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(Bloomberg) -- Chinese automakers including Xpeng Inc., Geely Automobile Holdings Ltd. and Xiaomi Corp. should all report higher vehicle sales, though challenges remain as competition heats up and the European Union moves ahead with tariffs.
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The EU is hiking tariffs on EVs made in China by as much as 48%, citing subsidies that harm the bloc’s carmakers that have been struggling to keep up with China’s new generation of green car manufacturers. Chinese EV makers including Geely are responding by working with European partners to bypass tariffs as EV registrations in the EU fell sequentially in July after the new policy took effect.
Xiaomi’s EV sales are expected to reach 27 billion yuan ($3.8 billion) in 2024, with sales of 100,000 to 120,000 units, according to Bloomberg Intelligence. “China’s burgeoning EV market could become Xiaomi’s key growth engine in the next few years,” it said.
In the gaming arena, NetEase Inc. probably saw lackluster results as it works to deliver its next big video game title. Its long-term overseas growth strategy will likely continue to face difficulties this year, BI said.
Highlights to look out for:
Tuesday: Xpeng (XPEV US) is poised to report another quarterly net loss. SUV models likely led volume gains, while its most expensive model saw weaker sales. Technology-service revenue from Volkswagen AG was likely its key earnings driver amid lackluster automotive gross profit, BI said. A meaningful sales recovery will depend on its launch of a new EV model, though the margin upside looks limited given its affordable prices, BI added.
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Kuaishou Technology (1024 HK) has probably reached a plateau with its earnings growth as it sees more intense competition and slowing growth in China’s live-streaming e-commerce sector, said BI. Revenue for the live-streaming segment fell 14% in the second-quarter amid weak consumer sentiment, estimates show, while second-quarter adjusted net income was little changed sequentially.
Wednesday: Xiaomi’s (1810 HK) second-quarter sales likely surged 29%, while adjusted net income declined 5.6%, consensus shows. Higher-than-expected orders for its first EV model will likely boost sales by as much as 10% this year, though the launch will be a drag on margins. Currency tailwinds likely helped overseas sales growth and margins, BI said.