09973 Overview

Acquisition Interest: BYD COMPANY and GEELY AUTO are among the final candidates to acquire a Nissan-Mercedes joint venture plant in Mexico, which is facing shutdowns and layoffs due to US tariff policies.

Chinese Carmakers' Strategy: The plant has attracted interest from Chinese carmakers looking to establish a production base in Mexico, with other companies like CHERY AUTO and GWMOTOR also expressing interest.

Short Selling Data: BYD COMPANY has a short selling amount of $290.69M with a ratio of 19.810%, while GEELY AUTO has $40.87M in short selling with a ratio of 9.108%.

Market Analysis: Jefferies has raised the target price for BYD COMPANY to $105, indicating positive market catalysts for the company.

Canada's Joint Ventures with China: Canadian Industry Minister Melanie Joly announced plans to promote joint venture automotive plants with China for electric vehicle production aimed at global export.

Collaboration Opportunities: Canadian auto parts companies can partner with Chinese EV manufacturers to create assembly plants in Canada, ensuring compliance with safety regulations and labor standards while developing a local supply chain.

Revenue and Profit Decline: GWMOTOR's 4Q25 revenue increased by 13% QoQ to RMB69.2 billion, but net profit fell by 44% QoQ to RMB1.3 billion, significantly below expectations due to seasonal bonuses, low sales efficiency, and reduced tax rebates in Russia.

Operational Challenges: BOCI highlighted that GWMOTOR's extensive direct sales network and unclear sales prospects may hinder operational efficiency, posing significant risks to earnings.

Market Position in NEV: Despite efforts in new energy vehicle (NEV) sales, GWMOTOR is trailing behind competitors like GEELY AUTO and CHERY AUTO in market share and NEV transition.

Rating Downgrade: BOCI has downgraded GWMOTOR's rating from Hold to Sell and reduced its target price from HKD16 to HKD9.5.

CHERY AUTO Acquisition: CHERY AUTO has agreed to acquire land, buildings, and assets from Nissan Motor at the Rosslyn plant in South Africa, including a factory for car doors and body components, with the deal expected to close by mid-2026.

Nissan Motor Announcement: Nissan Motor has confirmed the agreement with CHERY AUTO but has not disclosed the transaction amount.

Strategic Agreement: China National Building Material Group (CNBM) signed a strategic cooperation agreement with Wuhu City and CHERY AUTO to enhance collaboration in the new material industry.

Focus Areas: The partnership aims to address new material demands in sectors such as new energy vehicles, robotics, low-altitude economy, and high-end equipment through the establishment of an R&D innovation platform and an industry base.

EU-China Tariff Agreement: The European Union has reached a consensus with China regarding tariffs on electric vehicles, requiring Chinese exporters to submit price commitment letters before entering the EU market.

Auto Stocks Performance: Following the tariff announcement, several Chinese carmakers, including BYD, CHERY, and GEELY, saw significant stock price increases, with BYD rising by nearly 4% and other brands also experiencing gains.