External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Equity Bottom-Up

<ul><li>Upgrade to BUY. Meidong’s share price has fallen 65% since our downgrade on 1 Apr 2023.</li><li>We are of the view that its new-car gross margin probably hit bottom in 1H23, although recovery may take a while.</li><li>Porsche’s new-car gross margin appears to recover the fastest among traditional luxury brands and Meidong could benefit the most among its peers. </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.

Upgrade to BUY. Meidong’s share price has fallen 65% since our downgrade on 1 Apr 2023.We are of the view that its new-car gross margin probably hit bottom in 1H23, although recovery may take a while.Porsche’s new-car gross margin appears to recover the fastest among traditional luxury brands and Meidong could benefit the most among its peers. 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 Meidong Auto (1268 HK) – The Worst Is Over

<ul><li>Maintain HOLD. We project Meidong’s 1H23E net profit to fall 23% YoY to RMB 266mn, consistent with our prior estimates of RMB 250-300mn made in Apr 2023.</li><li>We see gradual improvement in new-car margins in 2H23 but could be weaker than we had hoped earlier.</li><li>Therefore, we cut FY23E net profit by 29% to RMB 723mn. We still see valuation cap as industry headwinds persist..</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 HOLD. We project Meidong’s 1H23E net profit to fall 23% YoY to RMB 266mn, consistent with our prior estimates of RMB 250-300mn made in Apr 2023.We see gradual improvement in new-car margins in 2H23 but could be weaker than we had hoped earlier.Therefore, we cut FY23E net profit by 29% to RMB 723mn. We still see valuation cap as industry headwinds persist..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 Meidong Auto (1268 HK) – 1H23E NP to Fall 23% YoY; Mixed Picture Ahead

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics 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>We downgrade Meidong to HOLD from Buy despite its superb management execution, as we believe it still faces strong industry headwinds in the short term and may lack catalysts amid its high valuation.</li><li>We think the weak earnings in 2H22 could extend into 1H23E.</li><li>Key metrics in 2H22 trailing peers. Porsche’s new-car GPM at Meidong narrowed to a historical-low of 3.2% in 2H22.</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 downgrade Meidong to HOLD from Buy despite its superb management execution, as we believe it still faces strong industry headwinds in the short term and may lack catalysts amid its high valuation.We think the weak earnings in 2H22 could extend into 1H23E.Key metrics in 2H22 trailing peers. Porsche’s new-car GPM at Meidong narrowed to a historical-low of 3.2% in 2H22.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 Meidong Auto (1268 HK) – Lingering industry headwinds amid high valuation

<ul><li>We project Meidong’s 2H22E net profit to fall 23% YoY amid new-car margin weakness in 4Q22.</li><li>On the other hand, we expect StarChase and after-sales services to aid its profitability with FY23E net profit to surge 76% YoY on our estimates.</li><li>We believe Meidong is still best positioned among Chinese dealers with its strongest management execution and better brand mix than its peers.</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 project Meidong’s 2H22E net profit to fall 23% YoY amid new-car margin weakness in 4Q22.On the other hand, we expect StarChase and after-sales services to aid its profitability with FY23E net profit to surge 76% YoY on our estimates.We believe Meidong is still best positioned among Chinese dealers with its strongest management execution and better brand mix than its peers.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 Meidong Auto (1268 HK) – We expect 2H22E net profit to fall 23% YoY

China

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

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China MeiDong Auto (1268 HK)