China Specialist, Auto and Industrial Specialist

Victoria Li

Equity Bottom-Up

<ul>
<li>Share performance of XPEV.US has been hit by market's fear on Chinese stocks' delisting in US market.  Xpeng's share price fell from US$55 to US$43.8 in three trading days.</li>
<li>We believe it's a good timing for US investors to switch to 9868.HK from XPEV.US, as HK share performance was hurt as well and has brought a great buying opportunity.</li>
<li>Fundamentally, Xpeng's monthly delivery hit a new high in Nov. Lately, EV batteries shortage is hitting Xpeng and may lead to lower than expected monthly delivery. Buy opportunity.</li>
</ul>


Share performance of XPEV.US has been hit by market's fear on Chinese stocks' delisting in US market.  Xpeng's share price fell from US$55 to US$43.8 in three trading days.
We believe it's a good timing for US investors to switch to 9868.HK from XPEV.US, as HK share performance was hurt as well and has brought a great buying opportunity.
Fundamentally, Xpeng's monthly delivery hit a new high in Nov. Lately, EV batteries shortage is hitting Xpeng and may lead to lower than expected monthly delivery. Buy opportunity.


Xpeng: Buying Opportunity on Dual Short-Term Headwinds

Thematic (Sector/Industry)

<ul>
<li>China's overall auto retail sales remained week in November due to limit car storage in dealers (less supply), less promotions and interruptions from regional Covid lockdown/restrictions</li>
<li>Xpeng ranked No.1 among EV brands by delivering 15,613 new cars in November. P5 delivery is ramming up.</li>
<li>Zeekr 001 delivered 2,012 new cars in November, in line with latest market expectation.</li>
</ul>


China's overall auto retail sales remained week in November due to limit car storage in dealers (less supply), less promotions and interruptions from regional Covid lockdown/restrictions
Xpeng ranked No.1 among EV brands by delivering 15,613 new cars in November. P5 delivery is ramming up.
Zeekr 001 delivered 2,012 new cars in November, in line with latest market expectation.


<ul>
<li>Zeekr 001 production has been affected by insufficient supply of a certain components. The market is reducing its expectation on Nov delivery to around 2,000 cars.</li>
<li>On Guangzhou Auto Show(19th-28th Nov), we saw more new EVs would be launched in the coming year. BEV market competition is getting fierce.</li>
<li>Among to-be-launched new EVs, only Xpeng G9 might dilute market interest on Zeekr 001. However Zeekr 001 should have enough time to build up market reputation before it happens.</li>
</ul>


Zeekr 001 production has been affected by insufficient supply of a certain components. The market is reducing its expectation on Nov delivery to around 2,000 cars.
On Guangzhou Auto Show(19th-28th Nov), we saw more new EVs would be launched in the coming year. BEV market competition is getting fierce.
Among to-be-launched new EVs, only Xpeng G9 might dilute market interest on Zeekr 001. However Zeekr 001 should have enough time to build up market reputation before it happens.


Geely: Challenges from New EVs Are Limited

Research from EqualOcean, EqualOcean

EqualOcean

Research from EqualOcean

EqualOcean is an investment research firm and information service provider focusing on China's Technology, Automotive and Consumer Internet sectors. With unique research and due diligence methodology, we provide tailored insights into a wide range of industries and companies, empowering our clients' value-added decisions.

Founded in 2014, EqualOcean is headquartered in Beijing and has offices in Shanghai, Shenzhen and New York.

<ul><li>An eventful year - The semiconductor shortage is both accidental and inevitable</li><li>Dawn in 2022 - The crunch is likely to be relieved in 2022 but it will take years to fully meet the industry's needs. </li><li>Favored electric cars - Albeit auto brands can't get components on time, many of them are now prioritizing EV production. </li></ul>

An eventful year - The semiconductor shortage is both accidental and inevitableDawn in 2022 - The crunch is likely to be relieved in 2022 but it will take years to fully meet the industry's needs. Favored electric cars - Albeit auto brands can't get components on time, many of them are now prioritizing EV production. 

Tesla Can Deal with Supply Chain Shortage, Unlike Most Chinese Peers

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>As expected, <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a> replaces <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande (3333 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> after the close of trading on 3 December.</li>
<li>Using prices from the close on 19 November to cap the stocks, estimated one-way turnover at the rebalance is 4.50% and will result in a one-way trade of HK$3,208m.</li>
<li>Short interest on <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a> is over 8 days of ADV and short covering could take the stock higher in the short-term versus its peers.</li>
</ul>


As expected, Innovent Biologics Inc (1801 HK) replaces Evergrande (3333 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) after the close of trading on 3 December.
Using prices from the close on 19 November to cap the stocks, estimated one-way turnover at the rebalance is 4.50% and will result in a one-way trade of HK$3,208m.
Short interest on Innovent Biologics Inc (1801 HK) is over 8 days of ADV and short covering could take the stock higher in the short-term versus its peers.


HSCEI Index Rebalance: No Surprises Here as Evergrande Is Deleted

China

XPeng Inc. designs, produces, and distributes electric vehicles. The Company designs, develops, manufactures and markets smart smart electric vehicles, as well as finance, parts, and maintenance services. XPeng serves customers in China.

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XPeng (9868 HK)

Xpeng: Buying Opportunity on Dual Short-Term Headwinds

We believe it's a good timing for US investors to switch to 9868.HK from XPEV.US, as HK share performance was hurt as well and has brought a great...

Victoria Li

China Auto: Another Weak Month

China's overall auto retail sales remained week in November due to limit car storage in dealers (less supply), less promotions and interruptions...

Victoria Li

Geely: Challenges from New EVs Are Limited

Zeekr 001 production has been affected by insufficient supply of a certain components. The market is reducing its expectation on Nov delivery to...

Victoria Li

Tesla Can Deal with Supply Chain Shortage, Unlike Most Chinese Peers

BYD is positioned well, too. The global automotive industry is facing a deepening supply chain crisis

EqualOcean

HSCEI Index Rebalance: No Surprises Here as Evergrande Is Deleted

Innovent Bio will join the HSCEI after the close on 3 Dec while Evergrande will be deleted, no surprises. One-way turnover is 4.5% due to capping &...

Brian Freitas

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