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<Research>BOCI Recommends Xiaomi, Geely, Nio for Autos, Still Upbeat on Li Auto's Mid-to-long Term Growth Outlook
Recommend 40 Positive 92 Negative 24 |
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A research report from BOCI pointed out that the share prices of Hong Kong-listed automakers as a whole have lagged behind various fundamental indicators YTD. The report believed that the difference is mainly due to the market-wide pessimism in macro climates and auto sector. Entering 4Q24, which is also the traditional peak season for the auto industry, the broker expected that valuations will bounce back considerably, thanks to OEMs with strong product cycles and valuations at historical lows. The broker was bullish on XIAOMI-W (01810.HK), GEELY AUTO (00175.HK) and NIO-SW (09866.HK). As for LI AUTO-W (02015.HK), the broker stayed upbeat on its medium-to-long-term growth prospects, although there is a lack of short-term catalysts. The broker reiterated its Buy rating on XIAOMI-W, saying that the launch of new products in late October will be the next catalyst. It expected monthly deliveries of the SU7 to surpass 20,000 units in 4Q24 and promotional activities for the next electric vehicle (EV) product in early 2025. The broker also rated GEELY AUTO at Buy, predicting an upward revision of earnings forecasts in the market to help its valuation recover. Short-term catalysts included market response to flagship models in 2H24 and continued operational integration at the group level. As for NIO, the broker expected meaningful loss narrowing and cash flow improvement driven by a stronger new product cycle, even though short-term quarterly losses are relatively high. The broker maintained its Buy rating and target price of US$9. As for BYD COMPANY (01211.HK) and BRILLIANCE CHI (01114.HK), the broker believed that it is necessary to continue to pay close attention to the progress of BYD's slow premiumization YTD, the competition from new energy vehicle (NEV) companies, and the company's monthly sales data, and maintained its rating of Buy and target price of $265. Meanwhile, the latter's stock price mainly depends on investors' expectations of future dividends, which may be affected by the company's future investment projects. Due to the uncertainty of the dividend yield and the net cash per share of $1.8, the rating was kept at Buy. AAStocks Financial News |
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