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>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><p><em>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.</em></p>

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

<ul><li>Nine new-energy vehicle (NEV) brands including BYD, NIO, Xpeng, Li Auto, Zeekr, Aion, Aito, Neta and Leap reported their Jan 2023 sales volumes on 1 Feb 2023.</li><li>Sales volume of the nine brands combined rose 22% YoY (ranged from -86% to +449%) and dropped 42% MoM (ranged from -87% to -23%)</li><li>Li Auto beat, NIO and Xpeng miss. Li Auto delivered over 15,000 units in Jan 2023, exceeding some investors’ expectation.</li></ul><p><em>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.</em></p>

Nine new-energy vehicle (NEV) brands including BYD, NIO, Xpeng, Li Auto, Zeekr, Aion, Aito, Neta and Leap reported their Jan 2023 sales volumes on 1 Feb 2023.Sales volume of the nine brands combined rose 22% YoY (ranged from -86% to +449%) and dropped 42% MoM (ranged from -87% to -23%)Li Auto beat, NIO and Xpeng miss. Li Auto delivered over 15,000 units in Jan 2023, exceeding some investors’ 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.

China Auto Sector – Jan NEV likely in line or slightly miss; Li Auto beat

Equity Bottom-Up

Guangzhou Automobile Group / Equity Bottom-Up

<ul><li>Maintain BUY. We project GAC’s 4Q22 net profit to decline 21% YoY to RMB 1.6bn as we expect its gross profit to fall 7% YoY and equity income from joint ventures (JVs) and associates to decline 13% YoY.</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><li>Net profit in 4Q22 likely to fall YoY and QoQ. We project GAC’s 4Q22 net profit to fall 21% YoY to RMB 1.6bn amid 6% YoY decline in its total sales volume.</li></ul><p><em>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.</em></p>

Maintain BUY. We project GAC’s 4Q22 net profit to decline 21% YoY to RMB 1.6bn as we expect its gross profit to fall 7% YoY and equity income from joint ventures (JVs) and associates to decline 13% YoY.We are still of the view that GAC’s valuation is attractive and it is a defensive player in a volatile market.Net profit in 4Q22 likely to fall YoY and QoQ. We project GAC’s 4Q22 net profit to fall 21% YoY to RMB 1.6bn amid 6% YoY decline in its total sales volume.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) – We Expect 4Q22 NP to Fall on Equity Income

<div><div><div><div><ul><li>GAC’s 3Q22 earnings were below our prior expectation mainly due to unexpected impairment and QoQ decline of equity income.</li><li>Accordingly, we cut our FY22-23E net profit by 13% and 9%, respectively.</li><li>Yet, we are still of the view that GAC’s valuation is attractive and we maintain our BUY rating.</li></ul></div></div></div></div><p><em>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.</em></p>

GAC’s 3Q22 earnings were below our prior expectation mainly due to unexpected impairment and QoQ decline of equity income.Accordingly, we cut our FY22-23E net profit by 13% and 9%, respectively.Yet, we are still of the view that GAC’s valuation is attractive and we maintain our BUY rating.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) – 3Q22 earnings miss on impairment, Toyota

<div><div><div><div><ul><li>China’s passenger-vehicle (PV) retail sales volume, based on insurance data, rose 9% YoY to 1.86mn units in Sep 2022, 3% lower than our prior forecast.</li><li>Wholesale volume surged 33% YoY to 2.33mn units, 8% higher than our prior projection due to more inventories pushed to dealers than expected.</li><li>Almost 260,000 units of inventories were added into dealers in Sep 2022, the most in any Sep in history. </li></ul></div></div></div></div><p><em>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.</em></p>

China’s passenger-vehicle (PV) retail sales volume, based on insurance data, rose 9% YoY to 1.86mn units in Sep 2022, 3% lower than our prior forecast.Wholesale volume surged 33% YoY to 2.33mn units, 8% higher than our prior projection due to more inventories pushed to dealers than expected.Almost 260,000 units of inventories were added into dealers in Sep 2022, the most in any Sep in history. 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 – 2H22E likely beat; FY23E consensus overstated

China

Great Wall Motor Company Limited, through its subsidiaries, manufactures and sells pick-up trucks and sport-utility vehicles (SUVs) in China under branded names. The Company also researches and develops, and manufactures principal automotive parts and components for use in the assembly of pick-up trucks and SUVs.

BAIC BluePark New Energy Technology Co.,Ltd. operates as a passenger car manufacturer. The Company engages in research, development, and marketing of new energy vehicles and power battery system. BAIC BluePark New Energy Technology conducts businesses in China.

BAIC BluePark New Energy Techn (600733 CH)

Anhui Jianghuai Automobile Co., Ltd. manufactures and markets bus and truck chassis, gear boxes, other auto parts, and business automobiles.

NIO Inc. manufactures and sells automobiles. The Company offers electric vehicles and parts, as well as provides battery charging services. NIO serves customers worldwide.

FAW Jiefang Group Co., Ltd, through joint ventures, manufactures and markets cars and auto parts.  The Company produces automobiles, transmission systems, and engines.  FAW Car also provides auto repair and customizing services.

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.

Chongqing Changan Automobile Company Limited develops, manufactures, and markets mini cars, mini sedans, full size sedans, and engines.

Chongqing Changan Automobile Company (200625 CH)

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

BAIC Motor Corporation Limited designs, researches, develops, manufactures and sells a variety of passenger vehicles in China.

Dongfeng Motor Group Company Limited, through joint ventures, designs, manufactures, and markets diesel engines, light trucks, automobiles, castings, and related spare parts.

PT Astra International Tbk assembles and distributes automobiles, motorcycles, and their related spare parts.  Through its subsidiaries, the Company also operates in the mining, development of plantations, financial and information technology.

NISSAN MOTOR CO., LTD. manufactures and distributes automobiles and related parts. It also provides financing services. Nissan delivers a comprehensive range of products under various brands. The Company manufactures in Japan, the United States, Mexico, the United Kingdom and many other countries.

Geely Automobile Holdings Limited operates as a passenger vehicles manufacturing company. The Company provides passenger vehicles development, manufacturing, sales, and other services. Geely Automobile Holdings also exports passenger vehicles.

Hero MotoCorp Ltd. designs, manufactures and distributes motorcycles. The Company's products also include motorcycle parts and accessories.

Subaru Corp manufactures passenger cars, buses, motor vehicle parts, and industrial machinery.  The Company also produces aircraft parts and supplies it to defense agency and Boeing Co.  The Company sells its passenger cars under the Subaru brand name.

Yamaha Motor Co., Ltd. manufactures motorcycles.  The Company also produces motor vehicle engines for Toyota Motor Corp. and Ford Motor Co.  Yamaha Motor's specialty products include motor boats, snowmobiles, golf carts, and electric power generators.  Yamaha Motor sells products in Japan, North America, Europe, Asia, and South America.

Isuzu Motors Limited manufactures and markets trucks and automobile parts. The Company's products include pickup trucks, light/heavy duty trucks, medium and large-sized buses, recreational vehicles, and sport utility vehicles.

TVS Motor Company Limited manufactures motorcycles, mopeds, and scooters. The Company provides spark ignition operated outboard motors, combustion spark ignition engines, critical engines, and transmission parts. TVS Motor Company serves customers in India.

Eicher Motors Ltd. manufactures light commercial vehicles which are sold domestically and are also exported to other countries. Eicher Motors also manufactures two-wheelers and automotive gears.

Mazda Motor Corporation manufactures and sells automobiles, trucks, auto parts, and its accessories.  The Company operates its business worldwide.

Guangzhou Automobile Group Company Limited manufactures and sells automobiles. The Company vehicles, motorcycles, and other products. Guangzhou Automobile Group also provides automobile parts manufacturing, automotive business services, automotive finance, and other services.

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Guangzhou Automobile Group (601238 CH)

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

China Auto Sector – Jan NEV likely in line or slightly miss; Li Auto beat

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

CMB International

GAC Group (2238 HK) – We Expect 4Q22 NP to Fall on Equity Income

Net profit in 4Q22 likely to fall YoY and QoQ. We project GAC’s 4Q22 net profit to fall 21% YoY to RMB 1.6bn amid 6% YoY decline in its total sales...

CMB International

GAC Group (2238 HK) – 3Q22 earnings miss on impairment, Toyota

GAC’s 3Q22 earnings were below our prior expectation mainly due to unexpected impairment and QoQ decline of equity income.

CMB International

China Auto Sector – 2H22E likely beat; FY23E consensus overstated

China’s passenger-vehicle (PV) retail sales volume, based on insurance data, rose 9% YoY to 1.86mn units in Sep 2022, 3% lower than our prior...

CMB International

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