(Bloomberg) -- Xiaomi Corp., Xpeng Inc. and Nio Inc. report earnings with all attention on what Donald Trump’s return to the White House will mean for the Chinese tech and electric vehicles firms.
The US president-elect has threatened 60% tariffs on Chinese goods that could decimate trade between the world’s largest economies, with Chinese President Xi Jinping saying China is ready to work with Trump to improve relations with the US. China’s lack of new stimulus to boost consumption also left investors expecting more measures when Trump takes office in January.
“We think additional stimulus will be rolled out to address domestic and external headwinds in 2025 and beyond, especially once Trump’s tariff plans become clearer,” analysts including regional Chief Investment Officer Yifan Hu at UBS Wealth Management wrote in a note.
The European Union already imposed tariffs on Chinese automakers in late October. Both parties have reached “technical consensus” in recent talks aimed at scaling back or reversing tariffs, according to the state-run China Central Television’s social media account.
China‘s EV makers have benefited from resurgent domestic demand, spurred by government subsidies aimed at tempting consumers to trade-in gas cars for EVs and hybrid. Xiaomi may see EV deliveries continue to rise in the results, and new models from Xpeng and Nio may lift future earnings.
Baidu Inc., Weibo Corp. and Kuaishou Technology continue to face earnings risks amid intense competition and weak economic sentiment in China. Alibaba Group Holding Ltd. reported anemic growth in its core Chinese e-commerce business, with Tencent Holdings Ltd. President Martin Lau cautioning that a recovery will take time.
Highlights to look out for:
Monday: Xiaomi’s (1810 HK) third-quarter revenue probably rose 27% as its electric vehicle deliveries continued to accelerate. Its Internet of Things segment also saw a boost as demand of household appliances improved following China’s trade-in subsidies. The firm’s smartphone growth likely slowed to 12%.
Tuesday: Xpeng’s (9868 HK) operating loss likely widened and margins remained weak, even as deliveries are set to surpass company’s guidance, BI said. The G6 SUV recorded higher exports in the third quarter, while the majority of sales gains were driven by its new and cheaper sedan, which may have caused a sequential drop in average selling prices, it added.
- Weibo’s (WB US) third-quarter earnings were probably dragged down by lower advertising revenue, amid uncertainty in China’s consumer and corporate sectors, BI said. A pickup in fourth-quarter ad growth is likely to be short-lived and won’t alter Weibo’s long-term outlook.
- Trip.com’s (9961 HK) third-quarter non-GAAP operating margin likely rose, partly thanks to a stronger-than-expected recovery of higher-margin outbound travel, BI said. Growing usage of online travel service in lower-tier cities and outbound travel will be key to powering the company’s market share gains and earnings through 2025.
Wednesday: Nio’s (NIO US) estimated 8% sequential rise in deliveries was probably offset by higher marketing spending, according to BI. The new mass-market Onvo L60 SUV might be the company’s key volume driver in the fourth quarter and help narrow operating losses, BI said.
- Kuaishou Technology’s (1024 HK) online marketing revenue probably drove the business in the third quarter, consensus estimates show. It likely saw live streaming revenue contract, though analysts at Citi said the revenue decline should narrow in the second half as more content is offered and the ecosystem is improved.
Thursday: Baidu’s (BIDU US) profit drop should confirm its artificial intelligence prospects remain over-hyped as it struggles to monetize the investment, analysts at BI said. With advertising revenue also on a downtrend amid China’s consumer sector pains, adjusted net income is projected to decline 14%.
- Airports of Thailand (AOT TB) full-year net income is expected to have more than doubled, supported by higher overall contributions from its aeronautical and non-aeronautical segments, consensus estimates show. Citi expects a mix of weak Chinese travelers’ consumption power and aircraft OEM delays to limit any potential near-term upside surprise to traffic.
--With assistance from Ryotaro Nakamaru.
(Updates throughout)
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