<Research>HTSC: FAW's Acquisition of Premium Stake Expected to Launch LEAPMOTOR (09863.HK) into New Phase; Profitability Anticipated
Company Milestone: LEAPMOTOR held its tenth-anniversary press conference, announcing FAW's acquisition of a premium stake for approximately RMB3.74 billion, aiming to become a world-class car manufacturer.
Sales and Profitability Goals: The company anticipates sales of 600,000 units in 2025, with a long-term target of 1 million units this year and 4 million units in the future, marking a potential turning point for profitability.
Market Outlook: Huatai Securities predicts rapid revenue growth for LEAPMOTOR from 2025 to 2027, driven by strategic partnerships and an enhanced global production strategy.
Valuation and Investment Rating: The company received a 30% valuation premium from Huatai Securities, with a target price adjustment to $83.69 and a maintained "Buy" rating, reflecting confidence in its new car cycle and profit potential.
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JPM Cuts LI AUTO-W Rating to Underweight; Recommends GEELY AUTO and SINOTRUK as Top Choices
Market Outlook: JP Morgan predicts the Chinese automobile market will experience a mixed performance in 2023, with potential negative growth similar to 2018, but also volatility driven by new model releases and seasonal trends akin to 2025.
Top Picks: The broker's top stock picks include GEELY AUTO and SINOTRUK, while they see potential in BYD COMPANY, LEAPMOTOR, XPENG-W, and NIO for future positioning.
Investment Ratings: JP Morgan has assigned various investment ratings and target prices for several automobile stocks, with BYD COMPANY and SINOTRUK rated as "Overweight," while LI AUTO-W has been downgraded to "Underweight."
Short Selling Data: The report includes short selling data for the stocks mentioned, indicating varying levels of market sentiment and potential risks associated with each stock.
<Research>CLSA: Rising Costs Squeeze Automaker Profits; BYD and Leapmotor More Resilient to Pressure
Impact of Commodity Prices: Rising commodity prices are creating challenges for automakers, potentially leading to industry consolidation and adjustments in pricing strategies, as highlighted by CLSA's research report.
Cost Increases: Raw material costs are expected to raise the average cost per vehicle by approximately RMB3,000, driven by increases in lithium carbonate, memory chips, and non-ferrous metals.
Vertical Integration Advantage: Automakers with higher vertical integration, like BYD, or those with significant external auto part sales, such as LEAPMOTOR, are better positioned to manage the cost pressures from rising raw material prices.
EV Market Dynamics: Geely Auto is emerging as a strong competitor in the electric vehicle sector, while the Chinese automotive industry is undergoing consolidation, with market share increasingly concentrated among tier 1 OEMs.
LEAPMOTOR CEO: Comprehensive Assessment Launched on Organizational Issues Revealed at Automotive Electronics Annual Meeting
Employee Complaint: An employee of LEAPMOTOR expressed dissatisfaction on social media regarding the lack of lunch and air conditioning during the company's annual meeting.
Company Response: Zhu Jiangming, the founder and CEO of LEAPMOTOR, acknowledged the complaint and committed to addressing the organizational issues highlighted by the meeting.
Review Process: LEAPMOTOR has launched a comprehensive review of the annual meeting to improve the overall process from preparation to execution.
Market Context: The company's stock is experiencing short selling activity, with a reported short selling amount of $84.65 million and a ratio of 26.605%.
Citi Supports BYD COMPANY/ PONY-W, Outlines 5 Advantages and Obstacles for China's Automotive Sector
Citi's Outlook on Chinese Carmakers: Citi has a neutral outlook for Chinese carmakers in 1Q26, predicting that BYD, Geely, and Leapmotor may outperform the market due to model updates and strong export growth, while others like Seres and Li Auto may struggle with profit margins and weak sales.
Industry Challenges and Tailwinds: The Chinese auto industry is expected to face five major tailwinds, including increased EV market share and export growth, but also five challenges such as rising costs and cautious retail growth for EVs, leading to a potential decline in wholesale and retail forecasts for FY26.
Stock Recommendations: Citi has recommended several stocks, including BYD, Pony, WeRide, Hesai, Minth Group, and Weichai Power, amidst a backdrop of short selling activity and varying market performance.
Market Conditions: The report highlights a potential end to the price war in passenger vehicles and a favorable phase for commercial vehicle demand, while also noting high inventory levels of fuel vehicles as a concern for the market.
CMBI Ratings and Target Prices for Automotive, Parts, and Related Stocks (Table)
Stock Performance: XPeng (XPEV.US) and other automotive stocks like BYD and Geely Auto are rated as "Buy," with varying target prices and short selling ratios indicating market activity and investor sentiment.
Market Predictions: CICC forecasts changes in the Hang Seng Index, suggesting new constituents like ZIJIN GOLD INTL and BEONE MEDICINES, while Standard Chartered may replace Hang Seng Bank.
Industry Insights: UBS highlights high growth targets for the Chinese auto industry, focusing on exports and intelligence, while JPMorgan anticipates a slow start for auto sales in the first quarter.
Sales Forecast Adjustments: Citi has revised its sales forecast for Li Auto, projecting a decrease for 2026-27, while maintaining a hold rating for both Li Auto and Nio.
CMBI Selects GEELY AUTO as Preferred Choice, Lowers 2026 NEV Sales Projections
CMBI's Sales Forecast: CMBI maintains a forecast for a 0.1% YoY decline in retail sales and a 2.9% YoY increase in wholesale sales of passenger vehicles in China, influenced by disappointing sales data from late last year.
New Energy Vehicles Adjustments: The growth forecast for new energy vehicles has been revised down to 12.6% for retail and 15.1% for wholesale sales due to stricter trade-in subsidy requirements.
Earnings Forecast Changes: CMBI has lowered its 4Q25 earnings forecasts for several automakers, including GWMOTOR, XPENG-W, LEAPMOTOR, and GAC GROUP, due to poor sales performance.
Positive Outlook for BYD and Others: Conversely, CMBI raised earnings forecasts for BYD, NIO, and LI AUTO, while maintaining its forecasts for GEELY AUTO, which it selected as a top pick with a Buy rating and a target price of HKD25.
JPM Cuts LI AUTO-W Rating to Underweight; Recommends GEELY AUTO and SINOTRUK as Top Choices
Market Outlook: JP Morgan predicts the Chinese automobile market will experience a mixed performance in 2023, with potential negative growth similar to 2018, but also volatility driven by new model releases and seasonal trends akin to 2025.
Top Picks: The broker's top stock picks include GEELY AUTO and SINOTRUK, while they see potential in BYD COMPANY, LEAPMOTOR, XPENG-W, and NIO for future positioning.
Investment Ratings: JP Morgan has assigned various investment ratings and target prices for several automobile stocks, with BYD COMPANY and SINOTRUK rated as "Overweight," while LI AUTO-W has been downgraded to "Underweight."
Short Selling Data: The report includes short selling data for the stocks mentioned, indicating varying levels of market sentiment and potential risks associated with each stock.
<Research>CLSA: Rising Costs Squeeze Automaker Profits; BYD and Leapmotor More Resilient to Pressure
Impact of Commodity Prices: Rising commodity prices are creating challenges for automakers, potentially leading to industry consolidation and adjustments in pricing strategies, as highlighted by CLSA's research report.
Cost Increases: Raw material costs are expected to raise the average cost per vehicle by approximately RMB3,000, driven by increases in lithium carbonate, memory chips, and non-ferrous metals.
Vertical Integration Advantage: Automakers with higher vertical integration, like BYD, or those with significant external auto part sales, such as LEAPMOTOR, are better positioned to manage the cost pressures from rising raw material prices.
EV Market Dynamics: Geely Auto is emerging as a strong competitor in the electric vehicle sector, while the Chinese automotive industry is undergoing consolidation, with market share increasingly concentrated among tier 1 OEMs.
LEAPMOTOR CEO: Comprehensive Assessment Launched on Organizational Issues Revealed at Automotive Electronics Annual Meeting
Employee Complaint: An employee of LEAPMOTOR expressed dissatisfaction on social media regarding the lack of lunch and air conditioning during the company's annual meeting.
Company Response: Zhu Jiangming, the founder and CEO of LEAPMOTOR, acknowledged the complaint and committed to addressing the organizational issues highlighted by the meeting.
Review Process: LEAPMOTOR has launched a comprehensive review of the annual meeting to improve the overall process from preparation to execution.
Market Context: The company's stock is experiencing short selling activity, with a reported short selling amount of $84.65 million and a ratio of 26.605%.
Citi Supports BYD COMPANY/ PONY-W, Outlines 5 Advantages and Obstacles for China's Automotive Sector
Citi's Outlook on Chinese Carmakers: Citi has a neutral outlook for Chinese carmakers in 1Q26, predicting that BYD, Geely, and Leapmotor may outperform the market due to model updates and strong export growth, while others like Seres and Li Auto may struggle with profit margins and weak sales.
Industry Challenges and Tailwinds: The Chinese auto industry is expected to face five major tailwinds, including increased EV market share and export growth, but also five challenges such as rising costs and cautious retail growth for EVs, leading to a potential decline in wholesale and retail forecasts for FY26.
Stock Recommendations: Citi has recommended several stocks, including BYD, Pony, WeRide, Hesai, Minth Group, and Weichai Power, amidst a backdrop of short selling activity and varying market performance.
Market Conditions: The report highlights a potential end to the price war in passenger vehicles and a favorable phase for commercial vehicle demand, while also noting high inventory levels of fuel vehicles as a concern for the market.
CMBI Ratings and Target Prices for Automotive, Parts, and Related Stocks (Table)
Stock Performance: XPeng (XPEV.US) and other automotive stocks like BYD and Geely Auto are rated as "Buy," with varying target prices and short selling ratios indicating market activity and investor sentiment.
Market Predictions: CICC forecasts changes in the Hang Seng Index, suggesting new constituents like ZIJIN GOLD INTL and BEONE MEDICINES, while Standard Chartered may replace Hang Seng Bank.
Industry Insights: UBS highlights high growth targets for the Chinese auto industry, focusing on exports and intelligence, while JPMorgan anticipates a slow start for auto sales in the first quarter.
Sales Forecast Adjustments: Citi has revised its sales forecast for Li Auto, projecting a decrease for 2026-27, while maintaining a hold rating for both Li Auto and Nio.
CMBI Selects GEELY AUTO as Preferred Choice, Lowers 2026 NEV Sales Projections
CMBI's Sales Forecast: CMBI maintains a forecast for a 0.1% YoY decline in retail sales and a 2.9% YoY increase in wholesale sales of passenger vehicles in China, influenced by disappointing sales data from late last year.
New Energy Vehicles Adjustments: The growth forecast for new energy vehicles has been revised down to 12.6% for retail and 15.1% for wholesale sales due to stricter trade-in subsidy requirements.
Earnings Forecast Changes: CMBI has lowered its 4Q25 earnings forecasts for several automakers, including GWMOTOR, XPENG-W, LEAPMOTOR, and GAC GROUP, due to poor sales performance.
Positive Outlook for BYD and Others: Conversely, CMBI raised earnings forecasts for BYD, NIO, and LI AUTO, while maintaining its forecasts for GEELY AUTO, which it selected as a top pick with a Buy rating and a target price of HKD25.
