By Yi Wei Wong
Shares of Chinese electric vehicle stocks declined in early Friday trade after the auto companies released their August delivery reports.
The Hong Kong-listed shares of NIO Inc. and XPeng Inc. fell 2.8% and 3.0%, respectively, with Xpeng touching HK$67.15, its lowest level since it listed in Hong Kong. Meanwhile, NIO’s Singapore-listed shares slid 1.9%.
After the market closed Thursday, NIO said August deliveries rose 82% from a year ago, while XPeng reported deliveries rose 33% on year.
Although these numbers showed an improvement from a year earlier, investors were waiting for a sharp rise in deliveries in the last week of August to signal a change in the outlook for the sector, but that didn’t happen, Citi said.
The weak outlook for the Chinese electric-vehicle sector is unlikely to change due to fresh Covid-19 lockdowns in various cities and worries over China’s economic growth, writes Citi analyst Jeff Chung in a note.
In a separate note written last week, Citi analysts said investors were worried that seasonal high electric-vehicle demand in September and October could be dented by China’s weak economic growth.
Since current uncertainties will likely persist, market sentiment is unlikely to turn positive unless improved demand is seen in the first half of September, which happens to be “in line with historical high season seasonality,” the Citi analysts add.
Write to Yi Wei Wong at firstname.lastname@example.org