BOCOM INTL: Old-for-New policy + promotional activities of automobile companies are expected to drive post-holiday recovery. It is advisable to pay attention to BYD COMPANY (01211) and others.

BOCOM INTL released a research report stating that after the Spring Festival, many car companies (including Tesla, Inc., Xiaopeng, Zhiji, Avita, etc.) have launched promotional activities. Compared to cash discounts in the past two years, more car companies have introduced interest rate reduction policies this time. With the gradual release of the old-for-new policy in some regions, the bank believes that the automobile market is expected to enter a post-holiday warming period. Recently, BYD Company Limited has lowered the price of advanced intelligent driving to below 100,000 yuan, which will promote the development of intelligent driving, and the new energy passenger car market is expected to further improve. The bank recommends focusing on high-quality targets in the passenger car sector such as BYD COMPANY (01211/Buy) with DM5.0 model + export and XPENG-W (09868/XPEV.US/Buy)/NIO-SW (09866/NIO.US/Buy) new car cycle (M03/P7+/Le Dao L60). The main points of BOCOM INTL are as follows: In January 2025, the retail sales of passenger cars were 1.794 million, a year-on-year decrease of 12.1%. As the annual end of the national car scrappage and replacement policy in 2024 and the early Spring Festival in 2025, some consumers completed their replacement car purchase plan before the Spring Festival in late 2024, leading to a soft performance of the automotive market in January 2025. In January 2025, the national passenger car market sold 1.794 million units (YoY/-12.1%, MoM/-31.9%). Independent brands outperformed the overall industry, with independent brand retail sales of 1.09 million units in January, a YoY/-2%, MoM/-33% performance, and the national share of independent brands increased by 5.9 percentage points YoY to 61%; mainstream joint venture brand retail sales were 490,000 units (YoY/-27%, MoM/-30%), with German/Japanese/American brand retail shares of 18.4%/13.4%/5.3% respectively (YoY-0.7/-3.3/-1.1 percentage points). New energy vehicle retail sales continue to grow, with a penetration rate of 41.5%. In January 2025, the retail sales of new energy vehicles reached 744,000 units (YoY/+10.5%, MoM/-42.9%), with a penetration rate of 41.5%, up 8.7/-7.9 percentage points YoY/MoM. In terms of brands, the penetration rate of new energy vehicles in January was as high as 60.6% for independent brands, 20% for Deluxe Corporation, and 3% for joint venture brands. Among them, BYD Company Limited's market share was 27%; the overall retail share of new forces increased by 5.7 percentage points to 20.8% YoY; Tesla, Inc.'s retail share decreased by 1.4 percentage points to 4.5% YoY. The growth rate of passenger car exports slowed down. In January 2025, the total export volume of passenger cars (including complete vehicles and CKD) was 380,000 units, with a YoY/+3%, MoM/-6% growth rate slowing down. In January, the export of new energy vehicles was 139,000 units, a YoY increase of 29.4%, accounting for 36.6% of the total exports. Independent brands accounted for 328,000 units of exports in January, accounting for 86% of the total exports, with a YoY/+8%, MoM/-9% performance.