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Hong Kong Stocks: BYD, Li Auto Shares Rise on China’s Vehicle Sales Recovery

Hong Kong Stocks: BYD, Li Auto Shares Rise on China’s Vehicle Sales Recovery

In major news on Hong Kong stocks, shares of BYD Co. Limited (HK:1211) and Li Auto, Inc. (HK:2015) rose today as China’s vehicle sales showed recovery signs in March. According to the China Passenger Car Association (CPCA), the nationwide retail sales of new-energy vehicles (NEV), including both EVs and plug-in hybrids, surged by 29.5% year-over-year to 709,000 units. In March, NEVs accounted for 41.5% of total passenger car sales.

BYD shares gained over 2%, while Li Auto rose by 3% today as of writing.  

Signals of Demand Resurgence

The latest data from CPCA signals a turnaround in vehicle demand in China, leading to a steady start to this year. For the first quarter of 2024, EV sales totalled 1.03 million units, marking a 14.7% increase compared to the previous year. However, compared to the previous stellar growth, the Q1 2024 growth rate represents the slowest quarterly expansion since the second quarter of 2023.

The retail sales of passenger cars in China skyrocketed by 53% compared to the previous month, driven by high consumer demand, which bounced back following the Lunar New Year in February.

BYD and Tesla Fight for EV Supremacy

According to CPCA data, BYD was the top EV seller in March, pushing Tesla (NASDAQ:TSLA) back to second place. BYD had previously surpassed the U.S. EV giant as the world’s leading seller of EVs in the last quarter of 2023. Nonetheless, BYD surrendered the top spot to Tesla in the first quarter of 2024, due to lower-than-anticipated sales.

BYD sold 301,631 units of EVs in March, followed by Tesla, which sold 89,064 vehicles made in China. It is worth noting that Tesla’s numbers were up by more than 100% in March compared to February.

Meanwhile, Li Auto sold 28,984 units, marking a 39.2% year-over-year increase. However, March deliveries fell short of the company’s target to achieve monthly sales of 50,000 units, mainly after the company received bad reviews for the styling of its electric Mega MPV. Li Auto is doubling down on its efforts to strengthen its sales in the competitive market and is targeting to sell 800,000 units in 2024. This will mark a growth of 127.5% year-over-year.

Is BYD Stock a Good Buy?

According to TipRanks, 1211 stock has received a Moderate Buy rating based on eight Buys, one Hold, and one Sell recommendation. The BYD Co. share price target is HK$263.36, which implies an upside of 30.4% from the current trading level.

What is the Price Target for Li Auto?

On TipRanks, 2015 stock has been assigned a Strong Buy rating, backed by Buy recommendations from all the five analysts covering the stock. The Li Auto share price target is HK$202.64, which is 68% above the current price level.