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2026-10-26 18:59:16 Goldman Sachs published a research report previewing 3Q26 results for the China mobility technology ADR companies under its coverage. Overall, automakers and suppliers are facing sales pressure from weakening domestic demand. NEV retail sales in September fell 16% YoY, compared with declines of 3% YoY and 10% YoY in July and August, respectively. Coupled with higher costs arising from the battery consumption tax effective from Sep 1, 2026 and the reduction in EV export tax rebates effective from Apr 1, 2027, the broker lowered its earnings forecasts and cut the 12-month target prices of the ADR companies under preview by 7% to 12%. The broker also revised its industry model to reflect weaker domestic sales and stronger export trends. The broker noted that most automakers and suppliers in the third quarter were dragged down by continued weakening domestic demand, while certain companies benefited from the launch of new technologies or products, recording sales growth and market share expansion. In terms of sales volume, NIO-SW (09866.HK) and BYD COMPANY (01211.HK) posted YoY growth of 26% and 19%, respectively, benefiting from deliveries of competitive new models. LI AUTO-W (02015.HK) and XPENG-W (09868.HK) recorded YoY growth of 7% and 2%, respectively. The broker also revised its 2026-2030 passenger vehicle retail demand forecasts, lowering them by 12% to flat, while export demand forecasts were raised by 30% to 31%. Wholesale sales volume forecasts were adjusted from flat to a 10% increase. It now expects passenger vehicle retail sales to fall 20% YoY in 2026 and rise 2% YoY in 2027, while exports are expected to increase 70% YoY and 10% YoY, respectively. Wholesale sales are forecast to decline 1% YoY in 2026 and rise 5% YoY in 2027. For individual stocks, the broker expects BYD Company's third-quarter gross margin to improve 2.2 ppts YoY to 19.8%, while EBIT and net profit are forecast to rise 134% and 47% YoY, respectively. The stock is rated "Buy" (Conviction List Buy). The 12-month TP for BYD Company (002594.SZ) A shares is RMB137, while the H-share TP is HKD134. Benefiting from the ES8 and ES9 models, NIO is expected to post YoY growth of 91% and 102% in EBIT and non-GAAP net profit, respectively. The stock is rated "Buy". The TP for NIO Inc. (NIO.US) ADR/H shares was lowered from USD6.1/HKD48 to USD5.6/HKD44. XPeng is expected to see gross margin decline to 18.8%, while EBIT and non-GAAP net profit are forecast to drop 28% and 396% YoY, respectively. The stock is rated "Buy". The TP for XPeng Inc. (XPEV.US) ADR/H shares was lowered from USD18/HKD69 to USD16/HKD61. Li Auto is expected to record declines of 36% and 92% YoY in EBIT and non-GAAP net profit, respectively. The stock is rated "Neutral". The TP for Li Auto Inc. (LI.US) ADR/H shares was lowered from USD14.2/HKD55 to USD13/HKD51. HESAI-W (02525.HK) is expected to report a 28% increase in third-quarter revenue, but EBIT and non-GAAP net profit are forecast to decline 43% and 60% YoY, respectively. The stock is rated "Buy". The TP for Hesai Group (HSAI.US) ADR was lowered from USD31 to USD28, while the H-share TP was cut from HKD30 to HKD27.(ad/u)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |