According to a research report from CLSA, Chinese automobile orders saw a rebound during the Dragon Boat Festival holiday last week, although underlying demand is anticipated to remain weak on a year-over-year basis.

Driven by new model launches from Byd Company Limited (ASX: 002594) and strong domestic performance from GEELY AUTO (ASX: 00175), orders for first-tier brands increased by 34% week-over-week, while orders for mass-market brands rose by 51%.

The firm has assigned a "High Conviction Outperform" rating to both BYD and Geely Auto, with price targets set at HK$130 and HK$30, respectively. LEAPMOTOR (ASX: 09863) received an "Outperform" rating with a HK$60 price target.

Regarding recent policy developments, the report suggests that new measures from China's Ministry of Commerce supporting auto consumption are focused on the aftermarket sector, aiming to support future value chain extension and user experience. This differs from last year's direct subsidy programs, and CLSA believes its effect on stimulating short-term demand will be limited.