- RE-ITERATE Buy Entry – 138 Target – 150 Stop Loss – 132
- The investment objective of the Fund is to provide investment results that, before fees and expenses, closely correspond to the performance of the Solactive China Electric Vehicle and Battery Index. The Manager will primarily use a full replication strategy through investing directly in constituent stocks of the Index in substantially the same weightings in which they are included in the Index.
- Slash purchase tax for small-engine cars by half. China’s Ministry of Finance said in a statement that it will reduce the purchase tax for cars priced at RMB 300,000 and below, and with 2.0-liter engines or smaller to 5% from the previous 10%. The move will come into effect from June 1 through the end of 2022. It is expected that the tax reduction could boost automobile sales by 2mn units in 2022. Previously, the authorities discussed with automakers about extending subsidies for EVs that were set to expire in 2022. There is no purchase tax for EVs this year, but the government could lower the planned purchase tax from 10% to 5% in 2023.
- Exposure to China’s EVs and related market leaders. The ETF’s main components include the domestic largest EV maker, BYD (002594 CH), the global largest domestic EV battery maker, Contemporary Amperex Technology (300750 CH), and the domestic largest lithium miner, Ganfeng Lithium (002460 CH).
- Resumption of a technical uptrend. Shares have broken out of the downward channel and resumed the uptrend. Yesterday, the stock closed near an intraday high and closed above the 50dMA with an increase in volume.