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

Guangzhou Automobile Group / Equity Bottom-Up

<ul><li>Maintain BUY. GAC’s 2Q26 net loss widened QoQ on selling expenses and equity income, despite revenue beat.</li><li>Management raised FY26E export target by 20%, which may result in margin improvement in 2H26E.</li><li>That, along with improving Aion retail customer mix and continuous cost reduction efforts, could drive multi-year GPM recovery, in our view.</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. GAC’s 2Q26 net loss widened QoQ on selling expenses and equity income, despite revenue beat.Management raised FY26E export target by 20%, which may result in margin improvement in 2H26E.That, along with improving Aion retail customer mix and continuous cost reduction efforts, could drive multi-year GPM recovery, in our view.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/601238 CH) - Exports, Customer Mix to Drive Margin Recovery

Thematic (Sector/Industry)

<ul><li>We summarize the Feb 2026 price discounts at dealers for major automakers in this report.</li><li>Note that Feb discounts for each automaker are calculated based on the weighted average of Jan 2026 retail sales volume for each model, as Feb 2026 retail sales volume data have not been released yet.</li><li>On the surface, China’s industrywide average discounts remained flat in Feb 2026 vs. Jan 2026 and Dec 2025 based on our calculations, as narrower discounts for German brands offset wider discounts for other brands. </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 Feb 2026 price discounts at dealers for major automakers in this report.Note that Feb discounts for each automaker are calculated based on the weighted average of Jan 2026 retail sales volume for each model, as Feb 2026 retail sales volume data have not been released yet.On the surface, China’s industrywide average discounts remained flat in Feb 2026 vs. Jan 2026 and Dec 2025 based on our calculations, as narrower discounts for German brands offset wider discounts for other brands. 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 - 1Q26 carmakers’ margins under pressure amid rising discounts

<ul><li>We maintain our China PV sales volume growth forecasts for 2026 on both retail and wholesale basis after weaker-than-expected Nov and Dec sales.</li><li>We revise down our 2026 NEV sales volume slightly, as the new trade-in subsidies have stringent requirements.</li><li>We are of the view that weaker-than-expected 4Q25 sales volume may result in earnings miss for some automakers. </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 maintain our China PV sales volume growth forecasts for 2026 on both retail and wholesale basis after weaker-than-expected Nov and Dec sales.We revise down our 2026 NEV sales volume slightly, as the new trade-in subsidies have stringent requirements.We are of the view that weaker-than-expected 4Q25 sales volume may result in earnings miss for some automakers. 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 - Weak 4Q25 sales may lead to earning miss

<ul><li>Both passenger vehicle (PV) retail sales and wholesale volumes in China are likely to hit new highs in 2025E.</li><li>That, along with trade-in subsidy and purchase-tax saving phase-out, could make 2026 interesting and complex.</li><li>Resilient industry growth despite subsidy cuts. </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.

Both passenger vehicle (PV) retail sales and wholesale volumes in China are likely to hit new highs in 2025E.That, along with trade-in subsidy and purchase-tax saving phase-out, could make 2026 interesting and complex.Resilient industry growth despite subsidy cuts. 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 - 2026 Outlook: Second half of the NEV match

<ul><li>We summarize the Jul 2025 price discounts at dealers for major automakers in this report.</li><li>Note that Jul discounts for each automaker are calculated based on the weighted average of Jun 2025 retail sales volume for each model, as Jul 2025 retail sales volume data have not been released yet.</li><li>The industrywide average discounts narrowed 0.3ppts MoM to 15.1% in Jul 2025, based on our calculations, mainly driven by German luxury brands (BMW, Mercedes-Benz and Audi), as dealers need to raise car prices to offset lower commissions from the auto finance business after banks cut rebates to dealers. </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 Jul 2025 price discounts at dealers for major automakers in this report.Note that Jul discounts for each automaker are calculated based on the weighted average of Jun 2025 retail sales volume for each model, as Jul 2025 retail sales volume data have not been released yet.The industrywide average discounts narrowed 0.3ppts MoM to 15.1% in Jul 2025, based on our calculations, mainly driven by German luxury brands (BMW, Mercedes-Benz and Audi), as dealers need to raise car prices to offset lower commissions from the auto finance business after banks cut rebates to dealers. 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 - Jul discounts narrowed amid new models, auto finance policy changes

China

Guangzhou Automobile Group Co., Ltd. is a Chinese state-owned automobile manufacturer that designs, develops, manufactures, and sells passenger cars, commercial vehicles, motorcycles, and automotive components. The company operates its own brands, including Trumpchi, Aion, and Hyptec, and has joint ventures with international partners like Honda and Toyota. It was founded in June 1997 and is headquartered in Guangzhou, Guangdong, China.

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Guangzhou Automobile Group (2238 HK)

GAC Group (2238 HK/601238 CH) - Exports, Customer Mix to Drive Margin Recovery

Maintain BUY. GAC’s 2Q26 net loss widened QoQ on selling expenses and equity income, despite revenue beat. Management raised FY26E export target by...

CMB International

Auto - 1Q26 carmakers’ margins under pressure amid rising discounts

Note that Feb discounts for each automaker are calculated based on the weighted average of Jan 2026 retail sales volume for each model, as Feb 2026...

CMB International

Auto - Weak 4Q25 sales may lead to earning miss

We maintain our China PV sales volume growth forecasts for 2026 on both retail and wholesale basis after weaker-than-expected Nov and Dec sales.

CMB International

Auto - 2026 Outlook: Second half of the NEV match

Resilient industry growth despite subsidy cuts. We project China’s PV retail sales volume to be largely flat YoY and wholesale volume to rise 2.9%...

CMB International

Auto - Jul discounts narrowed amid new models, auto finance policy changes

We believe Geely and Leapmotor could be better positioned than most of its peers with a strong new model pipeline and sales momentum, as well as...

CMB International

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