--- title: "CMSI: Pessimistic Expectations on Domestic Demand Overdraft This Year Already Priced In, Auto Stocks Enter Best Two-Year Positioning Window" type: "News" locale: "en" url: "https://longbridge.com/en/news/293416662.md" description: "China Merchants Securities International reports that pessimistic expectations regarding China's domestic auto demand overdraft are already priced in, marking a two-year optimal positioning window. The sector is expected to shift from weak domestic demand to stable growth by 2027. Top stock picks include Geely Auto, BYD Company, and XPeng-W, favored for their overseas expansion and product mix improvements. The broker also recommends auto parts leaders Mintth Group, Fuyao Glass, and Weichai Power due to high overseas exposure and new business expansions." datetime: "2026-07-22T03:45:52.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/293416662.md) - [en](https://longbridge.com/en/news/293416662.md) - [zh-HK](https://longbridge.com/zh-HK/news/293416662.md) generator: "portal-rs" --- # CMSI: Pessimistic Expectations on Domestic Demand Overdraft This Year Already Priced In, Auto Stocks Enter Best Two-Year Positioning Window China Merchants Securities International issued a report stating that domestic automobile demand is expected to improve moderately in 2H25, while the industry is projected to shift from “weak domestic demand and strong overseas expansion” to “stable domestic demand and strong overseas expansion” in 2027. Pessimistic expectations stemming from domestic demand overdraft this year have already been reflected in valuations, and the sector is now entering the best positioning window over a two-year horizon. The broker is particularly optimistic on leaders in domestic demand and overseas expansion, with GEELY AUTO (00175.HK) -0.670 (-3.598%) Short selling $152.45M; Ratio 19.556% as its top pick, recommending BYD COMPANY (01211.HK) -1.850 (-2.060%) Short selling $454.41M; Ratio 31.601% , and suggesting investors pay attention to XPENG-W (09868.HK) -0.400 (-0.771%) Short selling $186.15M; Ratio 23.889% . The report noted that the policy-driven overdraft of domestic demand in 2025 was mainly reflected in 1H25. The YoY decline in 2H25 is expected to narrow significantly to around 10%, while the industry is likely to see domestic demand bottom out alongside a mild recovery driven by policy support. Over the past few weeks, the industry has intensively rolled out four key policies aimed at regulating industry order and promoting structural upgrades. Although the likelihood of reversing the industry trend remains limited, these policies are expected to provide downside support. The broker remains relatively optimistic on the industry in 2027 and believes the current period represents a buying zone near the bottom of a two-year cycle. On domestic demand, the overdraft effect has faded and industry growth is expected to return to a stable and gradually improving trend. On overseas expansion, leading companies such as BYD COMPANY and GEELY AUTO are expected to sustain high growth next year as localized production accelerates and product line rollouts expand. Current market pessimism regarding the domestic demand overdraft in 1H25 has already been fully reflected in share prices. From a two-year cycle perspective, the sector is currently at its trough and offers the best medium- to long-term positioning opportunity. Among automakers, the broker's top pick is GEELY AUTO, with recent focus on the company's capacity cooperation in Europe with Volvo and Ford factories, marking a key step toward localized European production. Exports exceeded 100,000 vehicles in June, while ZEEKR and Lynk & Co jointly drove improvements in the new energy vehicle and premium product mix. BYD COMPANY is also recommended, as its ultra-fast charging strategy reinforces its domestic market foundation, while overseas factory capacity started increasing from 2Q25. The export ratio remains above 40%, plug-in hybrid recovery is relatively strong, and there is still room for upward revision in overseas and premium brands. XPENG-W remains a medium- to long-term focus, with three new models in 2H25 expected to support sales recovery, while Robotaxi and robotics businesses may provide AI-driven valuation upside. In the auto parts sector, the broker continues to favor MINTH GROUP (00425.HK) +0.560 (+2.056%) Short selling $14.21M; Ratio 16.562% , FUYAO GLASS (03606.HK) -0.700 (-1.269%) Short selling $48.26M; Ratio 31.013% , and WEICHAI POWER (02338.HK) +1.020 (+3.172%) Short selling $31.25M; Ratio 5.813% , which have relatively high overseas revenue exposure, improving ASP, or clear expansion into new AIDC businesses.(ha/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-07-21 16:25.) ### Related Stocks - [00175.HK](https://longbridge.com/en/quote/00175.HK.md) - [00425.HK](https://longbridge.com/en/quote/00425.HK.md) - [GELYY.US](https://longbridge.com/en/quote/GELYY.US.md) - [03606.HK](https://longbridge.com/en/quote/03606.HK.md) - [GELHY.US](https://longbridge.com/en/quote/GELHY.US.md) - [02338.HK](https://longbridge.com/en/quote/02338.HK.md) - [000338.CN](https://longbridge.com/en/quote/000338.CN.md) - [600660.CN](https://longbridge.com/en/quote/600660.CN.md) - [01211.HK](https://longbridge.com/en/quote/01211.HK.md) - [002594.CN](https://longbridge.com/en/quote/002594.CN.md) - [09868.HK](https://longbridge.com/en/quote/09868.HK.md) - [XPEV.US](https://longbridge.com/en/quote/XPEV.US.md) - [F.US](https://longbridge.com/en/quote/F.US.md) - [ZK.US](https://longbridge.com/en/quote/ZK.US.md) - [80175.HK](https://longbridge.com/en/quote/80175.HK.md) - [HYDD.SG](https://longbridge.com/en/quote/HYDD.SG.md) - [BYDDY.US](https://longbridge.com/en/quote/BYDDY.US.md) - [BYDDF.US](https://longbridge.com/en/quote/BYDDF.US.md) - [81211.HK](https://longbridge.com/en/quote/81211.HK.md) - [F-B.US](https://longbridge.com/en/quote/F-B.US.md) - [F-C.US](https://longbridge.com/en/quote/F-C.US.md) - [F-D.US](https://longbridge.com/en/quote/F-D.US.md) ## Related News & Research - [Leapmotor launches A05, taking aim at entry EV market led by Geely Xingyuan](https://longbridge.com/en/news/295547307.md) - [Three Chinese automakers: BYD, Geely and Chery break into the global top 10](https://longbridge.com/en/news/295050005.md) - [Geely Auto lifts export goal to 920,000 as overseas becomes only growth engine](https://longbridge.com/en/news/296116470.md) - [Geely Auto reshuffles top management to advance One Geely strategy](https://longbridge.com/en/news/296082851.md) - [Geely teases Monjaro EM-i, its first global hybrid D-SUV, with Egypt debut in late August](https://longbridge.com/en/news/296443409.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**