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<Research>JPM Foresees Slow Start for CN Auto Sales in 1Q, Pax. Car Demand to Remain Subdued
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The stock performance of Chinese OEMs remained lackluster, collectively sinking about 1% YTD, compared to a 6% leap in the MSCI China Index, JPMorgan said in a research report. The broker attributed this to a slow start in auto sales in 1Q26. Although the Chinese government updated its new trade subsidy policy for the automotive industry, passenger car demand in 1Q26 will continue to be under pressure, JP Morgan noted. This was due to factors such as brought-forward demand, weak consumer confidence, and a wait-and-see attitude among buyers hoping for further policies and new models this year. Considering the market background, the broker anticipated that the competitive landscape of China's automotive industry will shift from price wars to value creation. It also believed that OEM companies with breakthroughs in autonomous driving and AI, effective cost control, and the ability to further expand into overseas markets will be in a favorable position in the competition. The broker forecast BYD COMPANY (01211.HK), GEELY AUTO (00175.HK), and LEAPMOTOR (09863.HK) to bottom out in 2Q26, and suggested that investors seeking additional alpha may consider XPENG-W (09868.HK) and NIO-SW (09866.HK). On the other hand, the broker stayed reserved about LI AUTO-W (02015.HK). AASTOCKS Financial News Website: www.aastocks.com |
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