China Securities: 2026 Subsidy Extension to Strengthen Automotive Tech Attributes

Stock News12-15

China Securities Co., Ltd. released a research report stating that current market expectations for next year's auto stimulus policies and production/sales volumes remain weak, with cyclical attributes softening. However, expectations may have bottomed, while tech-driven growth areas like robotics and autonomous driving remain core themes.

The robotics sector is currently in a phase of consolidation, with industry trends approaching the 0-to-1 inflection point. Strategic positioning in high-probability and tech-upgrading segments is recommended. Key takeaways include:

**Passenger Vehicles**: The Central Economic Work Conference emphasized domestic demand expansion and a robust domestic market, confirming the extension of national subsidies to 2026. Despite weaker sequential sales from leading automakers and unmet year-end "tail effect" expectations, the firm remains bullish on premium domestic brands, strong product cycles, and leading NEV exporters.

**Robotics**: The sector has rebounded since late November, driven by Tesla supply chain orders (hundred-unit scale) and U.S. humanoid robot policy support. GaN tech applications have also drawn attention. Upcoming catalysts include December order confirmations, Gen3 finalization in Q1 2025, small-batch production in Q2, and mass production in H2. Unitree’s IPO filing may further boost sentiment.

**Commercial Vehicles**: November heavy truck sales rose 65% YoY (+7% MoM), while bus sales grew 25% YoY (+12% MoM), with exports up 26% YoY. As undervalued high-dividend assets, commercial vehicles—especially buses and motorcycles—show strong growth potential. Heavy-duty engine suppliers like Weichai Power benefit from AIDC volume expansion and valuation re-rating.

Recommended portfolio: Hengbo Co., Weichai Power, Yutong Bus, Jianghuai Automobile, Sanhua Intelligent Controls, and Longsheng Technology.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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