External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Maintain BUY. We are of the view that Meidong’s high inventory turnover and superb cost control capabilities which have resulted in healthy cash flow, could help it survive longer, as dealers’ profit recovery in China may take some time.</li><li>We believe Porsche dealers in China have probably bottomed out.</li><li>In-line operating loss of RMB1mn. Meidong’s new-car sales volume rose 8% YoY in 1H25, higher than our prior forecast, especially for Porsche and BMW.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Maintain BUY. We are of the view that Meidong’s high inventory turnover and superb cost control capabilities which have resulted in healthy cash flow, could help it survive longer, as dealers’ profit recovery in China may take some time.We believe Porsche dealers in China have probably bottomed out.In-line operating loss of RMB1mn. Meidong’s new-car sales volume rose 8% YoY in 1H25, higher than our prior forecast, especially for Porsche and BMW.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Meidong Auto (1268 HK) - Resilient Profit, Cash Flow; Porsche to Bottom Out?

<ul><li>Maintain BUY. Meidong’s 2H24 result was a mixed bag with many moving parts including impairment, deferred tax changes, and forex loss. After-sales revenue growth, SG&amp;A expense control and free cash flow growth are the bright spots amid a largely in-line core profit.</li><li>We revise up our FY25E net profit forecast by 21% to RMB494mn despite a new-car GPM miss in 2H24.</li><li>We are of the view that high inventory turnover could still play an important role when car prices keep going down, which could be overlooked by some investors.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Maintain BUY. Meidong’s 2H24 result was a mixed bag with many moving parts including impairment, deferred tax changes, and forex loss. After-sales revenue growth, SG&amp;A expense control and free cash flow growth are the bright spots amid a largely in-line core profit.We revise up our FY25E net profit forecast by 21% to RMB494mn despite a new-car GPM miss in 2H24.We are of the view that high inventory turnover could still play an important role when car prices keep going down, which could be overlooked by some investors.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Meidong Auto (1268 HK) - High Inventory Turnover Strategy Still Working Now

<ul><li>Maintain BUY. We project Meidong’s 2H24E core earnings to be largely stable HoH, as profit improvement from BMW and Lexus may be offset by Porsche.</li><li>We believe the impairment risks have been rising more significantly in 2H24E given Porsche’s worsening profit.</li><li>On the other hand, lower amortization burden could lift its earnings in the future, should the company book a large impairment loss on intangible assets in 2H24E. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Maintain BUY. We project Meidong’s 2H24E core earnings to be largely stable HoH, as profit improvement from BMW and Lexus may be offset by Porsche.We believe the impairment risks have been rising more significantly in 2H24E given Porsche’s worsening profit.On the other hand, lower amortization burden could lift its earnings in the future, should the company book a large impairment loss on intangible assets in 2H24E. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Meidong Auto (1268 HK) - Stable Operating Profit with Rising Impairment Risk

Thematic (Sector/Industry)

<ul><li>China’s passenger-vehicle (PV) retail sales volume fell 1% YoY in first four months of 2023, 2% higher than our forecast made in Dec 2022.</li><li>Wholesale volume also rose 7% YoY YTD, 3% higher than our prior forecast, largely due to doubled PV exports in the first four months of 2023.</li><li>Automakers in China started to cut inventories in Apr 2023, as we had expected.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China’s passenger-vehicle (PV) retail sales volume fell 1% YoY in first four months of 2023, 2% higher than our forecast made in Dec 2022.Wholesale volume also rose 7% YoY YTD, 3% higher than our prior forecast, largely due to doubled PV exports in the first four months of 2023.Automakers in China started to cut inventories in Apr 2023, as we had expected.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Auto Sector – Mixed picture ahead as inventory risk lingers

<ul><li>Both passenger vehicle (PV) retail sales and wholesale volumes in China are likely to hit new highs in 2025E.</li><li>That, along with trade-in subsidy and purchase-tax saving phase-out, could make 2026 interesting and complex.</li><li>Resilient industry growth despite subsidy cuts. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Both passenger vehicle (PV) retail sales and wholesale volumes in China are likely to hit new highs in 2025E.That, along with trade-in subsidy and purchase-tax saving phase-out, could make 2026 interesting and complex.Resilient industry growth despite subsidy cuts. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Auto - 2026 Outlook: Second half of the NEV match

China

China Meidong Auto Holdings Limited is an automobile dealership and maintenance group in China.

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China MeiDong Auto (1268 HK)

Meidong Auto (1268 HK) - Resilient Profit, Cash Flow; Porsche to Bottom Out?

Maintain BUY. We are of the view that Meidong’s high inventory turnover and superb cost control capabilities which have resulted in healthy cash...

CMB International

Meidong Auto (1268 HK) - High Inventory Turnover Strategy Still Working Now

We are of the view that high inventory turnover could still play an important role when car prices keep going down, which could be overlooked by...

CMB International

Meidong Auto (1268 HK) - Stable Operating Profit with Rising Impairment Risk

Maintain BUY. We project Meidong’s 2H24E core earnings to be largely stable HoH, as profit improvement from BMW and Lexus may be offset by Porsche.

CMB International

China Auto Sector – Mixed picture ahead as inventory risk lingers

China’s passenger-vehicle (PV) retail sales volume fell 1% YoY in first four months of 2023, 2% higher than our forecast made in Dec 2022.

CMB International

Auto - 2026 Outlook: Second half of the NEV match

Resilient industry growth despite subsidy cuts. We project China’s PV retail sales volume to be largely flat YoY and wholesale volume to rise 2.9%...

CMB International

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