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<Research>Citi Expects US Auto Tariff's Spillover Effect to Encourage German Carmakers' Fortified Co-op with CN Parts Suppliers
Recommend 49 Positive 81 Negative 35 |
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Benefiting from previous capacity layouts, most Chinese auto parts suppliers can mitigate the impact of tariffs by shifting production to the US or Mexico, Citi opined in its report. Among them, Minth (00425.HK), Joyson (600699.SH), and Foryou (002906.SZ) were the most resilient due to relatively low net tariff exposure, but the broker expected some indirect effects on the demand side and a rise in supply chain costs. Citi also anticipated the spillover effects of tariffs to prompt German carmakers to establish closer ties with Chinese providers of advanced driver assistance systems and technical solutions, improving their products, which could benefit the long-term growth prospects of ZHONGSHENG HLDG (00881.HK), MEIDONG AUTO (01268.HK), YONGDA AUTO (03669.HK), and BRILLIANCE CHI (01114.HK). In terms of stock recommendations, Citi's buy suggestions based on the China-Germany theme included BRILLIANCE CHI, ZHONGSHENG HLDG, MEIDONG AUTO, and YONGDA AUTO. Additionally, BYD COMPANY (01211.HK), LEAPMOTOR (09863.HK), GEELY AUTO (00175.HK), Hesai (HSAI.US), and HORIZONROBOT-W (09660.HK) were recommended for purchase. In the auto parts sector, Minth was the broker's top pick due to its attractive valuation, profit resilience from global layout, and humanoid robot plans. AAStocks Financial News |
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