Auto stocks experienced a broad-based rally. As of the time of writing, XPENG-W (09868) rose 6.18% to HK$80.75; LEAPMOTOR (09863) increased by 5.33% to HK$52.6; BYD COMPANY (01211) climbed 4.75% to HK$98.05; and GEELY AUTO (00175) advanced 4.79% to HK$17.71. Founder Securities released a research report stating that the Central Economic Work Conference and the Ministry of Finance have clarified policies to optimize the "two new" initiatives, with many regions selecting platform enterprises for vehicle replacement programs. According to media disclosures, national subsidies are expected to continue until 2026, offering a maximum subsidy of 30,000 yuan per vehicle, focusing on phasing out old, high-emission vehicles while also raising the subsidy thresholds for new energy vehicles and the pure electric range of hybrid models. The report pointed out that after the expiration of replacement subsidies in many regions, a typical year-end surge in sales did not materialize. Coupled with the gradual phase-out of the new energy vehicle purchase tax exemption policy starting in 2026, pressure on the automotive market is expected to intensify further during the traditionally slow first quarter of 2026. However, positive signals continue to emerge from the policy side. Following the release of compliance guidelines for pricing behavior in the automotive industry by the State Administration for Market Regulation, automakers such as BYD and XPeng have responded actively, leading to a moderation in industry price competition and a continuous optimization of the competitive landscape. Simultaneously, some cities have begun preparations for the new national subsidy program, and the industry is anticipated to see the implementation of detailed policy rules and supplementary support measures, which should provide additional catalysts. The investment value of leading automakers at current levels is becoming prominent, warranting attention to subsequent policy-driven improvements in market sentiment.
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