Hong Kong auto stocks are slowly heading towards spring.

The national 'old-for-new' policy subsidies driving the peak consumption season in 'Golden September and Silver October', helping the industry fundamentals to continue to improve. In October, the sales of new energy vehicles surpassed the historical peak, providing strong support for auto stocks.

Data from the China Passenger Car Association shows that in October 2024, wholesale sales of new energy passenger vehicles reached 1.37 million vehicles, surpassing the historical peak. Due to the Spring Festival factors and price disruptions, there was a significant decline in February. Market growth gradually recovered from March to August, with a huge month-on-month growth driven by policy subsidies in September and October, continuously breaking monthly historical highs.

Several Hong Kong-listed auto stocks have recently seen impressive gains, as of the close on November 12th. $XPENG-W (09868.HK)$ the stock prices have doubled in the past three months, $GEELY AUTO (00175.HK)$ with an 86% increase in the last three months. $LEAPMOTOR (09863.HK)$ Increased by 45% within three months.

Xiaomi's venture into car manufacturing is losing its momentum. On November 11, $XIAOMI-W (01810.HK)$ The stock price rose to HKD 29.70 during trading hours, hitting a new high in nearly three years. Calculated from the low point in February this year, Xiaomi Group's stock price has risen by 140%.

Cui Dongshu, Secretary General of the China Passenger Car Association, believes that with the country's call to combat the 'involution' phenomenon, terminal prices have stabilized in the third quarter. The intensification of the vehicle scrappage policy and the gradual introduction of local 'trade-in for new' policies have further alleviated consumer cautious sentiment, leading to a slight recovery in the overall new energy vehicle market.

In October, sales of new energy vehicles reached 1.37 million units, surpassing the historical peak.

Entering October, the 'trade-in for new' policy at the national level has significantly boosted automobile consumption, with car exhibitions and promotional activities in many places in full swing. The intensive launch of new car models by enterprises has continued to drive the heat in the automotive market, with both month-on-month and year-on-year increases in car sales in October. Among them, the passenger vehicle market continues to improve due to several positive factors, while the commercial vehicle market shows relatively weak performance. New energy vehicles and automobile exports continue to grow rapidly.

Specific to various auto brands, the top 10 retail electric vehicles (EVs) companies are:$BYD Company Limited (002594.SZ)$ , Geely Auto, SAIC-GM-Wuling,$Chongqing Changan Automobile (000625.SZ)$Chery Automobile, $LI AUTO-W (02015.HK)$ 、$Tesla (TSLA.US)$、 $LEAPMOTOR (09863.HK)$ 、$Chongqing Sokon Industry Group Stock (601127.SH)$Autos, $GAC GROUP (02238.HK)$ E'an.

Top $BYD COMPANY (01211.HK)$ 以0.431 million辆的零售销量位居榜单第一，不仅打破了自己的月销记录，其第三季度的营收还首次超越了特斯拉，后者在中国的零售销量环比大降43.9%，其10月的零售销量为40485辆。特斯拉在近期业绩会上表示，在中国，Model Y是2024年目前为止最畅销车型。

紧随其后的是 $GEELY AUTO (00175.HK)$ 10月销量0.2267 million辆，同比增长27.96%。新能源方面，10月吉利新能源销量（含吉利品牌、领克品牌、极氪品牌）0.1087 million辆，同比增长82.71，新能源占比48%，再创历史新高。

值得留意的是， $ZEEKR (ZK.US)$ 旗下首款家庭SUV极氪7X，上市仅50天交付量已经突破0.02 million台，再次刷新豪华纯电车型最快交付纪录。2024年10月，极氪7X已成为0.2 million以上中国纯电SUV车型销量冠军。截至11月11日美股收盘，极氪的股价9月以来的涨幅高达75.28%。

Chery Automobile had the highest sales growth rate in October, with a year-on-year increase of 416.3% in retail sales; followed closely by Chongqing Sokon Industry Group Stock, with a year-on-year increase of 142.9% in retail sales in October.

Xiaomi, despite losing its momentum in the car-making sector, continues to make great progress.

Xiaomi's goal for 2024 is to ensure delivery of over 0.1 million units, and to challenge the goal of completing 0.12 million units for the year. At a recent Xiaomi product launch event, Lei Jun announced that the October delivery volume had reached 0.02 million units, and it is expected to achieve the full-year goal of 0.1 million deliveries in November ahead of schedule, with deliveries continuing to accelerate.

Bank of America Securities commented on Xiaomi's car sales, pointing out the strong demand for Xiaomi's cars, expected to be due to better scale and product mix, with gross margin expected to further improve. The SU7 Ultra and SUV models are expected to help increase sales and average selling price.

Xiaomi's second-quarter financial report for this year marked the first quarterly report to disclose its car revenue. In that quarter, Xiaomi delivered 27,307 vehicles, generating revenue of 6.4 billion yuan, with a gross margin reaching 15.4%. On the day the financial report was released, the stock price surged by over 9%. $XIAOMI-W (01810.HK)$ The car sales reported by Xiaomi in the third quarter, released on November 18, are also worth noting.

Institutions believe that the sales momentum is expected to continue.

In October, the penetration rate of new energy car manufacturers was 50.1%, a 14 percentage point increase from the 36% penetration rate in October 2023. The retail penetration rate of new energy vehicles in October was 52.9%, breaking 50% for the fourth consecutive month.

China Galaxy pointed out that the domestic passenger vehicle market's penetration rate of new energy remains stable. It has been above 50% for five consecutive months, with strong performance in orders from leading new energy vehicle companies during the peak consumption season of 'Golden September and Silver October.' This is expected to sustain the market momentum and drive a continuous increase in penetration rate.

The Xiaopeng P7+ reached over 10,000 pre-orders within 12 minutes of its launch day, totaling 31,528 units on the first day. Leapmotor received over 0.042 million orders in October; Deep Blue received 0.036 million orders across its entire lineup in October, with the S05 achieving over 10,000 orders within 10 days of its launch; ZEEKR R7 accumulated over 0.03 million pre-orders in 33 days since its launch. Additionally, recently launched new models include the Geely Starship 7, AIONRT, and Avita 12 extended-range version, among others.

China international Capital Corporation believes that the finance news conference on November 8th mentioned the government's plan to expand and strengthen the replacement of old for new categories and efforts, as well as to replace local hidden debts. The central and local governments' policies of replacing old for new and substitution subsidies are expected to continue, with demand by year-end possibly smoothly transitioning into the first quarter of 2025. The current high demand in the car market may not lead to a larger scale overshoot next year, maintaining optimistic expectations for domestic sales growth and rapid growth in new energy vehicles next year.

BOCOM Intl pointed out that the subsidy policy for replacing old vehicles with new ones is entering its final stages, while the provincial-level replacement subsidy policy further relaxing requirements continues to benefit the automotive market. Additionally, the cooling weather and migrant workers gradually returning home are expected to drive the middle to low-end passenger vehicle market. Coupled with the wave of new car launches in the fourth quarter, it is anticipated that the passenger vehicle market will maintain the current trend of sustained year-on-year high retail growth in November and December.

Editor/Rocky