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| HSCEI1 | 8,103.08 | +37.11 | 91.77B |
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2026-07-14 12:13:50 JPMorgan released a research report foreseeing no meaningful recovery in mainland China's auto market demand in 2H26, in wake of weak consumer confidence. As such, the broker believed that even if further policy stimulus measures are introduced in 2H26, their effectiveness may still be limited. After domestic passenger vehicle demand fell 23% YoY in 1H26, the broker expected demand in 2H26 to remain below or near seasonal levels, although the YoY shrinkage was forecast to narrow to around 10%. Automakers with competitive NEV models, such as BYD COMPANY (01211.HK), XPENG-W (09868.HK) and LEAPMOTOR (09863.HK), were predicted to be more resilient against domestic headwinds than peers. These companies may see positive share price reactions if they launch new models in 2H26 or sustain follow-on sales momentum. In overseas markets, the situation is completely opposite and highly positive. The broker foresaw that overseas sales targets set by all major Chinese automakers are too conservative, with actual performance potentially beating expectations by around 20-50%. Overseas markets were expected to account for 30-50% of revenue for major automakers in 2026. Following recent earnings forecast revisions, the broker downgraded both SAIC MOTOR (600104.SH) and GAC GROUP (02238.HK) from Neutral to Underweight, citing their feeble performance will continue. Meanwhile, the broker raised forecasts for NIO-SW (09866.HK) and maintained its Overweight rating, expecting NIO-SW's 2Q26 results to beat, while GEELY AUTO (00175.HK) is also likely to deliver better-than-expected performance. The broker's top picks for 2H26 in pecking order are GEELY AUTO, NIO-SW and BYD COMPANY. JPMorgan adjusted target prices and ratings for multiple auto stocks: BYD COMPANY (01211.HK) was maintained at Overweight with TP unchanged at HKD124 GEELY AUTO (00175.HK) was maintained at Overweight with TP unchanged at HKD29 XPENG-W (09868.HK) was maintained at Overweight with TP lowered from HKD118 to HKD108 NIO Inc. (NIO.US) was maintained at Overweight with TP unchanged at USD7 LI AUTO-W (02015.HK) was maintained at Underweight with TP lowered from HKD56 to HKD38 LEAPMOTOR (09863.HK) was maintained at Overweight with TP lowered from HKD90 to HKD60 GWMOTOR (02333.HK) was maintained at Neutral with TP lowered from HKD11.5 to HKD8.5 GAC GROUP (02238.HK) was downgraded from Neutral to Underweight with TP lowered from HKD3.3 to HKD1.1 BAIC MOTOR (01958.HK) was maintained at Neutral with TP lowered from HKD1.6 to HKD0.8 CHANGAN AUTOMOBILE (000625.SZ) was maintained at Underweight with TP lowered from RMB6.6 to RMB4.5 ~ AASTOCKS Financial News Website: www.aastocks.com | |