By Jiahui Huang


Chongqing Changan Automobile shares rose by their daily limit as investors welcomed plans by the Chinese automaker to work with tech giant Huawei Technologies on autonomous driving, digital platforms and other advanced automotive systems.

Shares of the state-run company rose 10% to 19.56 yuan ($2.74) early Monday, on track for their biggest one-day gain since July.

Changan said over the weekend that it plans to take up to a 40% stake in the joint venture with Huawei, with a deal slated for completion within six months, pending further talks.

Citi analysts led by Jeff Chung lauded the plan, comparing it with government efforts to consolidate the battery sector over the past decade.

"Overall this shows the government's intention to take a stronger initiative to standardize [advanced driver-assistance systems] by pooling" related assets and research and development spending to improve artificial-intelligence development efficiency, they wrote in a research note. "We believe this is a very positive read to Changan and ADAS-component related stocks such as Hesai, Desay, Sanhua, Tuopu."

The new company could be valued at CNY250 billion ($34.97 billion), according to the analysts' estimates. Changan has a market cap of about CNY153 billion.

Citi has a neutral rating on shares with a target price of CNY16.20.

Changan is one of China's traditional "big four" state-run automakers. Shares of Dongfeng Automobile, another member, rose 5.0% in morning trading.


Write to Jiahui Huang at jiahui.huang@wsj.com


(END) Dow Jones Newswires

11-26-23 2305ET