Shares of Chinese electric-vehicle makers rose in premarket trading, boosted by positive monthly sales numbers and expectations of rising demand.
Li Auto stock rose 9%, while XPeng Inc. $(XPEV)$ and NIO Inc. $(NIO)$ gained as much as 5.55% and 5.64%, respectively.
Li Auto demonstrated "strong operational resilience," with sales numbers for May released last week showing a near tripling in delivery volume from the previous month, Bocom International analysts said in a research note. "We expect emerging [original equipment manufacturers] to see sequential recovery ahead as [the] Shanghai lockdown ends," they said.
Citi analysts picked Li Auto as a key beneficiary among EV makers of strong post-lockdown demand, citing in a note that the company's management has a strong order outlook thanks to the coming launch of the L9 model.
In another note, Citi analysts highlighted that BYD's EV sales more than doubled in May from a year earlier, calling the result strong and in line with estimates.
Citi also highlighted the tax exemptions and subsidies for EV purchases offered by the Chinese government and said rising fuel prices could encourage more customers to opt for EVs.
Citi maintained its buy rating and US$26.80 target price on Li Auto's American depositary receipts. It kept a buy rating on BYD, with a target price of 587 Hong Kong dollars (US$74.82) on the company's H shares.
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