Despite a significant profit surge, SAIC Motor's stock saw only a marginal increase, highlighting a broader valuation challenge faced by listed automakers.
This occurred shortly after SAIC Motor released a market-stunning earnings forecast. On the evening of January 15, SAIC Motor announced that it expects its net profit attributable to shareholders for 2025 to surge by 438% to 558% year-on-year.
"We also find it hard to explain; the results we announced are quite decent," a representative from SAIC Motor's securities department stated, adding that the company believes it is undervalued in the capital markets.
As a leading domestic listed automaker, the mismatch between SAIC Motor's market valuation and its performance is a common frustration shared by many peers. Several auto industry executives expressed that the capital markets should re-evaluate the value of their respective companies.
SAIC Motor is a state-controlled listed automaker. In recent years, from the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council to local SASACs, there has been a consistent requirement for state-controlled listed companies to strengthen market value management.
The problem lies in the relative weakness of state-controlled listed automakers in the capital markets. As of the close on January 16, SAIC Motor ranked first among state-controlled listed automakers with a market capitalization of 172.3 billion yuan, but BYD's market cap reached 874 billion yuan, indicating a significant gap.
Investors frequently inquire about value management strategies, yet two leading automakers remain trading below net asset value.
"How does the company plan to manage its market value effectively?" Recently, several investors questioned SAIC Motor on interactive platforms, asking if its so-called value management is merely lip service.
Investors raised these questions primarily based on SAIC Motor's historical stock performance. Wind data shows that SAIC Motor's stock price fell by 26.37% cumulatively throughout 2025.
Furthermore, SAIC Motor's stock continues to trade below its net asset value per share. Its closing price on January 16 was 14.99 yuan per share, significantly lower than the most recent net asset value attributable to shareholders of 25.71 yuan per share.
A stock trading below net asset value (P/B ratio < 1) refers to a situation where its closing price is lower than the audited net asset value per share from the last fiscal year. A long-term "below NAV" stock is one whose closing price has remained below this benchmark for 12 consecutive months.
The two A-share listed automakers in a long-term "below NAV" situation are SAIC Motor and GAC Group. China's Securities Regulatory Commission's "Listed Company Supervision Guideline No. 10 — Market Value Management" requires companies in long-term "below NAV" status to disclose plans for enhancing their valuation.
On February 27 and April 30, 2025, GAC Group and SAIC Motor respectively released their "2025 Valuation Enhancement Plans," with SAIC Motor mentioning its aim to "strive to improve the performance level of the company's market value management."
Currently, both SAIC Motor and GAC Group still trade below NAV. As of the close on January 16, 2026, their price-to-book (P/B) ratios were 0.58 and 0.76 times, respectively, both below the industry average.
Wind data shows that as of January 16, 2026, the P/B ratios for the Shenwan industry classification's automotive sector and the passenger vehicle sub-sector were 2.92 and 2.23 times, respectively.
Guideline No. 10 stipulates that long-term "below NAV" companies with P/B ratios lower than their industry average must provide a special explanation regarding the implementation of their valuation enhancement plans during their annual results briefings.
When approached for comment, GAC Group declined. The SAIC Motor securities department representative said that if shareholders are concerned about the implementation of the "Valuation Enhancement Plan," they can communicate during the company's earnings conference calls.
The effectiveness of some value management measures has been limited, leaving state-controlled automakers in a dilemma.
In response to investor inquiries about potential share buyback plans, SAIC Motor stated on an interactive platform on January 16 that it would promptly disclose any such plans as required.
Since releasing their "2025 Valuation Enhancement Plans," neither SAIC Motor nor GAC Group has announced any share repurchase programs.
Guideline No. 10 indicates that share buybacks are one of the important measures for listed companies to manage market value, helping to ensure the company's investment value reasonably reflects its quality.
The SAIC Motor securities department representative noted that the company had already implemented three rounds of share buybacks before releasing the 2025 plan, but the results have been less than ideal.
Announcements show SAIC Motor completed its third round of buybacks in 2024. Across all three rounds, the company spent a total of 4.747 billion yuan.
"In the current fiercely competitive market environment, whether a measure can yield immediate results is crucial," said Zhao Lei, who has participated in multiple seminars on value management for listed automakers. He noted that leading automakers have ample funds, but the effects of share buybacks are often not immediately apparent.
Taking SAIC Motor as an example, it remains below NAV. As of the end of the third quarter of 2025, SAIC Motor's cash and cash equivalents balance reached 190.852 billion yuan.
Zhao Lei added that if an action fails to produce immediate results, its perceived significance within internal corporate assessments diminishes considerably.
Currently, other state-controlled listed automakers like Changan Automobile, BAIC BluePark, FAW Jiefang, and Dongfeng Motor have not announced share buyback plans for many years. Changan Auto's last completed buyback was on March 21, 2012.
"Everyone is very concerned about market value management," said a board secretary's office staffer from one state-controlled automaker. Under current state-owned asset supervision requirements, value management is part of corporate strategy and a key performance indicator for management. However, if a measure proves ineffective, responsible personnel might be held accountable.
The automotive industry is capital-intensive. A securities analyst pointed out that autos are a heavy-asset sector with long, complex supply chains, leading to high annual capital expenditures for automakers.
Mired in the "200 Billion Yuan Market Cap Dilemma," many auto executives feel their companies are undervalued.
Executives from several listed automakers have mentioned in various forums that they believe their companies' market valuations are too low. For instance, one executive remarked, "We have so many business segments, yet our market cap is so small."
Most automakers listed in A-shares and Hong Kong have market capitalizations below 200 billion yuan. As of January 16, 2026, BYD, Seres, and Great Wall Motor ranked top three by market cap, at 849.3 billion yuan, 210.6 billion yuan, and 186.2 billion yuan, respectively.
With rapid industry development and ecosystem integration, many listed automakers are expanding into intelligent driving, three-electric systems, chips, robotics, and AI. Some are positioning autonomous ride-hailing and robotics as new growth drivers.
Some have even set ambitious scale targets. For example, GAC Group announced its "Trillion GAC" goal, aiming for 1 trillion yuan in revenue by 2030 and to become a world-class technology enterprise.
The core question remains: why are listed automakers undervalued in the capital markets?
Several investment professionals noted that the auto industry is notoriously tough. The rapid transition towards new energy and intelligent vehicles, coupled with intensifying competition, makes investing particularly challenging.
One institutional investor believes scarcity is a key factor for premium valuations. However, there are numerous automakers listed in A-shares and Hong Kong, whereas Tesla commands very high attention in the US market.
Some auto company leaders predict the domestic industry is entering its final competitive phase, expecting it will take about 5 years for the landscape to become clear and 10 years to reach a stable structure.
Focusing on the Core of Value Management: "Improving operational performance is absolutely paramount," emphasized an investor relations officer from a listed automaker, noting that management teams generally have a clear understanding of this core principle.
Guideline No. 10 defines market value management as strategic actions taken by listed companies, based on improving corporate quality, to enhance investment value and shareholder returns.
The IR officer mentioned participating in hundreds of investor meetings in 2025, observing that many institutional investors are actively seeking promising automakers but are waiting for clear inflection points in their development.
Zhao Lei further elaborated that compared to measures like buybacks or increasing holdings, developing one or two blockbuster vehicle models seems to have a more direct impact on an automaker's market value.
For instance, after NIO launched its pure-electric large three-row SUV model, Ledao L90, in July 2025 and the new ES8 in August, its stock price in Hong Kong and the US saw increases of around 10%.
William Li, Founder, Chairman, and CEO of NIO, stated that ultimately, market cap growth must return to commercial fundamentals, focusing on profitability and operational efficiency improvements.
According to Li, there is internal consensus at NIO to focus on the core auto business, enhance operational efficiency, and aim to achieve profitability exceeding the industry average.
The IR officer added that if a company's performance and operational quality are strong, but the stock price fails to rise, it's necessary to reflect on why the market is responding that way.
Some IR professionals have noticed a shift: unlike many cautious institutional investors, the number of retail shareholders in listed automakers has increased significantly, with the latter showing greater interest in hot thematic concepts.
For example, GAC Group's Hong Kong stock price surged over 10% intraday on December 2, 2025, with a cumulative gain exceeding 34% between November 24 and December 2.
Prior to this price movement, GAC management revealed plans to achieve mass production of all-solid-state battery vehicles in 2026. All-solid-state batteries are a hot theme in the capital markets.
Zhao Lei concluded that the core of value management for listed automakers lies in enhancing operational quality. While hot themes can provide short-term boosts, if the core business underperforms, it can lead to sustained and rapid stock price declines.
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