HSBC rates 5 China autonomous driving stocks buy as sector accelerates

HSBC Global Investment Research initiated coverage of 5 China autonomous driving stocks with buy ratings, setting a top target of HKD135 on PONY-W.

"China's autonomous driving sector is entering a commercialization phase that supports higher valuations across the supply chain," HSBC Global Investment Research said in a note.

The bank set a HKD135 target on Pony AI Inc. (PONY-W), a HKD105 target on XPeng Inc. (09868.HK) and a HKD29.6 target on WeRide Inc. (00800.HK). Horizon Robotics (09660.HK) received a HKD11.5 target, while Joyson Electronics (00699.HK) got a HKD21.1 target.

The coordinated buy calls from a top-tier bank could drive institutional buying interest in a sector where US consumers remain wary — a JD Power study released Thursday showed fewer than 1 in 4 US adults would feel comfortable riding in a fully self-driving vehicle. HSBC's bullish stance on Chinese autonomous driving names contrasts with that caution, betting that China's regulatory support and faster deployment timelines will create a competitive edge.

Pony AI, which operates robotaxi services in multiple Chinese cities, represents HSBC's highest-conviction pick with the largest implied upside among the group. XPeng, the electric vehicle maker that has integrated advanced driver-assistance systems across its model lineup, received a HKD105 target. WeRide, which focuses on autonomous delivery and sanitation vehicles, was assigned a HKD29.6 target.

Horizon Robotics, a key supplier of autonomous driving chips and software platforms to Chinese automakers, received a HKD11.5 target. Joyson Electronics, which provides automotive safety systems and electronics, was assigned a HKD21.1 target.

Short selling data as of June 12 showed active two-way interest in the names, with PONY-W recording a short selling ratio of 58.5 percent and XPeng at 24.9 percent, suggesting some investors are betting against the rally even as HSBC turns bullish.

The implications for holders: HSBC's sector-wide endorsement provides a valuation anchor for a group that has seen volatile trading amid shifting regulatory signals. Investors will watch for commercial deployment milestones from Pony AI and XPeng in the coming quarters as the key catalyst for whether the targets are achieved.

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