Shares of Chinese electric vehicle companies Li Auto (NASDAQ:LI), NIO Inc. (NIO (NYSE:NIO)) and Xpeng Motors (NYSE:XPEV) surged on Friday after Morgan Stanley analysts said they expect the stocks to rise over the next 15 days.
At 12:12 p.m. ET, LI stock was up 7%, NIO stock was up 9.2%, and XPEeng stock was up 10.7%.
Morgan Stanley has identified these three companies as tactical research ideas and expects their market caps to trend upward in absolute terms over the next 15 days.
These stocks have recently seen their value decline. According to Morgan Stanley, this decline makes their current market valuation more attractive for short-term investment.
The company also highlighted that on April 26, China’s Ministry of Commerce announced that it would provide subsidies of 7,000 yuan and 10,000 yuan to consumers who replace their old cars with a new internal combustion engine vehicle (ICEV) or new energy vehicle (NEV), respectively. Morgan Stanley believes that this policy will have a positive impact on demand in the automotive sector.
In conclusion, Morgan Stanley expects that there is approximately a 70% to 80% chance (high probability) that the stock will perform as expected and see an increase in value.
