CSC Financial: The current pessimistic expectations for domestic passenger vehicle demand have been fully priced in; we recommend actively seizing allocation buy points at the bottom of the medium- to long-term cycle.

CSC Research notes that this week, China and the EU reached an understanding on hybrid vehicle trade in a manner consistent with WTO rules, and continued to advance the price undertaking procedure in the EV anti-subsidy case. The current pessimistic expectations for domestic passenger vehicle demand have been fully priced in, with short-term pressure stemming from policy expectation changes such as the reduction of export tax rebates and the imposition of consumption taxes. We recommend actively seizing medium- to long-term cycle-bottom allocation opportunities. The fundamentals of commercial vehicles and power shortages remain broadly stable, and attention should be paid to phased pullback allocation opportunities in low-valuation, strong-performance leading names. The robotics sector has entered a phase where the market's confidence in Optimus mass production is gradually rising, and the realization of the production ramp-up may catalyze a new inflection point in the industry trend. The smart driving sector is currently still at a low level of attention, and valuation is expected to be revised upward with mid-term L3/L4 technological and commercialization breakthroughs.