Daily Investment Strategy
Daily focus：BYD（1211）
BYD announced significant price cuts of 10% to 34% on 22 models within its Ocean and Dynasty series of new energy vehicles, with promotions running through the end of June. While the market has expressed concerns over potential profit impacts, this reaction appears to be an overestimation. The price reductions apply only to mass-market models, excluding high-end brands such as "Yangwang" and "Denza," which maintain higher profit margins and help cushion overall profitability. Moreover, the actual discounts are lower than reported headlines suggest, as prices already included approximately a 10% discount. Although these mass-market models account for a large portion of sales volume, they represent only half of the profit, with overseas and premium segments remaining stable. BYD leverages economies of scale to reduce costs, increase production, and negotiate with suppliers, partially offsetting the pressure from price cuts. Overall, market pessimism regarding BYD’s profitability appears exaggerated.
ISM manufacturing PMI shrinks for three consecutive months
A senior White House official said on Monday that U.S. President Trump and Chinese President Xi Jinping are likely to hold a one-on-one call this week. The U.S. has also urged all countries to propose their best tariff plans by Wednesday, indicating an urgent need within the U.S. government to reach an agreement within a tight deadline. This has temporarily eased global trade tensions for market investors. On the economic data front, the ISM Manufacturing Purchasing Managers’ Index (PMI) fell by 0.2 points month-on-month to 48.5, remaining in contraction territory for three consecutive months and hitting a new low since November 2024.
Leung Kai Tong is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to: https://apps.sfc.https://apps.sfc.hk/publicregWeb/indi/ADU276/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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