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 estimate that Meidong’s net profit excluding impairment and withholding tax impact in 2H23E could be a similar level to that in 1H23, as the higher portion of after-sales service profit and cost cuts could offset the HoH decline for new-car GPM.</li><li>However, we are of the view that impairment for goodwill and/or intangible assets is likely in 2H23E.</li><li>We project FY24E net profit to be RMB371mn, as Porsche’s new-car GPM is likely to improve from 2Q24E. </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 estimate that Meidong’s net profit excluding impairment and withholding tax impact in 2H23E could be a similar level to that in 1H23, as the higher portion of after-sales service profit and cost cuts could offset the HoH decline for new-car GPM.However, we are of the view that impairment for goodwill and/or intangible assets is likely in 2H23E.We project FY24E net profit to be RMB371mn, as Porsche’s new-car GPM is likely to improve from 2Q24E. 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 Terrible 2023 Is Behind Us

<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

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>11 Chinese automakers including BYD, Great Wall, NIO, Xpeng, Li Auto, Zeekr, Aion, Deepal, Neta, Leap and Aito reported their Feb 2024 NEV sales volumes on 1 Mar 2024.</li><li>Sales volume of the 11 automakers combined fell 19% YoY (ranging from -45% to +503%) and 39% MoM (ranging from -51% to -19%) in Feb 2024 due to the Chinese New Year holiday.</li><li>Li Auto rose YoY, Xpeng fell the most MoM. Li Auto’s deliveries rose 22% YoY and fell 35% MoM to about 20,000 units in Feb 2024, in line with our prior expectation.</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.

11 Chinese automakers including BYD, Great Wall, NIO, Xpeng, Li Auto, Zeekr, Aion, Deepal, Neta, Leap and Aito reported their Feb 2024 NEV sales volumes on 1 Mar 2024.Sales volume of the 11 automakers combined fell 19% YoY (ranging from -45% to +503%) and 39% MoM (ranging from -51% to -19%) in Feb 2024 due to the Chinese New Year holiday.Li Auto rose YoY, Xpeng fell the most MoM. Li Auto’s deliveries rose 22% YoY and fell 35% MoM to about 20,000 units in Feb 2024, in line with our prior expectation.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 - Feb NEV Sales Fell; More New Models from Mar

China

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

China MeiDong Auto (1268 HK)