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<Research>JPM Prefers CN Autos in Order of BYD, Leapmotor, XPeng, Li Auto, Geely
Recommend 47 Positive 86 Negative 29 |
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JP Morgan’s report mentioned that GEELY AUTO (00175.HK) released preliminary 1Q25 results, with earnings (excluding one-off gains and accounting policy changes) surpassing expectations by 5-10%. BYD COMPANY (01211.HK) had earlier reported per-vehicle profit in the seasonally weak 1Q25, also topping expectations. The broker considered that earnings surprises as a key driver of stock price performance. Based on YTD share performance, earnings momentum relative to market expectations, and target price upside, JP Morgan ranked auto stocks in pecking order: BYD COMPANY, LEAPMOTOR (09863.HK), XPENG-W (09868.HK), LI AUTO-W (02015.HK), and GEELY AUTO. The broker also highlighted that last month’s wholesale figures from the China Passenger Car Association (CPCA) slightly beat, on the back of strong NEV growth and export volumes. Robust NEV sales confirmed JP Morgan’s view that hybrid and extended-range EVs are outstripping battery EVs. The broker forecast China’s auto exports to reach approximately 6.5 million units this year, up from 5.9 million last year. JP Morgan noted that U.S. auto tariffs have a mild impact on China’s auto industry, while cautioning about potential second-order repercussion from slowing global economic growth. Meanwhile, it estimated that global automakers’ average operating margins could subside about 30% due to U.S. tariffs, prompting the broker to monitor whether this reduces the financial flexibility of global peers in vying with Chinese automakers internationally. AAStocks Financial News |
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