According to a research report released by Morgan Stanley, recent weekly auto data also indicates downside risks for industry sales in September, primarily due to the October 1 holiday.

The bank has assigned a target price of HK$27 to GEELY AUTO (00175) and maintained its "Overweight" rating.

The report notes that investors may be waiting for clearer news regarding potential EU tariffs on plug-in hybrid electric vehicles (PHEVs) and cuts to export VAT rebates before increasing their exposure.

However, based on the bank's base-case scenario of approximately 6x valuation, Geely's valuation appears increasingly attractive.

Geely's scale, cost leadership, and self-funded/free cash flow (FCF) financial position should enable it to further strengthen its competitive position during an industry downturn, making Geely a relatively lower-risk, higher-quality China auto stock investment within the bank's coverage universe.