stocks showed a mixed performance with varying short selling ratios.
Automotive and Commodity Stocks: BYD COMPANY and other automotive stocks like NIO-SW and XPENG-W reported gains, alongside a rebound in commodity prices benefiting gold and mining stocks.
Financial Sector Gains: Financial stocks, including HSBC HOLDINGS and HKEX, opened higher, indicating a positive sentiment in the financial market amidst broader market gains.
HSI Drops 325 Points or 1.2% as AIA Declines Over 5%; NIO-SW Rises Approximately 7%
Market Performance: The HSI fell 325 points (1.2%) to close at 26,559, with the HSCEI and HSTECH also experiencing declines of 0.7% and 1.1%, respectively, amid a total market turnover of $247.865 billion.
Financial Sector Decline: Major financial stocks like HSBC and AIA saw significant drops of 2.7% and 5.5%, respectively, with short selling ratios indicating increased bearish sentiment.
Volatile Commodities Market: The commodities sector faced volatility, with stocks like CHI SILVER GP and MMG declining over 3%, while jewelry stock LAOPU GOLD also lost 2.32%.
Automakers' Gains: In contrast, automakers such as BYD and NIO saw gains, with NIO rising 6.9% after announcing its first profit, while battery stock CATL increased by 1.8%.
