Citi backs BYD and four autonomous-driving stocks at HK$142 target

Citi expects a second phase of unwinding in autonomous-driving stocks before BYD's Q2 earnings, with its AI fund flow index at 177.

The first phase of unwinding by automakers may temporarily slow, while investors could start a second phase before BYD reports second-quarter results, Citi said in a research note dated Aug. 4.

Citi rates BYD H-shares Buy with a target price of HK$142. The bank also carries Buy ratings on Hesai-W (02525), Pony.ai-W (02026), WeRide-W (00800) and Horizon Robotics-W (09660), the four autonomous-driving names it sees as potential beneficiaries of the second-phase unwinding.

The AI-related fund flow index, which tracks Citi's measure of capital positioning in AI-linked equities, recovered to 177 on Aug. 4 after the first phase of unwinding. The bank's thesis ties the autonomous-driving complex to the broader AI trade, with lidar maker Hesai, robotaxi operators Pony.ai and WeRide, and chip designer Horizon Robotics all exposed to the sector's capital cycle.

The second-phase unwinding, if it materializes, would mark a fresh round of position adjustments in a sector that has drawn heavy investor attention as Chinese automakers push into assisted and autonomous driving. BYD, the country's largest electric-vehicle maker, sits at the center of that shift, and its second-quarter report is the trigger Citi flags for the next move in the group.

Citi's Buy calls span the value chain rather than a single supplier, a signal that the bank sees the autonomous-driving trade as broad-based. Hesai supplies lidar sensors, Pony.ai and WeRide operate robotaxi fleets, and Horizon Robotics designs the computing chips that power driver-assistance systems, giving investors exposure across hardware, software and services.

The recommendations point to capital inflows into Hong Kong-listed autonomous-driving and AI names as BYD's earnings approach. Investors will watch BYD's second-quarter results for the next catalyst.

This article is for informational purposes only and does not constitute investment advice.