BOCOM Intl: It is recommended that investors seize the structural market of mainland car companies while remaining cautious and paying attention to short-term fluctuations.

BOCOM INTL published a research report, giving the mainland automotive industry a leading rating. The adjustment of the new energy vehicle purchase tax exemption policy in 2026 is expected to stimulate consumer purchases before the end of 2025, driving demand for car purchases at year-end and inventory buildup before the Spring Festival. The bank predicts that passenger car sales will remain strong at the end of the year. However, after the concentrated sales in the fourth quarter, the first quarter of 2026 may return to a seasonal downturn. Investors are advised to seize structural opportunities while remaining cautious and monitoring short-term fluctuations. The bank recommends paying attention to XPENG-W (09868) with the introduction of the new P7/extended range models and the gradual localization of production overseas to drive sales and improve profit margins; GEELY AUTO (00175) will undergo privatization through Ji Ke, promoting internal resource integration; and Chongqing Sokon Industry Group Stock will further expand its high-end market and increase profitability. The report indicates that retail sales of passenger cars in October decreased slightly year-on-year and month-on-month. With some provinces and cities tightening subsidies for replacing old cars with new ones and the high base effect, retail sales of passenger cars nationwide in October 2025 totaled 2.24 million units, up 0.8% year-on-year but down 0.1% month-on-month; and the cumulative total for January-October stood at 19.25 million units, up 7.9% year-on-year.