Bank of America Securities: Potential demand for autonomous driving components expands, NEXTEER's rating raised to "Buy" in one go.

Bank of America Securities released a research report stating that, with BYD COMPANY (01211) and other leading car companies lowering the threshold for autonomous driving, the potential demand for related autonomous driving components is expanding. The bank has upgraded NEXTEER's (01316) rating from "underperform" to "buy" in one go, with a target price raised from 2.8 Hong Kong dollars to 6.4 Hong Kong dollars. The company's earnings growth from 2024 to 2026 is expected to be stable, with an estimated annual compound growth rate of 57% during this period. The bank stated that autonomous driving (AD) capability has become a key consideration for consumers when purchasing electric vehicles. BYD Company Limited recently announced its car intelligence strategy and advanced intelligent driving system "God's Eye", lowering the threshold for intelligent driving to mid-to-low price passenger cars. The bank expects that other leading Chinese car companies will launch similar features in the next two to three months, sparking a new round of industry competition. Car brands that fail to keep up with the development of autonomous driving technology may continue to lose consumers' attention and thus market share. Additionally, due to the pre-demand brought by government subsidies, the bank estimates that Chinese automotive contract manufacturers' profits in the fourth quarter of last year met expectations.