Amid the “involution” of the electric vehicle (EV) price war in China, HSBC Global Research observed rising pricing pressure in the Chinese EV industry, lukewarm domestic demand, and a consumption trading down, with a preference for suppliers over OEMs in the industry.
China's passenger car sales recorded 1.9 million units in May 2025, with an EV penetration rate of about 53%, said the broker. From June 1 to 8, EV retail sales reached 202,000 units, up 4% compared to the same period in May, indicating an increment in EV penetration rate to approximately 58.8% (CPCA); and overall passenger car sales delivered 343,000 units, down 12% from the same period last month.
In wake of increasing challenges in industry pricing and sales volume, the broker preferred well-fenced suppliers over OEMs, including FUYAO GLASS (03606.HK)(600660.SH), CATL (03750.HK)(300750.SZ), and Tuopu (601689.SH). HSBC expected Fuyao Glass to see strong YoY profit growth in 2Q, given drastic improvement in soda ash prices, continued global auto glass market share gains and an increasing high value-added product mix.
HSBC Global Research was also optimistic about Tuopu in light of its higher exposure to leading local brands and market share leader companies (such as GEELY AUTO (00175.HK) and XIAOMI-W (01810.HK)), the recovery in production volumes of Tesla (TSLA.US) and Seres (601127.SH), and potential new catalysts related to Tesla's annual shareholder meeting and humanoid robots. Among OEMs, HSBC Global Research favored consolidation winners with increasing overseas exposure, such as BYD COMPANY (01211.HK)(002594.SZ) and Geely.
The following are HSBC Global Research's ratings and target prices for some companies:
Shares│Ratings│ TPs
FUYAO GLASS (03606.HK)│Buy│HK$68.2
Fuyao Glass (600660.SH)│Buy│RMB74.1
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CATL (03750.HK)│Buy│HK$359
CATL (300750.SZ)│Buy│RMB322
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TUOPU (601689.SH)│Buy│RMB76
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GEELY AUTO (00175.HK)│Buy│HK$26
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BYD COMPANY (01211.HK)│Buy│ HK$151
BYD (002594.SZ)│Buy│RMB430
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AAStocks Financial News
Website: www.aastocks.com
| SG Top Picks |
| Stock & Type |
Code |
Strike(Call Level) |
Last |
Effective Gearing |
| GEELY (C) |
17185 |
22.05 (-) |
0.112 |
4.5 X |
| GEELY (Bull) |
65332 |
14 (14.5) |
0.047 |
6.9 X |
| GEELY (Bull) |
65192 |
13 (13.5) |
0.066 |
4.9 X |
| GEELY (Bear) |
60827 |
20.5 (20) |
0.081 |
4.0 X |
| GEELY (Bear) |
63916 |
19 (18.5) |
0.055 |
5.9 X |
| CATL (C) |
16834 |
428.2 (-) |
0.070 |
7.0 X |
| CATL (C) |
16741 |
375 (-) |
0.113 |
6.9 X |
| CATL (C) |
16738 |
320 (-) |
0.247 |
5.7 X |
| TSLA (C) |
10688 |
420 (-) |
0.560 |
3.7 X |
| TSLA (C) |
10591 |
300 (-) |
0.930 |
3.7 X |
| TSLA (P) |
10692 |
280 (-) |
0.580 |
2.4 X |
| TSLA (P) |
10604 |
190 (-) |
0.087 |
4.2 X |
