HK Stock Market Move | Most auto stocks decline; CHERY AUTO (09973) falls over 4%; industry profitability under overall pressure amid multiple factors.

Most auto stocks decline, as of press time, CHERY AUTO (09973) fell 4.04% to HK$23.26; XPENG-W (09868) fell 3.84% to HK$37.6; Great Wall Motor (02333) fell 2.51% to HK$7.2; LI AUTO-W (02015) fell 2.32% to HK$44.68. On the news front, Orient pointed out that in Q2, pressure on domestic auto demand, intensifying market competition, rising raw material prices, exchange rate fluctuations and other external factors led to overall weak profitability and gross margins for auto companies. However, after excluding the impact of foreign exchange, some companies with strong comprehensive competitiveness and high operational management efficiency still achieved year-on-year improvement in net profit attributable to parent and gross margins; it is expected that continued export growth in the second half of the year and the marginal weakening of foreign exchange effects will help drive marginal improvement in the performance of some highly competitive companies. Soochow stated that in the short term, due to base effects, the bank expects the year-on-year decline in domestic passenger vehicle demand to narrow starting in the second half of this year. From a full-year perspective: domestically, choose stocks resilient to fluctuations plus export names with certainty. Domestically, focus on individual stocks in the high-end electrification segment that are insensitive to policy disruptions, as well as automakers expected to see volume growth from premiumization; for the export main line, prioritize leading automakers with mature overseas systems and proven execution capabilities.