Written by Hwang Ka-hui
Chongqing Changan Automobile’s stock price rose for the day as investors cheered the Chinese automaker’s plans to collaborate with tech giant Huawei on autonomous driving, digital platforms and other advanced vehicle systems. rose to the limit value.
Shares in the state-owned company rose 10% early Monday to 19.56 yuan ($2.74), the biggest single-day gain since July.
Changan announced over the weekend that it plans to acquire up to a 40% stake in a joint venture with Huawei and expects to complete the deal within six months, pending further negotiations.
Citi analysts led by Jeff Chan praised the plan, comparing it to government efforts to consolidate the battery sector over the past decade.
“Overall, this signals the government’s intention to take stronger initiatives towards standardization.” [advanced driver-assistance systems] “By pooling related assets and R&D expenditures, we will improve the efficiency of artificial intelligence development,” they wrote in a research note. “This is Chang’an, Hesai, Desay, Sanhua, Tuop.”
Analysts estimate the new company could be valued at 250 billion yuan ($34.97 billion). Changan’s market capitalization is approximately 153 billion yuan.
Citi’s stock has a neutral rating and a price target of 16.20 yuan.
Changan is one of China’s traditional “big four” state-owned automakers. Shares of fellow member Dongfeng Motor rose 5.0% in morning trading.
Please email Jiahui Huang (jiahui.huang@wsj.com).
(Ended) Dow Jones News
November 26, 2023 23:05 ET (04:05 GMT)
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