Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>Huawei’s decision to accept investments to its Intelligent Automotive Solution (HI) has no impact on its Harmony Intelligent Mobility Alliance (HIMA). It might actually strengthen it, in our view;</li>
<li>We also believe it concludes Huawei’s internal battle of visions.</li>
<li>The newly integrated business has short term impacts on Li, Nio and XPeng and long-term impact on Baidu and Xiaomi.</li>
</ul>


Huawei’s decision to accept investments to its Intelligent Automotive Solution (HI) has no impact on its Harmony Intelligent Mobility Alliance (HIMA). It might actually strengthen it, in our view;
We also believe it concludes Huawei’s internal battle of visions.
The newly integrated business has short term impacts on Li, Nio and XPeng and long-term impact on Baidu and Xiaomi.


[Blue Lotus Transportation Sector Update]: Huawei’s R&D & Marketing Alignment Makes It Stronger

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Li Auto's revenue increased by 271% YoY and vehicle deliveries increased by 296% YoY in 3Q23.</li>
<li>NIO will dismiss 10% of its employees and even 20% in some departments.</li>
<li>We do not believe Alibaba will take over the whole Best Inc.</li>
</ul>


Li Auto's revenue increased by 271% YoY and vehicle deliveries increased by 296% YoY in 3Q23.
NIO will dismiss 10% of its employees and even 20% in some departments.
We do not believe Alibaba will take over the whole Best Inc.


China Consumption Weekly (13Nov2023): Li Auto, NIO, Alibaba, Best, Meituan, KE

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.

<ul><li>We are of the view that Li Auto’s 3Q23 earnings were largely in line, as investors have factored in the stiffer competition.</li><li>We believe its upcoming flagship model, the Mega, could be a positive catalyst for share price, as its controversial design could lure more attention and lower the product cannibalization.</li><li>We cut our FY24E net profit by RMB 3bn to RMB 14.5bn, mainly due to its accelerated R&amp;D investments.</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>

We are of the view that Li Auto’s 3Q23 earnings were largely in line, as investors have factored in the stiffer competition.We believe its upcoming flagship model, the Mega, could be a positive catalyst for share price, as its controversial design could lure more attention and lower the product cannibalization.We cut our FY24E net profit by RMB 3bn to RMB 14.5bn, mainly due to its accelerated R&amp;D investments.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) – Mega Could Be a Positive Catalyst

<ul>
<li>Two days before Huawei and Chery releasing their Luxeed S7 sedan to rival Model 3, LI unveiled the technical details of its MPV entry MEGA; </li>
<li>We see MEGA taking a meaningful market share from BYD’s Denza D9, GM’s GL8, GAC’s Trumpchi M8, all selling ~10K a month. We raise MEGA’s 2024 shipment to 57K;</li>
<li>We raise LI’s TP from US$40 to US$47 and maintain BUY.</li>
</ul>


Two days before Huawei and Chery releasing their Luxeed S7 sedan to rival Model 3, LI unveiled the technical details of its MPV entry MEGA; 
We see MEGA taking a meaningful market share from BYD’s Denza D9, GM’s GL8, GAC’s Trumpchi M8, all selling ~10K a month. We raise MEGA’s 2024 shipment to 57K;
We raise LI’s TP from US$40 to US$47 and maintain BUY.


[Li Auto Inc. (LI US, BUY, TP US$47) Target Price Change]: Li’s MEGA Can Change the MPV Landscape

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/robosense-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:39903:1" rel="noopener">Robosense Technology (2498 HK)</a> raised around US$126m in its Hong Kong IPO in Jan 2024. The lockup on its shareholders will expire soon.</li>
<li>The company provides LiDAR and perception solutions to its customers. As of March 2024, it had design wins for mass production of LiDAR products with 22 automotive OEMs and suppliers.</li>
<li>In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.</li>
</ul>



Robosense Technology (2498 HK) raised around US$126m in its Hong Kong IPO in Jan 2024. The lockup on its shareholders will expire soon.
The company provides LiDAR and perception solutions to its customers. As of March 2024, it had design wins for mass production of LiDAR products with 22 automotive OEMs and suppliers.
In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.


Robosense IPO Lock-Up Expiry - US$2.8bn Lockup Expiry for 99% of the Stock, CCASS Movement

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)

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)

SAIC Motor Corporation Ltd., through joint ventures, manufactures and markets automobiles and related parts and accessories.

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.

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

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.

Suzuki Motor Corporation manufactures automobiles, motorcycles, and their related parts. The Company has production facilities in USA, Japan, Taiwan, India, Pakistan, Indonesia, Thailand, and Hungary.

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.

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)

[Blue Lotus Transportation Sector Update]: Huawei’s R&D & Marketing Alignment Makes It Stronger

Huawei's acceptance of investments for its Intelligent Automotive Solution (HI) does not affect its Harmony Intelligent Mobility Alliance (HIMA),...

Blue Lotus Research Institute

China Consumption Weekly (13Nov2023): Li Auto, NIO, Alibaba, Best, Meituan, KE

Li Auto, Revenue increased by 271% YoY and vehicle deliveries increased by 296% YoY in 3Q23. NIO will dismiss 10% of its employees. We do not...

Ming Lu

Li Auto Inc. (LI US) – Mega Could Be a Positive Catalyst

We believe its upcoming flagship model, the Mega, could be a positive catalyst for share price, as its controversial design could lure more...

CMB International

[Li Auto Inc. (LI US, BUY, TP US$47) Target Price Change]: Li’s MEGA Can Change the MPV Landscape

"LI unveils technical details of MEGA MPV, expected to compete with Denza D9, GL8, and Trumpchi M8. Shipment estimate raised to 57K by 2024. LI's...

Blue Lotus Research Institute

Robosense IPO Lock-Up Expiry - US$2.8bn Lockup Expiry for 99% of the Stock, CCASS Movement

The pre-IPO shareholders came out of lockup today, leading to a 67% drop in the share price with an accompanying spike in volumes.

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Blue Lotus Transportation Sector Update]: Huawei’s R&D & Marketing Alignment Makes It Stronger

​Huawei's acceptance of investments for its Intelligent Automotive Solution (HI) does not affect its Harmony Intelligent Mobility Alliance (HIMA),...

Blue Lotus Research Institute

China Consumption Weekly (13Nov2023): Li Auto, NIO, Alibaba, Best, Meituan, KE

Li Auto, Revenue increased by 271% YoY and vehicle deliveries increased by 296% YoY in 3Q23. NIO will dismiss 10% of its employees. We do not...

Ming Lu

Li Auto Inc. (LI US) – Mega Could Be a Positive Catalyst

We believe its upcoming flagship model, the Mega, could be a positive catalyst for share price, as its controversial design could lure more...

CMB International

[Li Auto Inc. (LI US, BUY, TP US$47) Target Price Change]: Li’s MEGA Can Change the MPV Landscape

​"LI unveils technical details of MEGA MPV, expected to compete with Denza D9, GL8, and Trumpchi M8. Shipment estimate raised to 57K by 2024. LI's...

Blue Lotus Research Institute

Robosense IPO Lock-Up Expiry - US$2.8bn Lockup Expiry for 99% of the Stock, CCASS Movement

The pre-IPO shareholders came out of lockup today, leading to a 67% drop in the share price with an accompanying spike in volumes.

Sumeet Singh

Huawei's acceptance of investments for its Intelligent Automotive Solution (HI) does not affect its Harmony Intelligent Mobility Alliance (HIMA),...

"LI unveils technical details of MEGA MPV, expected to compete with Denza D9, GL8, and Trumpchi M8. Shipment estimate raised to 57K by 2024. LI's...