Daihua Jixiang: The US-Iran conflict drives up oil prices and accelerates the popularization of electric vehicles

Daiwa Capital Markets published a report stating that the US-Iran conflict has driven up oil prices, accelerating the adoption of electric vehicles, with limited short-term cost impacts on the domestic automotive industry. Overall, there is basically no impact on China's exports to Europe. If oil prices continue to rise by $15 to $20 per barrel, it could widen the gap between fuel and electricity costs by 20% to 30%, and increase the penetration rate of electric vehicles in China by 2 to 3 percentage points in the short term.

Additionally, the firm mentioned that most automakers' delivery volumes in February fell as expected due to the Lunar New Year holiday, with strong export growth offsetting weak domestic demand. Furthermore, BYD (01211.HK) released its second-generation blade battery, megawatt-level charging technology, and several new models yesterday (5th), but the firm believes that since competitors are also launching comparable technologies, it is expected that this will not reverse the trend of declining sales in the short term.

In the industry, the firm's preferred buy targets include CATL (300750.SZ), Ganfeng Lithium (01772.HK), Minth Group (00425.HK), and Geely (00175.HK), while Li Auto (02015.HK) is the preferred sell target.

Stock | Rating | Target Price (HKD)

CATL (300750.SZ) | Buy | 550 RMB

Ganfeng Lithium (01772.HK) | Buy | 90 HKD

Minth Group (00425.HK) | Buy | 62 HKD

Geely (00175.HK) | Buy | 36 HKD

Li Auto (02015.HK) | Sell | 50 HKD