CITIC Securities: The automotive sector is expected to continue to rise, and the physical AI sector already has cost-effective configuration.

CITIC Securities research report stated that from May 1 to 10, a total of 407,000 passenger cars were sold nationwide; of which, 226,000 were new energy vehicles, with a penetration rate of 55.5%. The holiday season affected sales, but month-on-month recovery trends are still evident, and high oil prices are driving the maintenance of a high penetration rate for new energy vehicles. CITIC Securities believes that it is necessary to actively position in two types of market trends at present: 1. the export of new energy passenger vehicles is a strong alpha, with domestic demand expected to bottom out after the first quarter report and rising raw material prices, a large number of new car launches improving domestic demand month-on-month combined with high export prosperity, high-end and new developments in intelligent driving, robots, among others, supporting valuation core support, the entire vehicle sector's low valuation is expected to usher in a more sustainable uptrend; 2. the physical AI sector currently has a competitive price-performance ratio, with a relatively large adjustment since the beginning of the year, and the middle of the year is a key catalyst time point for Tesla and related technologies, including the release and mass production of Tesla Optimus V3, Robotaxi scale operation, and the listing of Yushu. In addition, favorable winds and improved liquidity are expected to further strengthen the upward trend.