CLSA's research indicates that total orders for major brands in mainland China rose 10% week-on-week last week, with growth driven primarily by new model launches such as BYD Company Limited (ASX: 01211)'s Sea Lion 08 and Li Auto (ASX: 02015)'s MEGA, while brands without new releases generally saw order declines.

As the market enters its seasonal peak period, the brokerage expects September passenger vehicle demand to continue a modest recovery, supported by new model launches and a more complete product lineup. However, CLSA forecasts domestic passenger vehicle sales of approximately 1.7 to 1.8 million units in September, representing a year-on-year decline of around 24%, primarily due to the high comparison base caused by demand being pulled forward last year.

The report notes that BYD COMPANY (ASX: 01211)'s orders rose 12% month-on-month, driven mainly by the Sea Lion 08, priced between RMB 229,900 and RMB 279,900, which has already secured roughly 15,000 firm orders. The model's launch price aligns with its pre-sale pricing.

Both LEAPMOTOR (ASX: 09863) and GEELY AUTO (ASX: 00175) did not introduce new models. Leapmotor is scheduled to hold a technology briefing next week, where CLSA anticipates the company may unveil around two new C/B-series models along with its latest intelligent driving large language model.

LI AUTO (ASX: 02015) saw orders surge 122% week-on-week, driven by the refreshed MEGA, priced at RMB 509,800—approximately RMB 50,000 lower than the previous version with upgraded specifications—generating around 10,000 orders. However, CLSA estimates current MEGA production capacity stands at only about 3,000 to 4,000 units per month.

The brokerage maintains its "high conviction outperform" ratings on BYD COMPANY (ASX: 01211) and GEELY AUTO (ASX: 00175), with target prices of HK$120 and HK$30, respectively. CLSA also keeps its "outperform" rating on LEAPMOTOR (ASX: 09863) with a target price of HK$60.