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>We summarize the Jun 2023 price discounts at dealers for major automakers in this report.</li><li>Note that such discounts for each automaker are calculated based on weighted average of May 2023 retail sales volume for each model, as Jun retail sales volume data have not been released yet.</li><li>Most automakers’ discounts widened MoM in Jun 2023 to rush for 1H23 targets and cut inventories, 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.

We summarize the Jun 2023 price discounts at dealers for major automakers in this report.Note that such discounts for each automaker are calculated based on weighted average of May 2023 retail sales volume for each model, as Jun retail sales volume data have not been released yet.Most automakers’ discounts widened MoM in Jun 2023 to rush for 1H23 targets and cut inventories, 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 – When will discounts peak after rising for 8 months

<ul><li>Nine new-energy vehicle (NEV) brands including BYD, NIO, Xpeng, Li Auto, Zeekr, Aion, Aito, Neta and Leap reported their May 2023 sales volumes on 1 Jun 2023.</li><li>Sales volume of the nine brands combined rose 88% YoY (ranged from -26% to +146%) and 13% MoM (ranged from -8% to 38%) in May 2023.</li><li>Li Auto’s May sales more than doubled NIO and Xpeng combined.</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.

Nine new-energy vehicle (NEV) brands including BYD, NIO, Xpeng, Li Auto, Zeekr, Aion, Aito, Neta and Leap reported their May 2023 sales volumes on 1 Jun 2023.Sales volume of the nine brands combined rose 88% YoY (ranged from -26% to +146%) and 13% MoM (ranged from -8% to 38%) in May 2023.Li Auto’s May sales more than doubled NIO and Xpeng combined.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 – May NEV likely to hit second highest in history

Equity Bottom-Up

Guangzhou Automobile Group / Equity Bottom-Up

<ul><li>GAC’s 1Q23 net profit was 15% below our prior expectation, largely due to its alltime low gross margin.</li><li>We are still of the view that GAC is a defensive player in a volatile market.</li><li>We suggest investors to keep an eye on its Hyper GT’s sales momentum, as Aion’s upmarket could be key to its margins and valuation.</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.

GAC’s 1Q23 net profit was 15% below our prior expectation, largely due to its alltime low gross margin.We are still of the view that GAC is a defensive player in a volatile market.We suggest investors to keep an eye on its Hyper GT’s sales momentum, as Aion’s upmarket could be key to its margins and valuation.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.

GAC Group (2238 HK) – 1Q23 earnings miss on gross margin

<ul><li>GAC’s 4Q22 earnings missed our prior forecast on impairment.</li><li>The bright spot was its homegrown brands’ GPM improvement and cost reduction efforts.</li><li>We are still of the view that GAC’s valuation is attractive and it is a defensive player in a volatile market. </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.

GAC’s 4Q22 earnings missed our prior forecast on impairment.The bright spot was its homegrown brands’ GPM improvement and cost reduction efforts.We are still of the view that GAC’s valuation is attractive and it is a defensive player in a volatile market. 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.

GAC Group (2238 HK) – Impairment as always; eyes on Aion’s upmarket

<ul><li>China’s passenger-vehicle (PV) retail sales volume fell 43% YoY in Jan 2023, in line with our prior forecast of 44% YoY decline.</li><li>Wholesale volume fell 33% YoY last month, 30% stronger than our prior projection, largely due to much weaker than-expected inventory destocking and higher export volume.</li><li>PV exports only fell 9% MoM to about 250,000 units in Jan 2023. Automakers only cut about 26,000 units of inventories in their dealers’ showrooms in Jan 2023 based on our calculations, despite early Chinese New Year, which has led to more than two months of inventories based on our projected retail sales volume for Feb and Mar 2023. I</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 43% YoY in Jan 2023, in line with our prior forecast of 44% YoY decline.Wholesale volume fell 33% YoY last month, 30% stronger than our prior projection, largely due to much weaker than-expected inventory destocking and higher export volume.PV exports only fell 9% MoM to about 250,000 units in Jan 2023. Automakers only cut about 26,000 units of inventories in their dealers’ showrooms in Jan 2023 based on our calculations, despite early Chinese New Year, which has led to more than two months of inventories based on our projected retail sales volume for Feb and Mar 2023. IContent 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 – Inventory risk could lead to a bumpy recovery

China

Guangzhou Automobile Group Company, Ltd. manufactures, sells, and services automobiles. The Company is also involved in automobile parts and components, and auto finance and related services for both overseas and domestic markets.

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Guangzhou Automobile Group (2238 HK)

China Auto Sector – When will discounts peak after rising for 8 months

Note that such discounts for each automaker are calculated based on weighted average of May 2023 retail sales volume for each model

CMB International

China Auto Sector – May NEV likely to hit second highest in history

Nine new-energy vehicle (NEV) brands including BYD, NIO, Xpeng, Li Auto, Zeekr, Aion, Aito, Neta and Leap reported their May 2023 sales volumes on...

CMB International

GAC Group (2238 HK) – 1Q23 earnings miss on gross margin

GAC’s 1Q23 net profit was 15% below our prior expectation, largely due to its alltime low gross margin. We are still of the view that GAC is a...

CMB International

GAC Group (2238 HK) – Impairment as always; eyes on Aion’s upmarket

GAC’s 4Q22 earnings missed our prior forecast on impairment. The bright spot was its homegrown brands’ GPM improvement and cost reduction efforts.

CMB International

China Auto Sector – Inventory risk could lead to a bumpy recovery

Wholesale volume fell 33% YoY last month, 30% stronger than our prior projection, largely due to much weaker than-expected inventory destocking and...

CMB International

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