The Growing Interest of Investors in China’s Electric Vehicle Market
China’s electric vehicle market is thriving, and investors worldwide are taking notice. With a plethora of Chinese EV makers gaining momentum, investors are becoming increasingly eager to get involved. According to Kingsley Jones of boutique advisory firm Jevons Global, there are numerous reasons to be bullish on Chinese EV makers, as the market continues to expand rapidly.
BYD and CATL: Leading the Charge in China’s EV Industry
Kingsley Jones, the chief investment officer at Jevons Global, singles out automotive manufacturer BYD and battery-making giant Contemporary Amperex Technology (CATL) as two key players in China’s EV industry. BYD recently surpassed Tesla to become the top global EV maker, making it a favorable investment choice. In addition, CATL, known for its impressive sales growth, has secured partnerships with major automakers such as BMW, Mercedes, and Hyundai. Despite these opportunities, retail investors face significant challenges in purchasing shares of CATL due to its limited availability.
Overcoming Hurdles: ETFs Offer Access to China’s EV Growth Story
While investing directly in Chinese EV companies may pose obstacles for retail investors, exchange-traded funds (ETFs) provide a viable alternative. The Amplify Lithium & Battery Technology ETF (BATT) and CoreValues Alpha Greater China Growth ETF (CGRO) are two options that enable U.S. and Europe-based investors to gain exposure to restricted Chinese shares. BATT offers broad exposure to the EV supply chain with holdings in leading battery material and technology companies worldwide, including CATL and BYD. Similarly, CGRO provides investors access to BYD and CATL, along with other prominent Chinese companies like Xiaomi.
BYD: A Promising Investment Opportunity
As BYD’s stock price experienced a dip of 13% this year, Kingsley Jones saw it as an opportune time to increase his holdings in the company. With positive news surrounding BYD’s model releases and strong sales momentum within China and export markets like Australia, Jones believes the valuation of the company is attractive given its growth rate. Furthermore, he notes the increasing adoption of BYD cars in EV-friendly regions, such as Canberra, Australia. The median analyst rating on BATT’s holdings, which include BYD, suggests a significant upside potential.
CGRO: Unlocking China’s EV Potential
Another ETF that offers exposure to the Chinese EV market is CGRO. Holding BYD and CATL among its top positions, CGRO also includes Xiaomi, a smartphone maker that plans to venture into the EV market. Analysts have given positive ratings to the stocks held by CGRO, predicting a considerable increase in the ETF’s value in the next 12 months.
The Bright Future of China’s EV Market
With China’s EV market continually expanding and companies like BYD and CATL leading the way, the investment potential in this sector is immense. Despite hurdles faced by retail investors in directly purchasing certain Chinese stocks, ETFs like BATT and CGRO offer accessible ways to benefit from China’s EV growth story. As the demand for electric vehicles rises globally, these investments provide opportunities for investors to be part of a booming industry.
Analyst comment
1. Positive news: The growing interest of investors in China’s electric vehicle market.
Market prediction: The market for Chinese EV makers will continue to expand rapidly, providing opportunities for investors.
2. Positive news: BYD and CATL leading the charge in China’s EV industry.
Market prediction: BYD and CATL’s impressive positions in the EV industry make them favorable investment choices, with potential for growth.
3. Neutral news: Overcoming hurdles: ETFs offer access to China’s EV growth story.
Market prediction: ETFs like BATT and CGRO provide accessible ways for investors to gain exposure to Chinese EV companies, potentially benefiting from the industry’s growth.
4. Neutral news: BYD: A promising investment opportunity.
Market prediction: Despite a recent stock price dip, BYD’s positive news and strong sales momentum make the company’s valuation attractive, with potential for growth.
5. Positive news: CGRO unlocking China’s EV potential.
Market prediction: CGRO, holding top positions in BYD and CATL, along with other promising Chinese companies, is expected to increase in value in the next 12 months.
6. Positive news: The bright future of China’s EV market.
Market prediction: With the continuous expansion of China’s EV market and leading companies like BYD and CATL, the investment potential in this sector is immense, providing opportunities for investors.
