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<Research>Citi: CN New Trade-in Subsidy Policy May Accelerate Mkt Consolidation of Entry-lv. Models; BYD COMPANY/ Others Have Better Scale Advantages
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China updated its trade-in subsidy policy for passenger vehicles this year, Citi Research issued a research report saying. Although the subsidy cap remains unchanged from last year, 2026 subsidies will be counted as a percentage of the vehicle price, unlike the fixed amounts in 2025. The broker believed that the new FY2026 subsidies for NEVs and ICEVs under the trade-in program may accelerate market consolidation in the entry-level vehicles (i.e., models with an average selling price below RMB160,000). Compared to other small automakers still operating at a loss, BYD COMPANY (01211.HK), GEELY AUTO (00175.HK) and GWMOTOR (02333.HK) may have greater scale advantages in the domestic market due to their cost control and leverage from higher-margin export operations. Citi Research also believed that this year's subsidies for commercial trucks and city buses remain unchanged from last year, which should benefit YUTONG BUS (600066.SH) and SINOTRUK (03808.HK). The broker also anticipated that PONY-W (02026.HK)'s H-shares will enter Southbound Trading of Stock Connects around mid-2026. AASTOCKS Financial News Website: www.aastocks.com |
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