Understanding the Market | Why are Hong Kong-listed automotive stocks experiencing a widening decline? Wall Street giants have a pessimistic outlook.
Citigroup predicts that electric vehicle sales in China will decrease by 25% month-on-month in January, and will further decline by 50% in February. However, there is hope for a 60% recovery in March. Sales in the first quarter of this year are expected to decline by 40%. According to a report by Morgan Stanley, sales in the Chinese passenger vehicle market have remained relatively stable in the past week, with a 1% decrease in sales of new energy vehicles. Sales performance among different automakers will vary.
Zhitong App learned that the afternoon decline in automotive stocks has widened. As of the time of writing, XPENG-W (09868) has fallen by 9.87% to HKD 38.8, GWMOTOR (02333) has fallen by 5.14% to HKD 9.04, and LI AUTO (02015) has fallen by 2.38% to HKD 114.8.
Citigroup has released a report stating that according to retail data on electric vehicle sales in China, sales in the first half of January have decreased by 25% compared to the previous month. Specifically, sales in the second week have decreased by 1% compared to the previous week, which is lower than the bank's original expectation of a 5% to 15% weekly increase. The bank predicts that electric vehicle sales in January will be 623,000 units, a 30% decrease compared to the previous month. It is estimated that sales in February, entering the off-season, will decrease by 50% compared to the previous month, and it is expected to rebound by 60% in March. The bank estimates that sales in the first quarter of this year in mainland China will be 1.43 million units, a 40% decrease compared to the previous quarter (a 16.6% increase compared to the previous year).
Morgan Stanley has released a research report stating that the sales of passenger vehicles in China have remained roughly stable at around 437,500 units in the past week. The sales of new energy vehicles have decreased by 1% on a weekly basis. With LI AUTO and Tesla recently reducing prices, it is estimated that domestic OEM car manufacturers may seek to weaken their competitors. The bank's survey shows that the order volume of domestic electric vehicle manufacturers, which surged in December last year, is still suppressed, and the sales performance of various car companies during the off-season will increasingly diverge.