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2026-10-02 15:20:40 Wholesale data released by Chinese automakers for Sep 2026 showed the overall market remained feeble, with domestic demand and orders during the traditional peak falling short of expectations and no seasonal sales pickup seen, Nomura said in a report. Based on preliminary CPCA data, the broker expected Sep domestic market sales to decline by more than 25% YoY, potentially marking the steepest YoY drop so far in 2026. After four years of intense competition, coupled with tighter policy conditions, China's auto market is facing double whammy of oversupply and weak demand. Since 2026, the industry has entered an elimination phase in which only companies pursuing high-quality development can survive. As demand weakens, automakers need to shift focus from volume growth to business quality, with efficiency improvement becoming critical. Recent developments, including GAC GROUP (02238.HK) replacing FAW in taking a stake in the FAW Toyota joint venture, cooperation between GEELY AUTO (00175.HK) and NIO-SW (09866.HK) in battery swapping and charging businesses, CHANGAN AUTOMOBILE (000625.SZ) integrating backend operations of Avatr and Deepal, and XPENG-W (09868.HK) merging product lines, indicate that trends of industry resource integration and corporate cooperation are beginning to emerge. For individual stocks, supported by overseas sales, BYD COMPANY (01211.HK) reported Sep passenger vehicle sales of 457,000 units, up 16.2% YoY and 5.4% MoM. The broker believed domestic market conditions are unlikely to improve materially in the short term, while Blade Battery capacity ramp-up is expected to continue throughout 2026. BYD COMPANY will continue allocating resources overseas, and progress toward its overseas sales target of more than 1.9 million vehicles in 2026 is on track. The rating was Buy with of TP HKD127. XPeng Inc. (XPEV.US) delivered 41,300 vehicles in Sep, down 0.8% YoY but up 5.5% MoM. 3Q26 deliveries reached 118,000 units, in line with the midpoint of guidance. The broker assigned a Buy rating to the ADR with a TP of USD23. NIO Inc. (NIO.US) delivered 37,400 vehicles in Sep, up 7.7% YoY and 4.4% MoM. 3Q26 deliveries totaled 109,000 units, at the upper end of guidance. The broker assigned a Buy rating to the ADR with a TP of USD8.60. LI AUTO-W (02015.HK) delivered 31,800 vehicles in Sep, down 6.3% YoY and 15.6% MoM. 3Q26 deliveries reached 100,000 units, meeting the upper end of guidance. The broker maintained a cautious stance and assigned a Neutral rating to Li Auto Inc. (LI.US) ADR with a TP of USD20. XIAOMI-W (01810.HK) delivered more than 40,000 vehicles in Sep, broadly flat YoY and up more than 30% MoM. The rating was Neutral with a TP of HKD33. ~ AASTOCKS Financial News Website: www.aastocks.com | |