Daily Investment Strategy
Recommended Stock：BYD（1211）
All provinces in China have implemented car replacement subsidies and strong consumption policies, driving NEV sales up 35.6% YoY in the first 11 months. While some demand may have been pulled forward, we estimate BYD's 2024 sales could surpass 600 million units, aligning with aggressive forecasts by the China Passenger Car Association. With rising EV penetration and BYD's ability to gain market share domestically and internationally, achieving this target appears feasible even if overall demand peaks this month. BYD's largest overseas market, Brazil, saw NEV sales (passenger and light commercial vehicles) surge 8.4x YoY to 51,300 units from January to September, supported by government efforts to boost adoption. With penetration still in low single digits, further increases could drive significant growth in local NEV sales, aligned with Brazil's "Rota 2030" target of 30% NEV sales by 2030. Target price: $80.9.
U.S. stocks fell more than 1,100 points on the Fed's hawkish outlook
The Dow Jones Industrial Average fell more than 1,100 points on Wednesday as the Fed cut interest rates by a quarter point but halved the number of expected rate cuts next year, sending Treasury yields higher and the stock market awash in the red. Fed members now forecast the benchmark interest rate will fall to 3.9% next year, indicating just two rate cuts, compared with four cuts predicted in September. Interest rates are expected to fall to 3.4% in 2026, up from the previous forecast of 2.9%. Interest rates are expected to reach 3.1% by 2027, up from 2.9% previously. Powell pointed to strong economic growth in 2H24, low downside risks to the labor market, and uncertainty about inflation as factors leading to a slower pace of interest rate cuts.
Hong Kong Stock Connect had a net inflow of HK$2.07bn on Wednesday of which China Mobile (941) had the largest net inflow, reaching HK$0.58bn; followed by CCB (939). Meituan (3690) recorded the largest net outflow at $0.41bn, followed by Tencent (700).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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