Weekly: Channel Checks Attribute Sales Slowdown To Supply Bottleneck

China’s PV sales growth slowed to 1% yoy in May due to a higher base and chip
shortage. Our recent channel checks suggest that the sales slowdown is mainly
attributed to a supply bottleneck from a chip shortage rather than weakened demand, as shown by the inventory drawdown, pile-up of orderbooks and rebound in retail prices. With chip shortage easing from 2H21, auto sales will likely recover. Maintain MARKET WEIGHT. Top picks: Zhongsheng, Yongda, BYD and CATL.