Overseas sales of China’s Auto OEM to grow 61% in 2023; BYD, Xpeng top picks – Goldman Sachs
DATA VIEWS & ANALYSIS
Overseas sales of China’s Auto OEM to grow 61% in 2023; BYD, Xpeng top picks – Goldman Sachs
DATA VIEWS & ANALYSIS

Overseas sales of China’s Auto OEM to grow 61% in 2023; BYD, Xpeng top picks – Goldman Sachs

 

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Driven by leading technology and product capabilities, overseas sales for China’s Auto OEM from 2022 to 2030 to increase from 2.7 million units to 8.5 million units, with the figure this year expected to grow 61% year over year to 4.3 million units, said Goldman Sachs in a note.

Investors will be concerned about further pricing pressure on carmakers after Tesla started price cuts in January, and under the base case scenario, the potential impact on BYD Company’s operating profit in 2024 could range from a 19% drop to a 22% increase, while that for Xpeng Motors could range from a 46% drop to a 39% rise.

As NEVs adopt more technological features, competition is likely to evolve from near-term themes of range, safety and cost to medium-term themes of intelligent cabins and advanced driver assistance systems and long-term themes of branding and distribution, it said.

Goldman’s top picks in the sector are BYD and Xpeng, both initiated at Buy rating. BYD’s overseas expansion and brand premiumization could bring a higher return on equity and Xpeng’s new models could support the company’s revenue and gross profit growth, it said.