The automotive sector has clear structural opportunities. The Hong Kong-listed auto ETF, Guotai (520720), surged over 2.5%, experiencing net capital inflow for five consecutive days.

The auto sector’s structural opportunities are clear. On April 1, Hong Kong-listed Auto ETF Cathay (520720) surged by more than 2.5%, and saw net capital inflows for five consecutive days.

Guosen Securities believes that even as certainty around the new-energy vehicle purchase tax preferential policy fades and the replacement-for-upgrading program also tapers, there are still structural opportunities in the 2026 auto industry. These include the move by independent brands toward higher-end positioning, the acceleration of intelligentization penetration, and the rollout and commercialization of embodied intelligence. Autos and their industrial chain are still in a broader cycle of technological transformation. Specifically, it favors opportunities in independent brands’ upmarket shift, faster earnings growth in the heavy-truck industrial chain, and the expansion of core hardware driven by intelligentization, an increase in cabin-related value, and the accelerated promotion of robotaxi.

The Hong Kong-listed Auto ETF Cathay (520720) tracks the Hong Kong Stock Connect Auto Index (931239). This index focuses on auto-industry-related companies that can be invested in through the Stock Connect program in Hong Kong, covering areas such as vehicle manufacturing, auto parts, and intelligent driving. The index constituents have a high concentration of vehicle and electrification characteristics, reflecting the overall performance of the auto industrial chain in the Hong Kong market. Within that, the proportion related to passenger vehicles is relatively high, and it also covers the industrial and raw materials sectors, giving the overall theme strong innovation and growth potential.

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