Kingsway Financial Services
Group Limited
SEHK & HKFE Participant     SFC CE No ADF346
Market Review (2025-09-30)

Market Review (2025-09-30)

China EV Sector – Strong September sales

 

Various Chinese EV makers have published their September sales numbers.  Below are a few highlights of the month:

Policy driven – September is traditionally a high season for car sales, and the expectation that subsidies on EV purchase will be halved in 2026 has also prompted potential buyers to push forward their buying decision.  

Traditional makers also saw record EV sales - Besides the EV-centric brands, a number of traditional car makers such as Geely, ChangAn and GWM also registered record monthly sales.

Additional capacity sparked higher sales – Nearly 80 new vehicle models were launched during the month.  Meanwhile, automakers such as Leapmotor and Xiaomi had new production capacity coming online, which was a key reason for their record-high deliveries.

BYD saw first dip in 2025 - It is also noted that BYD (1211 HK, HK$109.40, HK$403bn) posted the highest monthly delivery in 2025 despite a 5.5% YoY decline after two consecutive months of flat MoM changes.

Our view: The strong momentum may carry into the last quarter of the year likely driven by the expected cut in EV subsidies as well as the wealth effect of the recent run in the stock market.  We are optimistic about the near term sales but the market has begun to price in the possible front-load purchase which may affect the performance in early 2026.   In terms of valuation, BYD is trading at about 18.1x forward PE while Li Auto (2015 HK, HK$99.60, HK$213bn) is at about 28.9x forward PE, both valuations are looking quite rich.