China auto stocks are seeing a boost as their market recovers, giving investors who had purchased shares ahead of an anticipated decline more confidence to stay invested in this sector.
Li Auto (LI) has established itself as one of the premier Chinese EV manufacturers. Their EREV models have proven superior, and LI has met or surpassed their delivery targets this year.
Li Auto (LI)
Li Auto designs, develops, manufactures and sells new energy vehicles in the People’s Republic of China. Their premium smart electric vehicle lineup – Li ONE and Li L series models – feature premium features. In addition, sales/service management, technology development services as well as corporate management are offered.
Established in 2015, this start-up company focuses on targeting China’s high-end (primarily SUV-centric) automobile market with family-oriented premium mobility solutions. Their mission is “create a mobile home, create happiness.”
Li Auto’s earnings and car sales have exceeded investors’ expectations, while patents could boost its long-term profitability. Furthermore, Chinese government’s recent extension of tax breaks for electric cars was yet another positive development that may help push Li Auto stock higher over the short-term; hence its strong popularity among speculators.
XPeng (XPEV)
XPeng designs, develops and manufactures smart electric vehicles. The Company provides environmentally friendly SUVs under its G3 brand as well as four-door sports sedans under the P7 brand for purchase or leasing agreements, maintenance contracts, super charging services and ride-hailing services to its clients. Established in 2015 and located in Guangzhou China.
Edison Yu, an analyst from Deutsche Bank, initiated coverage of XPeng with a Buy rating and $58 price target. He expects XPeng’s margins to improve significantly next year due to cost savings from production scale improvements and lower battery costs.
In Q3 2023, XPeng achieved a major achievement with the roll out of their advanced driver assistance system XNGP across 27 cities across China. This over-the-air update offers advanced driver assistance functions tailored specifically for each driving situation in each city – providing safer, smoother, and more enjoyable smart driving experiences for their owners and helping accelerate adoption of smart EVs in China.
Nio (NIO)
Major Asian bourses have experienced strong gains this morning following an abrupt market turnaround on Wall Street and Europe, led by Hang Seng up 3% and Shanghai Composite up 1.1% respectively. China plans further tax and fee cuts to stimulate its economy; tech stocks will likely become the focus.
Spotify shares took a dramatic tumble after-hours trading despite beating fourth-quarter earnings estimates and meeting user growth projections for first quarter, although these failed to live up to expectations.
Oil prices recovered after three-day selloff, as diplomatic efforts to end the Ukraine conflict gained steam. Both Europe and the US issued new sanctions against Russia over their invasion, yet these do not appear likely to disrupt oil supplies. HSBC raised their profit target and reported turning a corner due to bringing forward bad loans related to Covid-19 pandemic; SoftBank reduced its stake in Alibaba (though still owning over 30%).
BYD (BYDDF)
BYD Company Ltd and its subsidiaries specialize in producing and selling transportation equipment. BYD operates through three segments: Secondary Rechargeable Batteries and Photovoltaic Products; Mobile Phone Components Assembly and Other Products; Automobiles Automobile-Related Products and Others. BYD conducts its business primarily within People’s Republic of China as well as globally.
BYD recently inked an important agreement with Green Wheels USA of Chicago – an EV dealership specialized in electric vehicles – through which drivers can rent a BYD e6 for $200 per week and use it during their driving shifts before returning it back to Green Wheels until their next rental.
BYD, China’s electric vehicle (EV) giant, remains little-discussed despite having received backing from Warren Buffett and offering luxury models similar to Tesla (TSLA). Sales have been growing and there’s talk of an Uber deal being signed soon – suggesting BYD stock may be primed for an increase. Revenue and net income should both be key performance metrics to watch closely.
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