China Merchants International published a report stating that mainland Electric Vehicles companies performed strongly in December last year, and are expected to see high growth this year. The policy vacuum period in January and February presents an opportunity to invest in quality stocks. Among them, BYD (01211.HK) delivered 0.509 million Electric Passenger Vehicles last month, reflecting a year-on-year increase of 49.8% and a month-on-month increase of 1.1%. Annual deliveries totaled 4.25 million vehicles, representing a year-on-year increase of 41.1%. Sales are expected to reach between 5 million and 5.5 million vehicles this year, indicating a 23.5% year-on-year growth at the median value, with goals to double international sales. This year, attention will focus on the iteration of the pure electric platform, with the release of the second generation new blade Battery technology to enhance charging speed and endurance.

In terms of vehicle recommendations, China Merchants International strongly favors Geely (00175.HK) as the top pick in the Industry, with Electric Vehicles expected to grow by about 70% this year to 1.5 million units, indicating significant flexibility. Next is BYD, which is not highly valued and is still in a growth phase, with ample potential market space domestically and internationally. Following that are Tesla (TSLA.US)/Huawei system/Xiaopeng Motors (09868.HK)/Li Auto (02015.HK), which are leaders in intelligent technology.

In the components sector, the firm recommends FUYAO GLASS (03606.HK) as the top pick, believing in the continuous increase in its Global market share and high growth capability. The transition from a peak to off-peak season from January to February is a subsidy policy vacuum period, which may increase volatility in Automobile stocks. It is advisable to accumulate quality stocks with high certainty of growth throughout the year during low points.