Lyon: Optimistic about the moderate recovery of the Chinese auto market and the ratings of BYD (01211) and Geely Auto (00175) as “Highly Confident to Outperform the Market”

The Zhitong Finance App learned that Lyon released a research report saying that the Chinese auto market experienced a moderate recovery. BYD shares (01211) led most of the rebound, and other brands also recorded moderate growth. The launch of new models injected vitality into the market. Orders from major brands rebounded 24% weekly last week, reversing the weak performance after the previous week's holiday.

Among them, mass market orders increased 30% on a weekly basis, mainly driven by strong demand from BYD's second-generation Seagull; orders from new car builders and high-end brands such as NIO SW (09866), Xiaopeng Motor-W (09868), and Ideal Automobile-W (02015) increased by 7% and 9%, respectively.

However, the bank believes that the automobile market as a whole is still bottoming out, and retail sales in October are still expected to be far below last year's level. With anti-domestic measures limiting room for further price cuts, the launch of new models will be a key driving force for sales in the fourth quarter, and intensive new car launches in the coming weeks are expected to provide some support.

In terms of ratings and target prices, Lyon gave BYD and Geely Auto (00175) “Highly Confident to Outperform the Market”, with target prices of HK$109 and HK$22 respectively; Zero Sports (09863) was given a “Outperform the Market” rating, with a target price of HK$61.