Citigroup: China's automobile supply chain capital flow updates preferences defensive stocks include Fuyao Glass (03606), Sinotruk (03808), etc.

The Zhitong Finance App learned that Citi released a report to update the capital flow of China's automobile supply chain, indicating that under a low price-earnings ratio and steady dividend ratio, Fuyao Glass (03606, 600660.SH), Yutong Bus (600066.SH) and Sinotruk (03808) are more defensive and less volatile than vehicle and battery manufacturers; the bank “buys Fuyao Glass, BYD (01211, 002594.SZ), Ningde Times (03750, 300750.SZ), Sinotruk and Tongyu Bus all “bought” “Entered” rating.

According to the bank, Ningde Era (03750) H shares had a 19% premium last Friday (6th) compared to the unweighted average price-earnings ratio of BYD (01211) and Fuyao Glass's H shares, which increased from 15% in the previous week; in terms of A-shares during the same period, the premium index peaked and stabilized in early September and fell back to 24% last week's discount, which is a bit narrower than the previous week's 28% discount.

The bank pointed out that Fuyao Glass can be viewed as a benchmark for the lower valuation limit of large auto parts companies. The current price-earnings ratio of H shares and A shares is 10 times and 12 times, respectively, and the valuation is close to a ten-year low. The price-earnings ratio premium of Ningde Era H shares compared to the unweighted average price-earnings ratio of BYD and Fuyao Glass's H shares has narrowed sharply from 130% at the end of June to 19% now. The average price of lithium carbonate fell to about 93,000 yuan per ton in early November, down about 2% on a weekly basis; the bank sees lithium prices as an indicator of future battery demand.

In terms of battery market share, the NEV battery installed market share in the Ningde Era fell from 49.8% in January 2026 to 40.9% in September 2026. In terms of individual stocks, Citi's target price for BYD H shares is HK$114, and the target price for BYD A shares is RMB 100; Ningde Times has a target price of RMB 479 for A-shares and HK$732 for H shares; Fuyao Glass has a target price of HK$66; Fuyao Glass has a target price of RMB 63 for A-shares; the target price for Sinotruk is HK$55; and Yutong Bus's target price is RMB 41.7. The ratings are all “buy”.