HK Stock Market Move | Car stocks continue to decline. China's car exports to the US are relatively small. Institutions say that the profit margins of car companies in Q1 will further differentiate.

Car stocks continued to decline. As of the time of writing, LI AUTO-W (02015) fell by 7.7% to HK$74.95; XPENG-W (09868) fell by 7.13% to HK$62.55; Great Wall Motor (02333) fell by 4.9% to HK$10.84; Guangzhou Automobile Group (02238) fell by 3.69% to HK$2.61. Huafu Securities' new energy vehicle industry analyst believes that in 2024, Chinese car exports to the United States only accounted for 1.8% of China's total car exports, with a market share in the US of less than 0.6%. Most of these exports are models produced by Sino-US joint ventures in China and then sold back to the US. The impact of US tariffs on Chinese car exports is not significant, more of an emotional impact. CMB International estimates that the average discount for the entire auto industry in March decreased by 0.1 percentage point month-on-month, mainly due to the reduction in discounts by some German brands. Despite retail sales in the industry exceeding expectations in March, top brands have maintained relatively stable discounts by launching new models last month. The bank predicts that the profit capabilities of Chinese car companies in 1Q25 will further differentiate, with Xiaopeng and Geely likely to outperform their peers due to strong sales performance in 1Q25 and reduced discounts. More new models are planned to debut at the Shanghai Auto Show or be launched or delivered in April, which is expected to drive growth in new energy vehicle sales in 2Q25.