JPMorgan issued a research report stating that this year’s performance of China’s automobile market will exhibit a mix of trends seen in 2018 and 2025: 1) Due to the overall passenger vehicle market growth rate falling into negative territory (similar to 2018), the industry’s performance for the entire year may be relatively weak; 2) However, driven by new model launches, seasonal trend fluctuations, and changes in earnings expectations (similar to 2025), market volatility throughout the year is expected to intensify. Whether absolute or relative returns can be achieved will depend on whether corporate earnings can exceed expectations, which will be more challenging amidst rising costs.
Taking the above factors into account, the bank’s top picks are Geely (00175.HK) and Sinotruk (03808.HK); at the same time, the bank believes that BYD (01211.HK), Leapmotor (09863.HK), XPeng Motors (09868.HK), and Nio (NIO.US) may present notable investment opportunities in March or the second quarter of this year. Conversely, the bank downgraded Li Auto (02015.HK) to “Underweight.”
JPMorgan’s investment ratings and target prices for auto stocks are listed as follows:
Stock | Investment Rating | Target Price
BYD (01211.HK) | Overweight | HKD 150 → HKD 110
Great Wall Motor (02333.HK) | Neutral | HKD 17 → HKD 14
Geely (00175.HK) | Overweight | HKD 24 → HKD 22
Li Auto (02015.HK) | Neutral → Underweight | HKD 73 → HKD 56
Nio (NIO.US) | Overweight | USD 8 → USD 7
Sinotruk (03808.HK) | Overweight | HKD 26 → HKD 45
XPeng Motors (09868.HK) | Overweight | HKD 195 → HKD 135
Leapmotor (09863.HK) | Overweight | HKD 95 → HKD 56
