Lyon: It is estimated that the sales of passenger cars in the mainland will drop by about 24% year-on-year in September. Maintains "high conviction to outperform the market" ratings for BYD COMPANY (01211) and GEELY AUTO (00175).

Lyon has released a research report stating that total orders for major brands in mainland China increased by 10% week-on-week last week, with the increase primarily coming from new vehicles, such as the BYD COMPANY (01211) Sea Lion 08 and LI AUTO-W (02015) MEGA. Orders from automakers without new models generally declined. As the market enters a seasonal peak, the bank expects demand for passenger vehicles to continue to rise slightly in September, driven by the introduction of new models and a more complete product lineup. However, the bank predicts that domestic passenger vehicle sales in September will be around 1.7 to 1.8 million units, a year-on-year decline of about 24%, mainly due to high baseline figures resulting from demand being pulled forward last year. The report indicates that orders for BYD Company Limited increased by 12% week-on-week, primarily driven by the Sea Lion 08, priced at RMB 229,900 to 279,900, with approximately 15,000 confirmed orders, as the launch price coincides with the pre-sale price. LEAPMOTOR (09863) and GEELY AUTO (00175) have no new vehicles, while Li Auto will hold a technology launch event next week, during which the bank expects it may announce around two new C/B series models and its latest intelligent driving large language model. Orders for Li Auto increased by 122% week-on-week, boosted by the revamped MEGA, priced at RMB 509,800, approximately RMB 50,000 lower than the previous version and with upgraded configurations, recording about 10,000 orders. However, the bank estimates that current MEGA production capacity is only around 3,000 to 4,000 units per month. The bank maintains a "Highly Confident Outperforming the Market" rating for BYD Company Limited and GEELY AUTO, with target prices of HKD 120 and HKD 30, respectively; for LEAPMOTOR, it maintains an "Outperforming the Market" rating with a target price of HKD 60.