HK Stock Market Move | Car stocks continue recent declines with domestic car sales falling more than 19.5% in the first five months. Institutions point to multiple factors causing the sector to underperform the overall market.

Car stocks continued their recent downward trend. As of the time of this report, Xiaopeng Motors -W (09868) fell by 3.94% to 49.52 Hong Kong dollars; LI AUTO-W (02015) fell by 3.88% to 48.56 Hong Kong dollars; BAIC MOTOR (01958) fell by 1.11% to 0.89 Hong Kong dollars. In news, on June 13th, Li Bin, the founder, chairman, and CEO of NIO, stated at a forum in Chongqing that the Chinese automotive industry has entered a new and challenging stage this year. Li Bin mentioned that from January to May, the domestic retail market in China decreased by 19.5% compared to the previous year, and he predicts that the market will not see a rebound in the second half of the year. He called on the industry to be prepared for a 15%-20% decline in domestic retail volume compared to last year. Dongxing pointed out that the decline in the performance of the automotive sector, combined with market focus on the technology sector, has led to underperformance of the automotive sector compared to the overall market. From January 1st to June 16th, the Shanghai Composite Index rose by 3.01%, and the CSI 300 Index rose by 5.49%. Meanwhile, the CICC Passenger Car Index fell by 23.52% and the CICC Automobile Parts Index fell by 9.75%, both underperforming the overall market. In terms of sector performance, the passenger car segment has been affected by the downturn in the domestic automotive market, putting pressure on the revenue and profit of car companies. Additionally, the net profit attributable to the parent company of most car companies has shown a weaker performance compared to their revenue.