Citigroup: Short covering in auto stocks is expected to continue, supported by significantly increased sales of new energy vehicles and other favorable factors.

Citibank expects that the momentum for short covering in the Chinese automotive sector will continue, driven by significant increases in wholesale sales of new energy vehicles and significant inventory reduction in the industry. Analysts Jeff Chung and others stated in their report that other positive factors include: an increase in the export proportion enhancing the profit visibility of some car companies in the second half of the year, a clear differentiation among car companies, the approaching earnings season bringing upward opportunities, and the automotive industry entering the peak sales season. After incorporating the announced brand data, it is anticipated that the wholesale sales of the new energy vehicle industry in July will grow by 1% month-on-month and 23% year-on-year, exceeding market expectations. The following brands outperformed the industry in July's new energy vehicle sales: Leapmotor, BYD, GAC Aion, and Zeekr.