Citi Updates China Auto Supply Chain Fund Flows, Favors Defensive Names Including Fuyao Glass and Sinotruk

Citi has released a report updating fund flow trends across China's auto supply chain, noting that Fuyao Glass Industry Group Co.,Ltd. (ASX: 600660), Yutong Bus Co.,Ltd. (SH: 600066) and Sinotruk (HK: 03808) offer more defensive qualities and lower volatility than vehicle manufacturers and battery makers, supported by low price-to-earnings ratios and solid dividend yields, according to a report from Zhitong Finance APP.

The investment bank rates Fuyao Glass Industry Group Co.,Ltd., Byd Company Limited (SZ: 002594), Contemporary Amperex Technology Co., Limited (SZ: 300750), Sinotruk and Yutong Bus Co.,Ltd. all at "Buy."

As of last Friday (the 6th), CATL (HK: 03750) H-shares carried a 19% valuation premium over the unweighted average P/E of BYD COMPANY (HK: 01211) and FUYAO GLASS (HK: 03606), widening from 15% the previous week, the report said. On the A-share side, that premium peaked and stabilized in early September, narrowing to a 24% discount last week from a 28% discount the prior week.

Fuyao Glass Industry Group Co.,Ltd. can be viewed as the benchmark for the valuation floor among large auto parts suppliers, with its H-shares and A-shares currently trading at P/E ratios of 10 times and 12 times respectively, close to decade lows, the report noted. The P/E premium of CATL H-shares over the unweighted average of BYD COMPANY and FUYAO GLASS H-shares has narrowed sharply to the current 19% from 130% at the end of June.

Average lithium carbonate selling prices fell to about 93,000 yuan per tonne in early November, down roughly 2% week on week. The bank treats lithium prices as a gauge of future battery demand.

On battery market share, Contemporary Amperex Technology Co., Limited's installed share of new energy vehicle batteries dropped to 40.9% in September 2026 from 49.8% in January 2026.

On individual stocks, Citi set a target price of HK$114 for BYD COMPANY H-shares and 100 yuan for Byd Company Limited A-shares; a target price of 479 yuan for Contemporary Amperex Technology Co., Limited A-shares and HK$732 for CATL H-shares; a target price of HK$66 for FUYAO GLASS H-shares and 63 yuan for Fuyao Glass Industry Group Co.,Ltd. A-shares; a target price of HK$55 for Sinotruk; and a target price of 41.7 yuan for Yutong Bus Co.,Ltd., all with "Buy" ratings.