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.

Thematic (Sector/Industry)

<ul><li>Chinese auto stocks underperformed the broader market in 3Q26, which we attribute to the slower-than-expected recovery in domestic demand, the newly imposed consumption tax on batteries, and the expected reduction in NEV export tax rebates (announced on 12 Oct 2026, to take effect on 1 Apr 2027).</li><li>We further cut our forecasts for both retail and wholesale volumes in 2026.</li><li>We also cut China’s NEV sales volume forecast in 2026, despite the on-track or even slightly outperforming market share gains.</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.

Chinese auto stocks underperformed the broader market in 3Q26, which we attribute to the slower-than-expected recovery in domestic demand, the newly imposed consumption tax on batteries, and the expected reduction in NEV export tax rebates (announced on 12 Oct 2026, to take effect on 1 Apr 2027).We further cut our forecasts for both retail and wholesale volumes in 2026.We also cut China’s NEV sales volume forecast in 2026, despite the on-track or even slightly outperforming market share gains.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 - Stable Pricing, Exports and Cost Discipline Cushion Weak Domestic Volume

Equity Bottom-Up

<ul><li>Maintain BUY. We view BYD’s 2Q26 earnings as resilient despite bottom-line performance missing by revenue drag and higher impairment losses.</li><li>We believe tightening cost control, marked by stabilizing 1H26 R&amp;D spend and slowing D&amp;A growth, underscores long-term margin resilience anchored by superior scale and vertical integration.</li><li>2Q26 GPM beat; net profit missed on revenue and impairment. BYD’s 2Q26 revenue fell 3.2% YoY to RMB195bn, or 8.6% lower than our prior forecast. </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 view BYD’s 2Q26 earnings as resilient despite bottom-line performance missing by revenue drag and higher impairment losses.We believe tightening cost control, marked by stabilizing 1H26 R&amp;D spend and slowing D&amp;A growth, underscores long-term margin resilience anchored by superior scale and vertical integration.2Q26 GPM beat; net profit missed on revenue and impairment. BYD’s 2Q26 revenue fell 3.2% YoY to RMB195bn, or 8.6% lower than our prior forecast. 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.

BYD (1211 HK/002594 CH) - 2Q26 Earnings Signal Enhanced Cost Discipline

<ul><li>Maintain BUY. BYD’s 1Q26 average selling price (ASP) and GPM both beat our prior forecast with overseas contribution, which echoed our previous report titled “overseas sales could be a positive surprise in FY26”.</li><li>We expect FY26E GPM to sustain, as we estimate overseas vehicle GPM could be 6- 8ppts higher than that in China.</li><li>BYD also becomes more prudent on expenses, especially on R&amp;D, which could provide earnings resilience with higher capitalization ratio. </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. BYD’s 1Q26 average selling price (ASP) and GPM both beat our prior forecast with overseas contribution, which echoed our previous report titled “overseas sales could be a positive surprise in FY26”.We expect FY26E GPM to sustain, as we estimate overseas vehicle GPM could be 6- 8ppts higher than that in China.BYD also becomes more prudent on expenses, especially on R&amp;D, which could provide earnings resilience with higher capitalization ratio. 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.

BYD (1211 HK/002594 CH) - Overseas, R&D Support 1Q26 Earnings Resilience

<ul><li>Maintain BUY. BYD’s 3Q25 earnings recovered QoQ, although the pace was below our prior expectation.</li><li>We believe its industry-leading technologies, previous high earnings quality, lessons learnt from pricing strategy and inventory management in FY25 could support its earnings resilience ahead.</li><li>3Q25 earnings miss on GPM, forex loss. BYD’s 3Q25 revenue fell 3% YoY amid a 2% sales volume decline YoY.</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. BYD’s 3Q25 earnings recovered QoQ, although the pace was below our prior expectation.We believe its industry-leading technologies, previous high earnings quality, lessons learnt from pricing strategy and inventory management in FY25 could support its earnings resilience ahead.3Q25 earnings miss on GPM, forex loss. BYD’s 3Q25 revenue fell 3% YoY amid a 2% sales volume decline YoY.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.

BYD (1211 HK/002594 CH) - Recover Gradually

<ul><li>We summarize the Feb 2026 price discounts at dealers for major automakers in this report.</li><li>Note that Feb discounts for each automaker are calculated based on the weighted average of Jan 2026 retail sales volume for each model, as Feb 2026 retail sales volume data have not been released yet.</li><li>On the surface, China’s industrywide average discounts remained flat in Feb 2026 vs. Jan 2026 and Dec 2025 based on our calculations, as narrower discounts for German brands offset wider discounts for other brands. </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.

We summarize the Feb 2026 price discounts at dealers for major automakers in this report.Note that Feb discounts for each automaker are calculated based on the weighted average of Jan 2026 retail sales volume for each model, as Feb 2026 retail sales volume data have not been released yet.On the surface, China’s industrywide average discounts remained flat in Feb 2026 vs. Jan 2026 and Dec 2025 based on our calculations, as narrower discounts for German brands offset wider discounts for other brands. 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 - 1Q26 carmakers’ margins under pressure amid rising discounts

China

BYD Company is a Chinese multinational manufacturing conglomerate specializing in new energy technologies. It develops and produces electric vehicles, rechargeable batteries for various applications, mobile handset components, and rail transit systems. The company was founded in February 1995 and is headquartered in Shenzhen, Guangdong, China.

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BYD Company (1211 HK)

Auto - Stable Pricing, Exports and Cost Discipline Cushion Weak Domestic Volume

We also cut China’s NEV sales volume forecast in 2026, despite the on-track or even slightly outperforming market share gains.

CMB International

BYD (1211 HK/002594 CH) - 2Q26 Earnings Signal Enhanced Cost Discipline

Maintain BUY. We view BYD’s 2Q26 earnings as resilient despite bottom-line performance missing by revenue drag and higher impairment losses.

CMB International

BYD (1211 HK/002594 CH) - Overseas, R&D Support 1Q26 Earnings Resilience

BYD also becomes more prudent on expenses, especially on R&D, which could provide earnings resilience with higher capitalization ratio.

CMB International

BYD (1211 HK/002594 CH) - Recover Gradually

We believe its industry-leading technologies, previous high earnings quality, lessons learnt from pricing strategy and inventory management in FY25...

CMB International

Auto - 1Q26 carmakers’ margins under pressure amid rising discounts

Note that Feb discounts for each automaker are calculated based on the weighted average of Jan 2026 retail sales volume for each model, as Feb 2026...

CMB International

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