Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

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Thematic (Sector/Industry)

<ul><li>Auto experts and industry executives in China are calling on regulators to explore a market-based approach to governing electric-vehicle (EV) makers’ manufacturing qualifications.</li><li>The sector confronts an influx of inexperienced and ultimately unsuccessful firms amid the country’s push towards electrification.</li><li>The success of China’s EV industry has been widely viewed as the result of years of Beijing’s supportive policies, including the use of <a href="https://www.caixinglobal.com/2023-04-06/in-depth-why-should-beijing-reinstate-subsidies-for-auto-sales-102016072.html" target="_blank" rel="noopener">subsidies</a> to spur demand, and instruments such as a strict permit system to better manage capacity.</li></ul>

Auto experts and industry executives in China are calling on regulators to explore a market-based approach to governing electric-vehicle (EV) makers’ manufacturing qualifications.The sector confronts an influx of inexperienced and ultimately unsuccessful firms amid the country’s push towards electrification.The success of China’s EV industry has been widely viewed as the result of years of Beijing’s supportive policies, including the use of subsidies to spur demand, and instruments such as a strict permit system to better manage capacity.

China’s EV Industry Calls on Regulators to Curb the Back-Seat Driving

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>Our top pick. Li Auto’s 1Q23 results beat our previous forecasts. We believe its profitability could sustain with GPM’s sequential improvement.</li><li>We are still of the view that Li Auto is best positioned among Chinese NEV start-ups, with the highest chance to become a long-term winner.</li><li>Apart from its products, we like the company’s high self-discipline in costs and business expansion even as it is much more resourceful than before.</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.

Our top pick. Li Auto’s 1Q23 results beat our previous forecasts. We believe its profitability could sustain with GPM’s sequential improvement.We are still of the view that Li Auto is best positioned among Chinese NEV start-ups, with the highest chance to become a long-term winner.Apart from its products, we like the company’s high self-discipline in costs and business expansion even as it is much more resourceful than before.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.

Li Auto Inc. (LI US) – 1Q23 beat with sustainable profitability ahead

<ul><li>China granted a six-month grace period for carmakers and dealers to sell off as many as 2 million new vehicles that will be out of compliance with new emission standards taking effect July 1.</li><li>The move is intended to ease pressure on the auto market amid slowing sales and a brutal price war.</li><li>The government said it will allow sales of vehicles produced under the old pollution standards to continue until Dec. 31, though automakers will have to apply more stringent requirements to newly built autos starting July 1.</li></ul>

China granted a six-month grace period for carmakers and dealers to sell off as many as 2 million new vehicles that will be out of compliance with new emission standards taking effect July 1.The move is intended to ease pressure on the auto market amid slowing sales and a brutal price war.The government said it will allow sales of vehicles produced under the old pollution standards to continue until Dec. 31, though automakers will have to apply more stringent requirements to newly built autos starting July 1.

China Cuts Automakers a Break on New Emission Rules

<ul><li>Major Chinese manufacturers’ new-energy vehicle (NEV) sales were all over the map in March, with companies that recently released budget-friendly cars outperforming their rivals amid a raging price war across the industry.</li><li>Last month, NEV sales of BYD Co. Ltd., Guangzhou Automobile Group Co. Ltd., Li Auto Inc. and Nio Inc. grew 97.5%, 89.8%, 88.7% and 3.9% year-on-year, respectively, according to company statements.</li><li>The NEV category mainly covers pure electric and plug-in hybrid vehicles.</li></ul>

Major Chinese manufacturers’ new-energy vehicle (NEV) sales were all over the map in March, with companies that recently released budget-friendly cars outperforming their rivals amid a raging price war across the industry.Last month, NEV sales of BYD Co. Ltd., Guangzhou Automobile Group Co. Ltd., Li Auto Inc. and Nio Inc. grew 97.5%, 89.8%, 88.7% and 3.9% year-on-year, respectively, according to company statements.The NEV category mainly covers pure electric and plug-in hybrid vehicles.

China’s NEV Sales Are Both Surging and Sinking, Depending on the Company

<ul><li>China’s passenger-vehicle (PV) retail sales volume rose 11% YoY in Feb 2023, 4% lower than our prior forecast.</li><li>Wholesale volume also rose 11% YoY last month, 13% higher than our prior projection, again largely due to inventory restocking and higher export volume.</li><li>PV exports surged 86% YoY to about 271,000 units in Feb 2023. Automakers in China added about 131,000 units of inventories into their dealers in Feb 2023 based on our calculations, which has led to 2.2 months of inventories based on our projected retail sales volume for Mar and Apr 2023. </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 rose 11% YoY in Feb 2023, 4% lower than our prior forecast.Wholesale volume also rose 11% YoY last month, 13% higher than our prior projection, again largely due to inventory restocking and higher export volume.PV exports surged 86% YoY to about 271,000 units in Feb 2023. Automakers in China added about 131,000 units of inventories into their dealers in Feb 2023 based on our calculations, which has led to 2.2 months of inventories based on our projected retail sales volume for Mar and Apr 2023. 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 – A trough in the short term?

China

Li Auto Inc. manufactures automobiles. The Company designs, develops, and sells smart new energy electric sport utility vehicles. Li Auto conducts businesses in China.

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Li Auto (LI US)

China’s EV Industry Calls on Regulators to Curb the Back-Seat Driving

Auto experts and industry executives in China are calling on regulators to explore a market-based approach to governing electric-vehicle (EV)...

Caixin Global

Li Auto Inc. (LI US) – 1Q23 beat with sustainable profitability ahead

Our top pick. Li Auto’s 1Q23 results beat our previous forecasts. We believe its profitability could sustain with GPM’s sequential improvement.

CMB International

China Cuts Automakers a Break on New Emission Rules

China granted a six-month grace period for carmakers and dealers to sell off as many as 2 million new vehicles that will be out of compliance with...

Caixin Global

China’s NEV Sales Are Both Surging and Sinking, Depending on the Company

Major Chinese manufacturers’ new-energy vehicle (NEV) sales were all over the map in March, with companies that recently released budget-friendly...

Caixin Global

China Auto Sector – A trough in the short term?

Wholesale volume also rose 11% YoY last month, 13% higher than our prior projection, again largely due to inventory restocking and higher export...

CMB International

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