According to a research report from UBS, the share prices of ZHONGSHENG HLDG (00881.HK)  -0.180 (-1.360%)    Short selling $145.05M; Ratio 49.293%   and YONGDA AUTO (03669.HK)  -0.060 (-2.667%)    Short selling $2.56M; Ratio 21.099%   have recently rebounded by about 20% and 5%, respectively.

The broker attributed their rebounds to China's "anti-involution" policies leading to market expectations for improved profit margins in new car sales, news of some dealers closing down sparking speculation about future industry consolidation, and investors snapping up stocks with low valuations.

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If the policies can effectively curb the industry's price wars, UBS predicted that dealers' profitability could see noticeable improvement. However, market demand remains highly uncertain, with sales of traditional luxury car brands in China continuing to be sluggish.

While Chinese auto brands become more competitive, the outlook for traditional luxury car demand is still shrouded in mist. In addition, the anti-involution policies may lead to narrower end-user discounts, which could further dampen demand.

UBS kept a Sell rating on both ZHONGSHENG HLDG and YONGDA AUTO, as it was still too early to assess the potential extent of their earnings improvements.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-08-01 16:25.)