LI.US Overview

Share Repurchase Consideration: Li Xiang, CEO of LI AUTO-W, is considering a repurchase of some Hong Kong-listed shares, with details still being discussed, according to Chinese media sources.

Current Stock Performance: LI AUTO-W's stock closed up 1.16% at HKD9.85, with a trading volume of nearly 10 million shares, while pre-market shares in the US rose 4.3% to USD18.52.

Stock Ratings Overview: Various companies in the automotive sector, including BYD, Li Auto, XPeng, and Fuyao Glass, received "Buy" ratings with adjusted target prices reflecting recent market performance.

Short Selling Activity: Significant short selling activity was noted for several companies, with Li Auto and Minth Group showing high short selling ratios of 34.55% and 21.42%, respectively.

Neutral and Sell Ratings: NIO, Tuopu Group, and Huayu Automotive received "Neutral" or "Sell" ratings, indicating a cautious outlook on their stock performance.

Market Pressures: CLSA reported that rising costs are further compressing automaker profits, with companies like BYD and Leapmotor positioned better to absorb these pressures.

Company Expansion: LI AUTO-W is expanding into the robotics sector, focusing on 'embodied intelligence' and planning to develop humanoid robots and AI-driven hardware, according to a Citi Research report.

Valuation Methodology Update: Citi Research has updated its valuation methodology for LI AUTO-W, shifting from a pure PS ratio to a SOTP approach, resulting in increased target prices for its US stock and H-shares.

Market Performance Analysis: The report indicates that high-priced EV models show resilience to rising raw material costs, which may explain the recent outperformance of SERES compared to XPENG-W and BYD ELECTRONIC.

Broker Rating: Citi Research maintains a Neutral rating for LI AUTO-W amidst these developments.

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.

Sales Forecast Revision: Citi has revised down its sales forecast for Li Auto by 9-10% for 2026 and 2027, anticipating 455,000 and 503,000 units respectively, due to order intake misses and increased competition.

Target Price Adjustment: The target price for Li Auto's H shares has been lowered from HKD77.7 to HKD71.1, and for its US shares from USD20.2 to USD18.5, reflecting pressure on margins and market competition, while maintaining a Neutral rating.

Nasdaq Golden Dragon Index Performance: The Nasdaq Golden Dragon China Index rose by 4.3%, closing at 8,023, with a significant increase in Chinese ADRs.

Notable Stock Movements: Alibaba surged by 10.2%, while other companies like Bilibili and XPeng saw increases of 9% and 8.4%, respectively; however, Pinduoduo experienced a decline of 1.5%.

Inflation Rate Update: China's inflation rate for December was reported at 0.2%, an increase from the previous month's rate of -0.1%.

Market Context: The performance of Chinese ADRs reflects a broader positive trend in the market, despite some individual stock fluctuations.