Soochow: The market in Q4 will re-focus on intelligent investment opportunities, with XPENG-W (09868) being the top choice.

Soochow released a research report stating that the market will re-focus on investment opportunities in intelligence in Q4. The bank believes that Hong Kong-listed stocks are better than A-shares, software is better than hardware, and B-end is better than C-end. Among the targets that can currently be bought in A-H shares, the preferred combination is XPENG-W (09868) + HORIZONROBOT-W (09660) + CAOCAO INC (02643). The report states that since the AI market in 2023, every late-stage market after each round of AI market will expand to intelligence. This is because intelligence is essentially the important application of AI in the physical world, and Soochow believes that it should be an application that exceeds expectations in the next 3-5 years! From the perspective of intelligence, AI smart vehicles have already reached Level 4 capabilities (using Robotaxi/van as an example). 2) The catalyst for intelligence in Q4 continues! Tesla's V14 version release accelerates the ability of Robotaxi to operate externally, Xiaopeng's October Tech Day may release more details of Robotaxi mass production plan for 2026, Xpeng plans to add about 500 7th generation unmanned vehicles in Q4 and is expected to achieve positive gross profit in the fourth quarter, WeRide continues to accelerate its overseas progress, and Horizon HSD is officially listed in November, etc. In 2026, the bank expects all core players to accelerate their entry into L4, which will be a big year for Robotaxi. The bank believes that the similarity between this Q4 and last year's Q4 is the expansion of AI, but the difference lies in: 1) Last year's Q4 emphasized the resonance between automotive logic and AI logic, while this year's Q4 emphasizes the deduction of AI logic. The core behind it is: After a year of development, the capabilities of all players are improving, especially the first-tier players are moving towards L4, and the industry's deliverability is getting stronger. 2) Last year more emphasis was placed on hardware opportunities and C-end sales-driving, while this year may focus more on software opportunities and breakthroughs in the B-end.