Capable of directly enhancing the smart cockpit experience in cars, China's AI platform "DeepSeek" has sparked new insights into self-driving technology, China Merchants Securities remarked in its report.
In the broker's opinion, the three key elements of autonomous driving competition, namely algorithms, data, and computing power, have not changed, nor has the competitive edge of leading players like Tesla (TSLA.US), Huawei, XPENG-W (09868.HK), and LI AUTO-W (02015.HK). Yet, the innovations sparked by DeepSeek will further strengthen these players' leadership.
In addition, companies like XPENG-W, which previously had advanced algorithms but lacked computing power capital, will have greater development opportunities. It is expected that second-tier companies lagging in smart driving, including BYD COMPANY (01211.HK) and GEELY AUTO (00175.HK), can speed up to catch up with their first-tier peers.
China Merchants Securities remained bullish about the GEELY AUTO, XPENG-W, and BYD COMPANY combination, which would be shored up by sales growth and changes in smart driving margins. It raised its target prices for the H-shares of these three companies to $23.2, $92, and $460 respectively.
In terms of the components sector, given that the penetration rate of smart driving will escalate notably along with high certainty in component volume increases, China Merchants Securities will focus on BYD ELECTRONIC (00285.HK), as well as smart driving chip suppliers HORIZONROBOT-W (09660.HK) and BLACK SESAME (02533.HK). In the LiDAR sector, the broker's focus will be on Hesai Group (HSAI.US) and ROBOSENSE (02498.HK).
China Merchants Securities' investment ratings and target prices for Chinese electric vehicle stocks are detailed on a separate table.
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AAStocks Financial News
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| SG Top Picks |
| Stock & Type |
Code |
Strike(Call Level) |
Last |
Effective Gearing |
| GEELY (C) |
28860 |
19.52 (-) |
0.174 |
4.5 X |
| GEELY (C) |
13152 |
18.51 (-) |
0.260 |
3.6 X |
| GEELY (P) |
29535 |
11.98 (-) |
0.039 |
6.6 X |
| GEELY (Bull) |
54589 |
15.58 (16.08) |
0.038 |
9.2 X |
| GEELY (Bull) |
54105 |
14.3 (14.8) |
0.066 |
5.3 X |
| BYDEI (C) |
13778 |
62 (-) |
0.202 |
1.9 X |
| BYD (C) |
14002 |
476.08 (-) |
0.265 |
5.3 X |
| BYD (C) |
28953 |
380.2 (-) |
0.470 |
5.1 X |
| BYD (P) |
13509 |
249 (-) |
0.039 |
6.0 X |
| BYD (Bull) |
55195 |
346 (350) |
0.100 |
7.8 X |
| BYD (Bull) |
54607 |
334 (338) |
0.126 |
6.2 X |
| BYD (Bear) |
54609 |
429 (425) |
0.064 |
12.3 X |
| BYD (Bear) |
54556 |
409 (405) |
0.031 |
25.3 X |
| LI (C) |
29300 |
121.98 (-) |
0.145 |
3.7 X |
| LI (C) |
27190 |
98.93 (-) |
0.300 |
2.5 X |
| LI (Bull) |
53026 |
89.8 (93.8) |
0.207 |
5.3 X |
| LI (Bull) |
52415 |
77.2 (81.2) |
0.067 |
3.3 X |
| LI (Bear) |
54688 |
144 (140) |
0.065 |
3.4 X |
| XPENG (C) |
28130 |
73 (-) |
0.290 |
3.0 X |
| XPENG (Bear) |
60309 |
81.5 (80) |
0.113 |
6.4 X |
| TSLA (C) |
10469 |
440 (-) |
0.455 |
4.5 X |
| TSLA (C) |
10441 |
350 (-) |
0.780 |
4.2 X |
| TSLA (P) |
10494 |
320 (-) |
0.510 |
3.4 X |
| TSLA (P) |
10468 |
250 (-) |
0.147 |
4.6 X |
