Periodic/Sector reports
Automobile: Weekly: June Sets Records As 1H26 Profit Alerts Split The Value Chain
Highlights
- Record June: NEV sales rose 23.6% yoy to 1.643m units (58.5% penetration); exports first topped 500,000. BYD led both.
- 1H26 profits split on the lithium surge: GWM -59-63% yoy; Ganfeng 787-966%, Tinci 908-1,020%.
- Launch wave favoured scale: BYD Denza Z and new Seagull, Li L6, Geely Cruiser 700, Xiaomi Sky Nomad vs Li Auto.
- Maintain MARKET WEIGHT. Top BUYs: CATL, BYD, Geely, Ganfeng, Tinci; SELL Li Auto. Downgrade GWM to HOLD (Target: HK$9.90).
Analysis
- June data: Record volumes, but the margin gap widens. June NEV sales rose 23.6% yoy to a record 1.643m units (58.5% of all sales) and NEV exports first topped 500,000. Volume is not the problem; profitability is where the sector separates.
- Domestic share ‒ BYD extends its lead. BYD took 22.3% of China's June NEV market (Tesla 5th for a second month); Nio retail jumped 62.6% yoy. Scale leaders keep compounding volume despite the price war — positive for BYD and Geely, negative for the long tail.
- Exports ‒ The structural growth leg. BYD led June NEV exports with 34.2% share (170,897 units) vs Tesla China's 7.2%, with a two-player structure (BYD plus Chery) forming — positive for globally geared parts names (Fuyao, Nexteer, Minth) and BYD's volume story.
- Batteries ‒ China keeps the global lead. 5M26 battery installations kept Chinese makers ahead globally (CATL, BYD, EVE); global June EV sales rose about 7% yoy. This supports our OVERWEIGHT rating on the battery segment, as the cell volume base continues to expand.
Highlights
- Record June: NEV sales rose 23.6% yoy to 1.643m units (58.5% penetration); exports first topped 500,000. BYD led both.
- 1H26 profits split on the lithium surge: GWM -59-63% yoy; Ganfeng 787-966%, Tinci 908-1,020%.
- Launch wave favoured scale: BYD Denza Z and new Seagull, Li L6, Geely Cruiser 700, Xiaomi Sky Nomad vs Li Auto.
- Maintain MARKET WEIGHT. Top BUYs: CATL, BYD, Geely, Ganfeng, Tinci; SELL Li Auto. Downgrade GWM to HOLD (Target: HK$9.90).
Analysis
- June data: Record volumes, but the margin gap widens. June NEV sales rose 23.6% yoy to a record 1.643m units (58.5% of all sales) and NEV exports first topped 500,000. Volume is not the problem; profitability is where the sector separates.
- Domestic share ‒ BYD extends its lead. BYD took 22.3% of China's June NEV market (Tesla 5th for a second month); Nio retail jumped 62.6% yoy. Scale leaders keep compounding volume despite the price war — positive for BYD and Geely, negative for the long tail.
- Exports ‒ The structural growth leg. BYD led June NEV exports with 34.2% share (170,897 units) vs Tesla China's 7.2%, with a two-player structure (BYD plus Chery) forming — positive for globally geared parts names (Fuyao, Nexteer, Minth) and BYD's volume story.
- Batteries ‒ China keeps the global lead. 5M26 battery installations kept Chinese makers ahead globally (CATL, BYD, EVE); global June EV sales rose about 7% yoy. This supports our OVERWEIGHT rating on the battery segment, as the cell volume base continues to expand.
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