Huawei Technologies Co.’s latest automobile-related foray once again drove big share-price moves, showing the technology giant continues to draw investors despite the uncertainty overhanging China’s stock market.
Chongqing Changan Automobile Co. surged by its daily limit of 10% in Shenzhen on Monday after it forged a smart-car pact with Huawei. Suppliers to both Changan Auto and unlisted Huawei also climbed, even as the latest concerns on China’s economy dragged the benchmark CSI 300 Index down by as much as 1.3%.
Huawei-related stocks have been rare winners in Chinese equities this year, as investors snap up shares of companies involved in producing its latest hit smartphone and EV products. As ongoing trade tensions with the West continue to loom over the market, the company has appealed as a symbol of China’s drive for self-reliance.
Huawei Drives $34 Billion China Stock Boom in Rare Hot Trades
“Huawei-related trades have stood out as investor darlings in an otherwise moribund market,” said Shen Meng, a director at Chanson & Co. “The company has been one of the few themes that are exciting enough to stimulate onshore investor sentiment.”
Changan Auto — which is already tied up with Huawei on Avatr brand luxury EVs — is one of the best performers on the CSI 300 this year, up 59%. The state-backed traditional automaker still trails Hong Kong-listed EV pure plays such as Li Auto Inc., which has more than doubled so far in 2023.
Together with related firms, Changan Auto will hold up to 40% of the new company being set up by Huawei, which will design and produce intelligent automotive systems and components. Changan Auto said the new pact helps further its shift toward becoming a low-carbon, smart-transportation technology firm.
“The deal brings new competition to the EV sector, especially high-end EVs,” said Steven Leung, executive director at UOB Kay Hian Hong Kong Ltd.
Among other EV makers, Li Auto, BYD Co. and XPeng Inc. all fell more than 5% each in Hong Kong on Monday. Huawei intelligent car partner Foryou Corp. and Changan Auto supplier Chongqing Sulian Plastic Co. surged more than 8% each in mainland trading.
--With assistance from Jing Jin.
