CHINESE electric vehicle-related stocks are still a safer bet than other tech plays, according to one of the nation’s top performing asset managers — if investors can stomach soaring valuations.

Xiong Lin, a fund manger at Shanghai Ruiyi Investment Development Center, recommends those already holding electric vehicle (EV) firms and their supply chain resist the urge to take profit in a market he sees having a greater tolerance for higher valuations in light of a required reserve ratio cut — a boon for liquidity sensitive growth stocks.

Deemed an area of strategic growth, China’s goal is for EVs to account for 20 percent of vehicles sold in 2025. Global funds have also been upbeat on the sector because of China’s continued dominance in global EV battery production, and the nation’s supportive industry policies serving its ambitious plan of reaching carbon neutrality in 2060.

“Policy support for the industry sets it apart from other tech plays, making it a safer bet amid anti-monopoly measures on Internet firms,” Xiong said.

Xiong helps oversee 3 billion yuan (US$464 million) in assets in mainland and Hong Kong stocks, with one of the firm’s products up 55 percent for the year as of July 9, ranking among the top 2 percent of peers, according to the most recent available data from fund tracker Shenzhen PaiPaiWang Investment & Management Co.

In the first half, new-energy vehicle wholesale deliveries in China totaled 1.1 million vehicles, while retail sales were around 1 million, according to data from China’s Passenger Car Association (PCA). That’s on course to beat the PCA’s 2021 full-year target of 2.4 million units.

Industry fundamentals will stay robust in the next three to five years as market penetration accelerates, Xiong added.

To be sure, valuations in the sector may not be attractive as an entry point for some. A new-energy themed ETF is trading near a record high after gaining 60 percent from a low this year. (SD-Agencies)