On November 4th, the A-share new energy vehicle sector was strong, with multiple stocks experiencing a surge of daily limit up.

As of the deadline for this report, Wangcheng Technology surged by 30CM, ningbo henghe precision and Ready Drive surged by 20CM, and nearly 40 stocks such as Zotye Automobile, CINNO Research, Jiangsu Nanfang Precision, and Guang Dong Hua Feng New Energy Technology hit the daily limit up.

In the Hong Kong stock market, both the automobile and new energy vehicle sectors showed strength. As of the deadline for this report, Xiaopeng Motors and Brilliance China rose by over 5%, Geely Auto, BYD Company Limited, Li Auto Inc, Leapmotor, Great Wall Motor rose by over 4%.

The performance in the real estate sector in the Chinese lunar calendar's tenth month has been outstanding.

As October comes to an end, many new energy vehicle companies have revealed their latest monthly sales performance.

Front-runner BYD once again takes the lead. In October, BYD's new energy vehicle sales reached a high of 0.5027 million vehicles, a staggering 66.5% year-on-year increase, becoming the first Chinese new energy vehicle company to exceed 0.5 million monthly sales.

Xiaomi Auto also performed well in October, with a monthly delivery volume exceeding 0.02 million vehicles for the first time. Xiaomi Auto expects to achieve its goal of delivering 0.1 million vehicles for the full year of 2024 in November. Ideal Auto has been progressing rapidly, surpassing 0.05 million vehicles in October with a delivery of 51,443 vehicles, a 27.3% year-on-year increase. Its historical cumulative delivery volume has reached 1.0266 million vehicles, making it the first new force vehicle company to deliver over a million vehicles.

Leapmotor delivered 0.0382 million vehicles in October, a 109.7% year-on-year growth, continuously setting new monthly delivery records. Chongqing Sokon also performed outstandingly, with sales reaching 36,011 vehicles in October, a 104.61% year-on-year increase. In addition, Xpeng, NIO, and Zeekr all delivered over 0.02 million vehicles.

CAAM previously pointed out that during the National Day holiday in October, the passenger vehicle market's heat significantly increased. Although there was some decline after the holiday, the overall automotive market continued to maintain a positive recovery trend. The effect of local stimulus policies for trading in old vehicles for new ones is gradually appearing in the market. Scrap renewal policies continue to be implemented steadily, greatly boosting the growth of the automotive market.

Preliminary estimates indicate that the narrow passenger vehicle retail market size in October is around 2.2 million vehicles, an 8.2% year-on-year increase from last year, a 4.3% increase compared to the previous month. New energy retail sales are expected to reach 1.15 million, with a penetration rate of approximately 52.3%.

While achieving record monthly sales volumes, the third-quarter performance of car companies is also equally encouraging.

BYD's third-quarter revenue exceeded Tesla for the first time, at 201.1 billion yuan, a 24.04% year-on-year increase; net income was 11.607 billion yuan, a 11.47% year-on-year increase.

In the third quarter, Ideal Auto's revenue reached 42.9 billion yuan, a year-on-year increase of 23.6%; net income was 2.8 billion yuan, a year-on-year growth of 0.3%.

Chongqing Sokon Industry Group Stock's revenue in the third quarter was 41.582 billion yuan, a year-on-year increase of 636.25%; the net income was 2.413 billion yuan, achieving a turnaround.

Institutions: Focus on accelerated release of demand in the fourth quarter.

Behind the remarkable performance of electric vehicle companies is the strong support of government policies.

In May of this year, the State Council issued the 'Energy Saving and Carbon Reduction Action Plan for 2024-2025', which proposes gradually lifting restrictions on the purchase of new energy vehicles in various regions, implementing supportive policies such as facilitating the passage of new energy vehicles. On July 25, the National Development and Reform Commission and the Ministry of Finance issued 'Several Measures to Vigorously Support Large-scale Equipment Renewal and Consumption Upgrade', promoting the trade-in of old for new in new energy vehicles, including subsidies for old operating trucks, new energy buses, and power batteries.

Against this background, the development of the new energy vehicle industry is accelerating, and the construction of charging stations, an important supporting facility, has also made significant progress.

The latest statistical data from the National Energy Administration shows that as of the end of September 2024, the total number of electric vehicle charging facilities in China has reached 11.433 million units, a year-on-year increase of 49.6%. From January to September this year, the increment of electric vehicle charging facilities in China was 2.837 million units, with an average monthly increase of 0.315 million units.

Looking ahead, with more supportive policies being introduced one after another, the continued strong growth trend in automobile sales, and the continuous improvement of supporting facilities, the new energy vehicle market is expected to usher in vigorous development.

Fangzheng Securities pointed out that attention should be paid to the acceleration of demand release in the fourth quarter, and it is expected that next year's policies will continue to layout the annual transition. Benefiting from subsidies for consumption at the provincial, municipal, and district levels + scrappage subsidies for replacing old vehicles, subsidies for single vehicles can reach 0.025 million yuan, plus a potential stimulus effect on automobile consumption from the 50BP reduction in existing home mortgage rates, making the Golden September and Silver October vibrant. Subsequently, with bottom catalysis, the automotive sector will start to recover and move upward, with a focus on domestic substitution, luxury cars, going global, autonomous driving, and oversold components.

Pacific Securities stated that the new energy vehicle industry has experienced a 3-year downturn cycle and has now entered a major bottoming phase. The industry's overall unit profitability is at a historical low, capital expenditure has been significantly reduced, and production capacity is beginning to be cleared. These phenomena all indicate that the current electric vehicle industry chain has reached a critical layout period at the bottom. Looking ahead to the new cycle, intelligentization is the core driving force for product enhancement in electric vehicles, new technologies are expected to reshape the competitive landscape, overseas market expansion will open up new upward space, bullish on the opportunities brought by the big bottom in the midstream and the start of a new cycle downstream.