China Galaxy Securities: Passenger car sales are expected to maintain a stable and rising trend.

China Galaxy Securities research report indicates that the domestic passenger car market showed a moderate recovery in May, with the consumer buying sentiment boosted by the Beijing Auto Show. The period of the auto show saw new cars entering the market for delivery and production capacity climbing, driving up the penetration rate of new energy vehicles. According to the China Passenger Car Association, the retail penetration rate of new energy passenger cars is expected to increase to 62.5% in May. The export market remains strong, with BYD and Chery both reaching new record highs in monthly exports, with new energy vehicles continuing to contribute to export growth. Looking ahead, the delivery of high-end new energy vehicle orders domestically and the continued ramp-up of production capacity are expected to contribute to structural growth, coupled with the continuation of strong export growth. Passenger car sales are expected to maintain a stable and upward trend.