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2026-10-23 13:56:35 Citi published a research report stating that the premium of CATL (03750.HK) H shares over the unweighted average price-to-earnings ratio of BYD COMPANY (01211.HK) and FUYAO GLASS (03606.HK) H shares has narrowed significantly from about 45% to 49% two to three weeks ago to 36% last week, and further narrowed to 16% after CATL's 3Q results missed expectations. For A shares, the same indicator stabilized in early September before falling to a 31% discount this week, compared with a 20% discount last week, reflecting that CATL's valuation adjustment was faster than that of FUYAO GLASS and BYD COMPANY. Based on channel checks and weak electric vehicle orders, the bank believes the auto sector's relative market volatility sensitivity (beta) may weaken in 4Q26 due to softer electric vehicle sales in October. Demand may also cool sharply QoQ in 1Q27 due to the Lunar New Year impact. In addition, internal combustion engine vehicle inventory reached 4.4 months as of the end of September, and the bank expects significant risks in restocking for fuel vehicles. Regarding the 3Q earnings preview, the bank expects BYD COMPANY's third-quarter net profit (excluding foreign exchange effects and BYD Electronic) to be about RMB12.95 billion; GEELY AUTO (00175.HK) third-quarter net profit (excluding foreign exchange effects) to be about RMB5.3 billion; CHERY AUTO (09973.HK) third-quarter net profit to be about RMB5.5 billion, with core profit at about RMB5.7 billion after excluding about RMB1 billion in foreign exchange losses and about RMB800 million in investment income from CXMT; and GWMOTOR (02333.HK) to report third-quarter gross margin below market expectations due to limited improvement in domestic product mix and elevated raw material/memory costs inflation. Receivables related to Russian scrappage tax rebates may also face further delays. The bank recently also lowered TP for FUYAO GLASS, HESAI-W (02525.HK) (HSAI.US) and BAIC MOTOR (01958.HK). HESAI's TP was cut to USD22/HKD21.4, while BAIC MOTOR's TP was reduced to HKD0.76. (su/ad)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |