It is true that how and the magnitude that the EV trend is going to affect the traditional automobile components manufacturers is quite uncertain, as most of the large EV players (Tesla, BYD, etc.) tend to manufacture the components in-house and the manufacturing facilities for EV components are also much different from traditional auto components. That being said, the transition to EV will not happen overnight, in fact, it may take decades for the full transition to happen, and in the meantime, these companies are transforming their business models by positioning themselves in the next evolution of EV. Although we think these players may not go anywhere anytime soon, and the P/E looks attractive, these are highly cyclical industries and are facing secular headwinds, we would allocate the portfolio conservatively to these sectors. Also, we tend to prefer pure players like MG rather than companies that are trying to diversify away from their main operations as it tends to lead to "diworsification"
5i Research Answer: