Latest Search
Quote
| Back Zoom + Zoom - | ||||
|
<Research>CMS Predicts Limited Impact from Promotions on BYD COMPANY's Results, Greater Resilience in GEELY AUTO in Short-to-Medium Term
Recommend 19 Positive 33 Negative 18 |
||||
|
||||
|
According to a research report from China Merchants Securities, regarding carmakers' 618 promotional campaigns, the broker viewed promotions as a normal tactic because of rising industry inventory during the off-season and pressure on end-user sales. BYD COMPANY (01211.HK) has already taken a significant lead in electrification, and it aims to seize more market share and further consolidate its position with price cuts. In the broker's estimates, sales will increasingly concentrate among leading Chinese brands as the penetration rate of new energy vehicles surpasses 50%. As for recent comments from GWMOTOR (02333.HK) management likening the auto industry to Evergrande, China Merchants Securities believed that the intention was to remind the industry to develop healthily, but it was somewhat extreme and has triggered excessive market concern. Given that BYD COMPANY's overseas business continues to grow strongly in 2025-26 with export profit margins higher than those in the domestic market, the broker projected that promotions will have only a limited negative impact on the company's results. In addition, the per-ton cost of lithium carbonate has dived compared to last year, which could partially offset the impact of promotions. China Merchants Securities stayed bullish on BYD COMPANY and GEELY AUTO (00175.HK) in the long term. Considering current market capitalization, GEELY AUTO may show greater resilience in the short-to-medium term. The broker set its target price for GEELY AUTO at HKD27.5 (details available in a separate table) and for BYD COMPANY at HKD510, both with an Outperform rating. AAStocks Financial News |
||||
Copied to Clipboard
 |
||||
