China Specialist, Auto and Industrial Specialist

Victoria Li

Equity Bottom-Up

<ul>
<li>After the wait of nearly a year, management announced that it will start ET7 delivery on 28th March. However market pushback rises.</li>
<li>The newly announced new ET5 is lacking an exciting selling point, doubtful if it will attract enough potential buyers to give up existing well-known competitor models and wait for it.</li>
<li>YTD, NIO (NIO US) underperformed its peers by nearly 40% due to lagging monthly delivery. It would continue to underperform peers in the next three years.</li>
</ul>


After the wait of nearly a year, management announced that it will start ET7 delivery on 28th March. However market pushback rises.
The newly announced new ET5 is lacking an exciting selling point, doubtful if it will attract enough potential buyers to give up existing well-known competitor models and wait for it.
YTD, NIO (NIO US) underperformed its peers by nearly 40% due to lagging monthly delivery. It would continue to underperform peers in the next three years.


Investment Advisors, JL Warren Capital

Junheng Li

Investment Advisors

JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Thematic (Sector/Industry)

<ul>
<li>We model GF3 production to reach 65+K, and <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a>  to delivery 45-50K onshore in December, China is to reach ~30+% global deliveries. </li>
<li>We model <a href="https://www.smartkarma.com/entities/nio-inc" target="_blank" data-smartkarma-citation="entities:27399:1" rel="noopener">NIO Inc (NIO US)</a>  production to reach ~11K in December, Q4 deliveries are likely miss, without "manipulation"; </li>
<li>
<a href="https://www.smartkarma.com/entities/xpeng-inc" target="_blank" data-smartkarma-citation="entities:29217:1" rel="noopener">Xpeng (XPEV US)</a>  Zhaoqing factory production declines MoM, but Q4 deliveries are set to beat guidance due to stronger than expected G3i orders. </li>
</ul>


We model GF3 production to reach 65+K, and Tesla Motors (TSLA US)  to delivery 45-50K onshore in December, China is to reach ~30+% global deliveries. 
We model NIO Inc (NIO US)  production to reach ~11K in December, Q4 deliveries are likely miss, without "manipulation"; 

Xpeng (XPEV US)  Zhaoqing factory production declines MoM, but Q4 deliveries are set to beat guidance due to stronger than expected G3i orders. 


China NEV Week 49 2021 Update: TSLA, NIO, XPEV Production, Deliveries

Forensic Analyst

Jason Yap, CFA

Forensic Accounting

<ul>
<li>China’s favourable policies have been important drivers of the New Energy Vehicle (NEV) market</li>
<li>However, we are starting to see renewed efforts for the NEV sector to wean off policy support while traditional automakers are becoming increasingly competitive in this space</li>
<li>We discuss the latest NEV sector policy changes and its implications </li>
</ul>


China’s favourable policies have been important drivers of the New Energy Vehicle (NEV) market
However, we are starting to see renewed efforts for the NEV sector to wean off policy support while traditional automakers are becoming increasingly competitive in this space
We discuss the latest NEV sector policy changes and its implications 


China's EV Sector Policy Support Wean-Off and Its Implications

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Hang Seng China Enterprises Index / Event-Driven

<ul>
<li>With the 2021 futures expiring in 2 weeks, the focus now shifts to the HSCEI dividend futures expiring in 2022 where we see a fair value of 240.76 DIPS.</li>
<li>The current market is trading very close to our fair value for 2022 but there are a lot of potential catalysts that could result in a big move lower.</li>
<li>There are fewer catalysts for the 2022 futures to move higher. The regulatory changes in China plus the HFCAA could lead to the 2023 futures trading cheaper to 2022.</li>
</ul>


With the 2021 futures expiring in 2 weeks, the focus now shifts to the HSCEI dividend futures expiring in 2022 where we see a fair value of 240.76 DIPS.
The current market is trading very close to our fair value for 2022 but there are a lot of potential catalysts that could result in a big move lower.
There are fewer catalysts for the 2022 futures to move higher. The regulatory changes in China plus the HFCAA could lead to the 2023 futures trading cheaper to 2022.


HSCEI Dividend Futures: 2022 Close to Fair; Sell 22/23 Steepener

<ul>
<li>Didi's announced that it would delist from US and prepare for a public listing in Hongkong</li>
<li>Didi is racing against time to do so due to various factors such as, lock-up expiry, HK Stock Exchange review of listing applications, and potential cybersecurity review for HK issuers</li>
<li>There could be parallels in terms of key risks for other non-dual listed China ADSs</li>
</ul>


Didi's announced that it would delist from US and prepare for a public listing in Hongkong
Didi is racing against time to do so due to various factors such as, lock-up expiry, HK Stock Exchange review of listing applications, and potential cybersecurity review for HK issuers
There could be parallels in terms of key risks for other non-dual listed China ADSs


Didi (Didi US)'s Delisting and Its Implications for Non-Dual Listed China ADS

China

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

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NIO (NIO US)

NIO: Is the Future Still with NIO?

After the wait of nearly a year, management announced that it will start ET7 delivery on 28th March. However market pushback rises.

Victoria Li

China NEV Week 49 2021 Update: TSLA, NIO, XPEV Production, Deliveries

Weekly update on TSLA, NIO and XPEV production and delivery data in China: TSLA China likely exceed 92K, XPEV 38K, NIO 23-24K in Q4, respectively.

JL Warren Capital

China's EV Sector Policy Support Wean-Off and Its Implications

China's NEV sector is weaning off policy support while traditional automakers are becoming increasingly competitive. We discuss the latest NEV...

Jason Yap, CFA

HSCEI Dividend Futures: 2022 Close to Fair; Sell 22/23 Steepener

The HSCEI 2022 dividend futures are trading close to fair but there are a lot more negative catalysts that will have a bigger impact than positive...

Brian Freitas

Didi (Didi US)'s Delisting and Its Implications for Non-Dual Listed China ADS

As Didi races against time to delist from US, it faces, amongst others, lock-up expiry, HK listing review, and potential cybersecurity review. What...

Jason Yap, CFA

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