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<Research>M Stanley: CN New Car Subsidy Policy Tweak Favors High-End Car Sales; Li Auto, Nio, Zhongsheng Preferred
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China's National Development and Reform Commission (NDRC) announced yesterday (30th) the continuation of the new car subsidy policy next year, Morgan Stanley said in its report. New energy vehicles (NEVs) and internal combustion engines vehicles (ICEVs) will receive subsidies of RMB20,000 and RMB15,000 per vehicle, respectively. Local governments will provide trade-in subsidies of RMB15,000 and RMB13,000 per vehicle for these two types of vehicles. The relevant policies aligned with the broker's expectations. The new policy took car prices into account, meaning subsidies for cars priced below RMB150,000 will decrease YoY, while vehicles priced between RMB150,000 and RMB200,000 can fully enjoy the benefits. High-end car models are unaffected by the subsidy policy adjustment. The broker preferred companies offering high-end car models, such as LI AUTO-W (02015.HK), NIO-SW (09866.HK), and companies collaborating with Huawei. High-end brand auto dealers like ZHONGSHENG HLDG (00881.HK) will also be favored. Mass-market brands may face stronger headwinds from subsidy reduction on top of 5% NEV purchase tax increase. AASTOCKS Financial News Website: www.aastocks.com |
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