HK Stock Market Move | Guangzhou Automobile Group (02238) rises by more than 10% again, Morgan Stanley says three major positive factors boost the stock price of Guangzhou Automobile Group, H-shares are still undervalued.

Guangzhou Automobile Group (02238) has risen by over 10%, as of the time of writing, it has increased by 8.84% to 4.31 Hong Kong dollars, with a turnover of 2.66 billion Hong Kong dollars. Morgan Stanley has released a report stating that Guangzhou Automobile Group has increased by 24% in the past week, mainly due to three recent positive developments, including the management's latest statement that they will start mass production of vehicles with solid-state batteries in 2026; a significant increase in information disclosure regarding the cooperation with Huawei's brand Qijing; and the announcement of a marketing collaboration with JD.com. Although these three initiatives will still take time to show significant results in terms of profitability, considering the latest business progress and the fact that Guangqi still holds a 5.7% market share this year, the bank believes that the current valuation is still underestimated. The bank pointed out that although Guangqi's subsidiary Aeolus is still in a loss-making situation, Guangqi Toyota's strategy to transition to new energy vehicles by 2025 has already shown results and is expected to spread to other internal joint venture brands. Therefore, once new operating plans are announced in the future, or if there is a significant influx of funds from the south, with the support of continuous improvement in fundamentals, the stock price is expected to show a significant reaction.