China Galaxy Securities: Under a high base, the "Golden September" auto market warms up moderately; October sales are expected to rebound temporarily.

China Galaxy Securities released a research report stating that in September, the auto market entered the traditional "Golden September" peak season. The release of family car-buying demand during the back-to-school season, the continuation of the trade-in policy, and a dense wave of new model launches drove a recovery in terminal demand. However, constrained by the high base of 2.241 million units set last year when consumers rushed to buy before subsidy reductions, the year-on-year decline remained significant, and overall demand release was relatively cautious. Looking ahead to October, the "Silver October" peak season combined with year-end sales push, continuously enriched new car supply, and exports expected to maintain high growth will jointly drive month-on-month sales upward in October. In terms of structure, fluctuating oil prices are suppressing the recovery of fuel vehicles, and the new energy penetration rate is expected to reach new highs. October sales are expected to stage a temporary rebound and warm up moderately compared with September, but demand release will be concentrated and short-lived, with considerable downward pressure after the holiday. The main views of China Galaxy Securities are as follows: In September, the auto market entered the traditional "Golden September" peak season. The release of family car-buying demand during the back-to-school season, the continuation of the trade-in policy, and a dense wave of new model launches drove a recovery in terminal demand. However, constrained by the high base of 2.241 million units set last year when consumers rushed to buy before subsidy reductions, the year-on-year decline remained significant, and overall demand release was relatively cautious. From September 1 to 27, national passenger vehicle retail sales totaled 1.258 million units, down 29% year-on-year and up 1% from the same period last month; cumulative retail sales this year reached 12.973 million units, down 22% year-on-year. From September 1 to 27, national passenger vehicle manufacturer wholesale volume was 1.474 million units, down 30% year-on-year and down 12% from the same period last month. Among them, new energy passenger vehicle retail sales were 827,000 units, down 20% year-on-year and up 2% from the same period last month, with a retail penetration rate of 65.7%; national passenger vehicle manufacturer new energy wholesale volume was 1.032 million units, down 11% year-on-year and down 7% from the same period last month, with a wholesale penetration rate of 70%. Recently, independent brands have successively released their September sales results. Leapmotor held steady above the 100,000-unit level for the third consecutive month, Xiaomi and XPeng together climbed to the 40,000-unit threshold, while HarmonyOS Intelligent Mobility and Li Auto retreated month-on-month. BYD Company Limited sold 463,600 vehicles in September, up 16.99% year-on-year and up 5.28% month-on-month, continuing its month-by-month upward trend. Geely sold 292,200 vehicles in September, achieving both year-on-year and month-on-month growth. Among them, Zeekr sold 37,200 vehicles, up 103.85% year-on-year. Overseas sales were 106,700 vehicles, up 162% year-on-year, exceeding 100,000 units for four consecutive months. Changan Deepal sold 30,200 vehicles in September, up slightly month-on-month; Qiyuan sold 46,500 vehicles, with the newly launched Qiyuan Q06 surpassing 35,000 orders on its first day; Avatr delivered 8,183 vehicles. Great Wall sold 114,900 vehicles in September, down year-on-year and up slightly month-on-month; Leapmotor delivered 105,700 vehicles in September, up 58.51% year-on-year, exceeding 100,000 units monthly for three consecutive months and firmly holding the top spot in new force deliveries; Li Auto delivered 31,800 vehicles in September, down 6.29% year-on-year and down 15.56% month-on-month, with cumulative third-quarter deliveries of 100,000 vehicles, up 1.7% month-on-month; HarmonyOS Intelligent Mobility delivered 37,500 vehicles in September, down 29.15% year-on-year and down 10.95% month-on-month, with AITO entering a transition period of cooperation model adjustments and facing short-term pressure; XPeng delivered 41,300 vehicles in September, up 5% month-on-month, with GX delivering 7,224 units in September, MONA L03 production capacity continuing to ramp up with September deliveries exceeding 10,000 units; Xiaomi delivered over 40,000 vehicles in September, with the newly launched extended-range model Xiaomi Pengcheng delivering over 10,000 units in its first month, becoming a core incremental driver; NIO delivered 37,400 vehicles in September, up 7.7% year-on-year and up 4.39% month-on-month. Among them, the NIO brand delivered 21,300 vehicles, up 55.3% year-on-year, the Onvo brand delivered 8,763 vehicles, down 42.5% year-on-year, and the Firefly brand delivered 7,327 vehicles, up 26.9% year-on-year. Looking ahead to October, the "Silver October" peak season combined with year-end sales push, continuously enriched new car supply, with domestic 2026 Li Auto i6 and others leading launches, and brands such as Li Auto, Leapmotor, XPeng, and smart unveiling new cars at the Paris Auto Show, exports expected to maintain high growth, will jointly drive month-on-month sales upward in October. In terms of structure, fluctuating oil prices are suppressing the recovery of fuel vehicles, and the new energy penetration rate is expected to reach new highs. October sales are expected to stage a temporary rebound and warm up moderately compared with September, but demand release will be concentrated and short-lived, with considerable downward pressure after the holiday. Biweekly Market Review By sub-sector, the biweekly changes in passenger vehicles, sales and services, commercial vehicles, motorcycles and others, and auto parts were +0.80%, +0.07%, -0.91%, -3.55%, and -3.57%, respectively. In terms of valuation, the price-to-earnings ratios of sales and services, motorcycles and others, auto parts, passenger vehicles, and commercial vehicles were 25.32x/24x/23.13x/21.99x/15.04x, respectively. The price-to-book ratios of motorcycles and others, auto parts, commercial vehicles, passenger vehicles, and sales and services were 3.13x/2.41x/1.92x/1.4x/1.27x, respectively. Risk warnings: 1. Risk of auto sales falling short of expectations; 2. Risk of policy effects falling short of expectations; 3. Risk of intensified industry competition; 4. Risk of humanoid Siasun Robot&Automation mass production falling short of expectations.