Morgan Stanley expects the mainland automotive industry to rebound in the second quarter of this year, with passenger car demand potentially increasing by about 30%

JP Morgan released a research report on the mainland automotive industry, expecting that Geely Auto (00175.HK) and CNHTC-JNTC (03808.HK) will still outperform Bloomberg's market expectations this year despite challenges from rising industry demand and input costs. Additionally, the bank anticipates that NIO (09866.HK) and XPeng (09868.HK) will show the greatest upside potential in the second to third quarters or the second half of this year, driven by their own factors.

As for BYD (01211.HK) and Leapmotor (09863.HK), they are expected to gradually rebound after announcing their results in March, as the market has already digested more conservative and achievable profit forecasts. In contrast, Li Auto (02015.HK) may face greater pressure on its stock price due to the downside risks in market consensus profit forecasts.

The bank believes that the Chinese automotive industry will rebound in the second quarter, with passenger car demand expected to grow by about 30% quarter-on-quarter at both wholesale and retail levels, benefiting from a low base and, more importantly, an improvement in foot traffic before the Beijing Auto Show (April 24 to May 3). Furthermore, the adverse factors from downward adjustments in profit forecasts will become a thing of the past after the March earnings period