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. 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

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-meidong-auto-holdings-limited" target="_blank" data-smartkarma-citation="entities:10795:1" rel="noopener">China MeiDong Auto (1268 HK)</a> presents an excellent investment opportunity, trading at 13.3x/8.1x FY22/23e, post street estimate revisions downwards with a dividend yield of 6.0%/10% (assuming an 80% payout). </li>
<li>China MeiDong Auto (1268 HK) 's integration of Starchase is progressing better than we expected, with metrics on inventory dramatically improving. We believe the management will focus on aftersales now. </li>
<li>The company will join the EV bandwagon by collaborating on aftersales with players having operational (not financial) difficulties performing this service, presenting a good opportunity for the company. </li>
</ul>



China MeiDong Auto (1268 HK) presents an excellent investment opportunity, trading at 13.3x/8.1x FY22/23e, post street estimate revisions downwards with a dividend yield of 6.0%/10% (assuming an 80% payout). 
China MeiDong Auto (1268 HK) 's integration of Starchase is progressing better than we expected, with metrics on inventory dramatically improving. We believe the management will focus on aftersales now. 
The company will join the EV bandwagon by collaborating on aftersales with players having operational (not financial) difficulties performing this service, presenting a good opportunity for the company. 


Meidong: Insights from Call with the Management for H1 2022

<ul><li>Maintain BUY. Despite strong headwinds that dealers faced, we still project Meidong’s 1H24 net profit to be positive with subsidies from Porsche and Lexus.</li><li>We expect industrywide headwinds to continue in 2H24 but we believe investors could turn a bit more positive on Meidong’s FY25 outlook given removal of the convertible bond (CB) burden and a new NEV model cycle for BMW.</li><li>We project 1H24E net profit to be RMB43mn assuming no significant impairment. </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. Despite strong headwinds that dealers faced, we still project Meidong’s 1H24 net profit to be positive with subsidies from Porsche and Lexus.We expect industrywide headwinds to continue in 2H24 but we believe investors could turn a bit more positive on Meidong’s FY25 outlook given removal of the convertible bond (CB) burden and a new NEV model cycle for BMW.We project 1H24E net profit to be RMB43mn assuming no significant impairment. 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) - We Expect 1H24 to Be Still Profitable

Analyst

Steve

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-meidong-auto-holdings-limited" target="_blank" data-smartkarma-citation="entities:10795:1" rel="noopener">China MeiDong Auto (1268 HK)</a> announced a profit warning this morning, expecting a 90% decline in net profit for 1H23.  </li>
<li>Luxury auto dealer in China is facing major uncertainties in its business model, with no visibility in the near term.  </li>
<li>However, <a href="https://www.smartkarma.com/entities/zhongsheng-group-holdings" target="_blank" data-smartkarma-citation="entities:10573:1" rel="noopener">Zhongsheng Group (881 HK)</a> currently employs the best long-term strategy amidst industry transformation.  Suggest to keep a close eye on the name. </li>
</ul>



China MeiDong Auto (1268 HK) announced a profit warning this morning, expecting a 90% decline in net profit for 1H23.  
Luxury auto dealer in China is facing major uncertainties in its business model, with no visibility in the near term.  
However, Zhongsheng Group (881 HK) currently employs the best long-term strategy amidst industry transformation.  Suggest to keep a close eye on the name. 


Zhongsheng Group (881 HK):  Could Be A Winner In The Long Run, But No Short-Term Visibility

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) - 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

Meidong: Insights from Call with the Management for H1 2022

China MeiDong Auto presents an excellent investment opportunity, trading at 13.3x/8.1x FY22/23e, post street estimate revisions downwards with a...

Sameer Taneja

Meidong Auto (1268 HK) - We Expect 1H24 to Be Still Profitable

Maintain BUY. Despite strong headwinds that dealers faced, we still project Meidong’s 1H24 net profit to be positive with subsidies from Porsche...

CMB International

Zhongsheng Group (881 HK): Could Be A Winner In The Long Run, But No Short-Term Visibility

Meidong profit warning. Luxury auto dealer's business model in China is facing major uncertainties, with no visibility in the near term.

Steve

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