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

<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

<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

China

China MeiDong Auto is a multi-franchise automobile dealership group operating in the People's Republic of China, focusing on luxury and mid-to-high-end brands such as Porsche, BMW, Lexus, and Toyota. The company's core activities include the sale of new passenger cars and spare parts, along with comprehensive after-sales services, value-added services, and used vehicle trading. Founded in 2003, its headquarters are located in Dongguan, 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 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