HK Stock Market Move | Car stocks continue to rise, LEAPMOTOR (09863) rises by over 16%. Passenger car retail sales maintains a high level of prosperity.

Car stocks continued to rise. As of the time of publication, LEAPMOTOR (09863) rose by 16% to 34.8 Hong Kong dollars; XPENG-W (09868) rose by 6.22% to 49.55 Hong Kong dollars; BYD COMPANY (01211) rose by 3.85% to 258.8 Hong Kong dollars; Great Wall Motor (02333) rose by 3.76% to 13.24 Hong Kong dollars; GEELY AUTO (00175) rose by 3.24% to 14.02 Hong Kong dollars. In terms of news, the National Development and Reform Commission (NDRC), Ministry of Finance, and others have issued a notice regarding the policy of large-scale equipment renewal and trade-in for consumer goods by 2025, which has increased subsidies for various types of vehicles such as passenger cars, trucks, and buses compared to the policy in July and August of last year. East Sea Securities believes that the trade-in policy will be implemented throughout the year with increased subsidy levels, which is expected to ensure continued strong sales performance in the automotive market. In addition, the retail sales of passenger cars remained strong at the end of the year, with an increase in market share for domestic brands compared to the previous year. It is worth mentioning that LEAPMOTOR recently announced a profit forecast, expecting annual operating income in 2024 to be no less than 30.5 billion yuan, with a year-on-year growth of at least 80%, mainly due to a 104% increase in sales to 293,700 units during the year. At the same time, the expected gross profit margin for 2024 is no less than 8%, which is significantly higher than the previous year, driven by the growth in sales volume, continuous optimization of product sales structure, and ongoing cost management efforts. In the fourth quarter of 2024, the group achieved a positive net profit, achieving the target of positive net profit for a single quarter one year ahead of schedule.