China Autos & Shared Mobility_ What are investors focused on_

Summary of the Conference Call on China Autos & Shared Mobility Industry Overview - Sector Focus: The discussion centers around the auto sector in China, particularly electric vehicles (EVs) and shared mobility solutions. Investor interest has increased following a recent market bounce, but there is uncertainty regarding the sustainability of this interest due to fragile macroeconomic conditions [1][2]. Key Insights - Investor Sentiment: There is a notable lack of conviction among investors, leading to a focus on short-term trading opportunities rather than long-term structural stories. The investor base is heavily skewed towards hedge funds (HF), while long-only (LO) investors remain cautious [2]. - Seasonal Sales Expectations: Anticipated better-than-expected sales in Q4, supported by local government subsidies for new energy vehicles (NEVs) and a strong pipeline of EV models, are contributing to improved sector sentiment [2]. - Pricing Competition: The ongoing price competition among EV manufacturers, particularly between domestic brands like Tesla, BYD, and Huawei, is a significant concern. There is skepticism about whether the recent truce in pricing strategies is sustainable [3]. Company-Specific Discussions - BYD: Continues to dominate discussions, accounting for about one-third of investor conversations. While the sentiment remains positive, it has cooled compared to previous months due to raised expectations for vehicle volume and profitability [5]. - NIO: Initially generated excitement around the L60 launch, but interest has waned. Investors are more concerned about supply issues than demand, with a conservative delivery guidance for December [5]. - XPeng: The upcoming launch of the P7+ is generating interest, especially with the successful introduction of the M03 model. The P7+ is crucial for maintaining margins [6]. - Li Auto: Viewed as a blue-chip among EV startups, but investors are waiting for clarity on battery electric vehicle (BEV) initiatives before committing further [6]. - Geely: Recent performance has led to a tripling of inquiries, driven by the successful launch of the Galaxy E5, with over 20,000 units delivered shortly after launch [8]. - Great Wall Motor: Recognized as a proxy for emerging markets, with expectations of 10% sequential growth in volume sales, although overseas sales may remain subdued until Q4 [8]. Additional Observations - ZEEKR: The newly launched 7X SUV has received over 58,000 pre-sale orders, but investor confidence in its ability to drive significant volume growth remains low due to competitive pressures [7]. - Market Dynamics: The auto sector is experiencing a mix of beta-driven and idiosyncratic moves, with investors looking to capitalize on trading opportunities as the year ends [1][2]. Conclusion The China auto sector is at a crossroads, with potential for seasonal sales boosts and new model launches, but overshadowed by macroeconomic fragility and intense pricing competition. Investors are cautiously optimistic, focusing on short-term opportunities while awaiting clearer signals for long-term investments.