Core Viewpoint - The upcoming 8th Hongqiao International Economic Forum will focus on "Promoting Global Energy Transition through High-Quality Development of New Energy Storage" and will feature a significant keynote speech by Wang Shaowu, Vice General Manager of China Southern Power Grid [2][6]. Forum Information - The forum is organized by the National Energy Administration and the Ministry of Commerce, and is hosted by various institutions including the Chinese Academy of Sciences [6]. - The event will take place on November 5, 2025, from 14:30 to 17:30 at the National Exhibition and Convention Center (Shanghai) [7]. - The forum aims to create a high-end storage "ecosystem" by inviting global experts from government, industry, academia, and finance to discuss breakthroughs in storage technology, business model exploration, policy incentives, and international cooperation [7]. Guest Profile - Wang Shaowu, a member of the Party Leadership Group and Vice General Manager of China Southern Power Grid, has extensive experience in high voltage insulation technology and advanced transmission technologies, contributing significantly to China's leadership in ultra-high voltage engineering [5].

Core Insights - BYD has strategically invested in Harmony Auto's overseas electric vehicle platform, iCar Group, acquiring a 10% stake for $40 million, which strengthens their partnership and aims to enhance market competitiveness in overseas markets [1][2][11] - Harmony Auto has been expanding its presence in the electric vehicle sector since 2015 and is now focusing on international markets, particularly in Asia and Europe, to create a second growth curve [2][8] - The investment from BYD reflects a deeper capital connection and aims to leverage BYD's technology and brand influence to solidify Harmony Auto's position in the overseas electric vehicle market [2][12] Investment and Financial Strategy - Prior to BYD's investment, Harmony Auto had already sold 45% of its stake in iCar Group to Epower Global Limited for 330 million yuan, which helped alleviate financial risks by offsetting debts [3][5] - Harmony Auto's stock price surged after announcing the strategic investment, indicating positive market sentiment towards the transaction [3] - The overseas operations of iCar Group have been rapidly expanding, with 40 4S centers and 36 showrooms established across various regions, contributing significantly to Harmony Auto's revenue growth [3][8] Performance Metrics - In the first half of 2025, Harmony Auto reported a 29.1% increase in revenue, with new car sales growing by 36.7%, and a significant improvement in gross profit and net profit margins [6][7] - The overseas market has become a primary revenue source for Harmony Auto, with sales from international markets accounting for 51.3% of total sales [6][8] - Despite the growth, iCar Group has not yet turned a profit, with reported revenues of 0.16 billion yuan and 19.35 billion yuan for 2023 and 2024, respectively, alongside net losses [9][10] Market Dynamics - The partnership between BYD and Harmony Auto is seen as a strategic move to navigate the challenges of the competitive automotive market, particularly in the context of price wars and declining margins in key markets [5][15] - The shift towards an agency model in the automotive industry is noted, where manufacturers retain more control over sales channels, potentially impacting the profitability of traditional dealership models [15] - Analysts predict that BYD's export sales could reach 1 million units by 2025, with iCar Group expected to contribute 7-8% of that volume, indicating a positive outlook for future growth [9][10]

(Incorporated in the Cayman Islands with limited liability) （於開曼群島註冊成立之有限公司） China Harmony Auto Holding Limited 中國和諧汽車控股有限公司 （Stock Code 股份代號：3836） NOTIFICATION LETTER 通知信函 Dear Non-Registered Shareholders(Note 1) 26 September 2025 China Harmony Auto Holding Limited (the "Company") – Notice of publication of Interim Report 2025 (the "Current Corporate Communication") The English and Chinese versions of the Company's Current Corporate Communications are available on the Company's website at www.hexieauto.com ...

China Harmony Auto Holding Limited 中國和諧汽車控股有限公司 (Incorporated in the Cayman Islands with limited liability) （於開曼群島註冊成立之有限公司） （Stock Code 股份代號：3836） NOTIFICATION LETTER 通知信函 Dear Registered Shareholders, 26 September 2025 China Harmony Auto Holding Limited (the "Company") – Notice of publication of Interim Report 2025 (the "Current Corporate Communication") The English and Chinese versions of the Company's Current Corporate Communications are now available on the Company's website at www.hexieauto.com and th ...

Company Information [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) This section lists the company's board members and their roles in the audit, remuneration, and nomination committees, including executive directors, independent non-executive directors, and committee chairpersons - The Board of Directors comprises executive directors Feng Changge (Chairman), Feng Shaolun (Vice Chairman), Liu Fenglei (President), Ma Lintao (Vice President), Cheng Junqiang (Vice President), and independent non-executive directors Wang Nengguang, Liu Guoxun, and Song Jiaheng[3](index=3&type=chunk) - The Audit Committee Chairman is Mr. Wang Nengguang, the Remuneration Committee Chairman is Mr. Song Jiaheng, and the Nomination Committee Chairman is Mr. Feng Changge[3](index=3&type=chunk) [Company Contact and Registration Information](index=3&type=section&id=Company%20Contact%20and%20Registration%20Information) This section provides the company's legal counsel, auditor, principal bankers, registered office, principal place of business, and share registrar information - The Company Secretary is Ms. Wong Wai Yee, and authorized representatives are Mr. Liu Fenglei and Ms. Wong Wai Yee[3](index=3&type=chunk) - The legal counsel is Haiwen & Partners, and the auditor is Beijing Xinghua Dingfeng Certified Public Accountants Co., Ltd[3](index=3&type=chunk) - The company's stock code is **3836**, and its website is www.hexieauto.com[4](index=4&type=chunk) Management Discussion and Analysis [Industry Overview and Outlook](index=5&type=section&id=Industry%20Overview%20and%20Outlook) In the first half of 2025, China's passenger vehicle retail sales increased by 10.8% year-on-year, with new energy vehicle sales growing by 33.3%; the luxury car market faced challenges, experiencing an 11.8% year-on-year decline in sales, while Chinese new energy vehicle brands demonstrated exceptional export performance, growing by 48.0% Overview of China's Passenger Vehicle Market in H1 2025 | Metric | H1 2025 | Y-o-Y Growth | | :--- | :--- | :--- | | Passenger Vehicle Retail Sales | approx. 10.9 million units | 10.8% | | Cumulative NEV Sales | 5.5 million units | 33.3% | - The luxury car market's cumulative sales in H1 2025 were approximately **1.2 million units**, a **11.8% decrease** compared to the same period last year[7](index=7&type=chunk) - China's new energy vehicle exports significantly increased by **48.0%** year-on-year, with BYD's exports growing by **1.3 times**[8](index=8&type=chunk) - Fiscal policies, such as trade-in subsidies and NEV purchase tax incentives, are expected to continue boosting market demand[8](index=8&type=chunk) [Business Review and Outlook](index=6&type=section&id=Business%20Review%20and%20Outlook) In the first half of 2025, the Group achieved a significant 60.6% increase in total sales, driven by strategic overseas market expansion and successful implementation of the '1+2' operating strategy in the domestic market, which also delivered stable operating net profit through focused brand and regional advantages, enhanced synergy, and refined management - Total sales reached **30,666 units** in H1 2025, a significant **60.6% year-on-year increase**[9](index=9&type=chunk) - Sales in Hong Kong and overseas markets reached **15,725 units**, accounting for **51.3%** of total sales and becoming the primary growth driver[9](index=9&type=chunk) - Excluding non-recurring losses of **RMB 32.5 million** related to store closures, adjusted net profit was **RMB 20.7 million**, representing a significant turnaround[9](index=9&type=chunk) [Mainland China Market](index=6&type=section&id=Mainland%20China%20Market) The Mainland China market achieved stable operating net profit through a '1+2' operating strategy (focusing on performance profitability, advantageous brands and regions, and efficient quality) and prudent M&A development; the Group enhanced business synergy, optimized sales pace and model structure, and improved after-sales service gross margin and overall operational efficiency through deep customer demand analysis and refined management - Adjusted operating net profit for the Mainland China market (excluding non-recurring losses related to store closures) was approximately **RMB 17.9 million**[10](index=10&type=chunk) - Adhering to the '1+2' operating strategy, focusing on 3 ultra-luxury brands (Bentley, Rolls-Royce, Ferrari) and 2 luxury brands (BMW, Lexus)[10](index=10&type=chunk) - In H1 2025, the comprehensive gross margin for after-sales services increased from **38.3%** in the same period last year to **39.2%**, a year-on-year increase of approximately **1 percentage point**[12](index=12&type=chunk) - Added **3 Denza brand experience showrooms** to capitalize on the growth opportunities in China's electric vehicle market[13](index=13&type=chunk) [Hong Kong and Overseas Markets](index=8&type=section&id=Hong%20Kong%20and%20Overseas%20Markets) The Group's international new energy vehicle market strategy is showing initial results, establishing a global strategic partnership with BYD, operating 40 4S centers, 36 showrooms, and 6 service centers across Asia-Pacific, Europe, and Africa, with 29 new outlets added in the first half; BYD sales lead in Hong Kong, while Indonesia, Cambodia, and the Philippines markets show significant sales growth, all adopting a 'low-cost, high-efficiency' operating model - Established a global strategic partnership with BYD Company, a leading Chinese automobile manufacturer, for distribution and after-sales services[14](index=14&type=chunk) - As of June 30, 2025, operating **40 4S centers**, **36 showrooms**, and **6 service centers** in Asia, Europe, and Africa, with a total of **29 new outlets** added in the first half[14](index=14&type=chunk) Sales Performance in Hong Kong and Overseas Markets (H1 2025) | Market | Sales (units) | Y-o-Y Growth | | :--- | :--- | :--- | | Hong Kong (BYD) | 4,762 | - | | Indonesia | 2,538 | 226% | | Cambodia | 1,610 | 444% | | Philippines | 1,767 | 89% | - Overseas regions adopt a 'low-cost, high-efficiency' operating model, with lower single-store investment and fewer employees than traditional 4S stores in China[14](index=14&type=chunk) [Future Outlook](index=8&type=section&id=Future%20Outlook) The Group's future systematic deployment will focus on 'framework building, coverage expansion, foundation establishment, refinement, breadth expansion, and deep impact,' aiming to complete global network layout, increase core market density, build localized management and profitability systems, strengthen refined operations, expand NEV-related businesses, and continuously enhance core competitiveness to become the world's largest NEV dealer group - Future plans include rapidly advancing new market development in the Middle East, Africa, and Americas, based on Asia-Pacific and Europe, to complete the global network framework layout[16](index=16&type=chunk) - Continuously building local-demand-oriented management foundations and profitability systems, including talent management, business process standards, used car market business improvement, and integration of derivative business resources like insurance and finance[16](index=16&type=chunk) - Expanding NEV-related businesses such as energy storage, charging solutions, battery repair and recycling, zero-carbon parks, and supporting facilities[16](index=16&type=chunk) - Committed to becoming the world's largest new energy vehicle dealer group[16](index=16&type=chunk) [Financial Review](index=9&type=section&id=Financial%20Review) In the first half of 2025, the Group's total revenue increased by 29.1% to RMB 9,636.6 million, primarily driven by significant growth in automobile and other sales, especially strong performance in Hong Kong and overseas markets; despite a 52.8% increase in gross profit, the period still recorded a loss due to increased selling and distribution expenses and administrative expenses, though the loss significantly narrowed year-on-year - Total revenue for H1 2025 was **RMB 9,636.6 million**, a **29.1% increase** from H1 2024[18](index=18&type=chunk) - Gross profit increased by **52.8%** from **RMB 366.3 million** in H1 2024 to **RMB 559.8 million**, with gross margin improving from **4.9%** to **5.8%**[23](index=23&type=chunk) - Loss attributable to owners of the Company decreased to **RMB 11.8 million**, compared to a loss of **RMB 76.3 million** in H1 2024[31](index=31&type=chunk) [Revenue Analysis](index=9&type=section&id=Revenue%20Analysis) The Group's total revenue in H1 2025 increased by 29.1% to RMB 9,636.6 million; automobile and other sales revenue grew significantly by 36.7%, accounting for 89.0% of total revenue, primarily due to international sales network expansion, while after-sales service and finance lease service revenues decreased; geographically, Hong Kong and overseas revenue surged 5.0 times, comprising 40.5% of total revenue, whereas Mainland China revenue declined by 15.8% Revenue by Type of Goods or Services (RMB million) | Revenue Source | H1 2025 | H1 2024 | Y-o-Y Change | Share of Total Revenue (2025) | | :--- | :--- | :--- | :--- | :--- | | Automobile and Other Sales | 8,577.4 | 6,273.6 | +36.7% | 89.0% | | After-sales Services | 1,044.7 | 1,170.5 | -10.7% | 10.8% | | Finance Lease Services | 14.5 | 22.1 | -34.4% | 0.2% | Revenue by

Core Insights - The article highlights the rapid deployment of the "Repair Management Function" by the Southern Power Grid Internet Company in response to Typhoon "Hagupit," enhancing emergency repair efficiency and coordination [1][2] Group 1: Emergency Response Enhancements - The new repair management function addresses three major pain points: slow command transmission, unclear task assignment, and difficult documentation [1] - The system allows for quick creation of emergency tasks, precise assignment of repair tasks, and standardized management of repair process documentation [1] Group 2: Digital Control Platform - The Southern Power Grid's Smart Engineering Information System is the first fully digital control platform for power grid infrastructure in China, achieving 100% coverage of Southern Power Grid construction projects [2] - The system has authenticated over 870,000 construction personnel, managed over 360,000 construction projects, and deployed more than 25,000 IoT sensing devices [2] - Prior to Typhoon "Hagupit," the system entered "Typhoon Warning Mode," sending out 28,715 warning messages to remind construction sites to secure equipment and evacuate personnel [2]

Core Viewpoint - The construction of the Zang-Guangdong DC project marks the initiation of the world's strongest flexible DC transmission project, which will deliver over 43 billion kilowatt-hours of clean energy annually to the Guangdong-Hong Kong-Macao Greater Bay Area after its full operation in 2029 [2][3]. Group 1: Project Overview - The Zang-Guangdong DC project is a key cross-province transmission project under China's 14th Five-Year Plan, with a total length of approximately 2,681 kilometers and a transmission capacity of 10 million kilowatts [2][3]. - The project is expected to replace approximately 12 million tons of standard coal consumption and reduce carbon dioxide emissions by about 33 million tons annually [2][3]. Group 2: Investment and Economic Impact - The total investment for the Zang-Guangdong DC project is approximately 53.2 billion yuan, with an additional investment of over 150 billion yuan for the supporting "water-wind-solar integrated" power generation base [3]. - The project is anticipated to create over 100,000 direct jobs during peak construction, significantly promoting the economic and social development of Tibet [3]. Group 3: Technological Challenges and Innovations - The project faces significant challenges, including the development of new technologies for ultra-high altitude DC transmission and the integration of 20 million kilowatts of renewable energy into a weak grid [4][5]. - The project aims to establish a new model for energy production and consumption, contributing to China's dual carbon goals through high-level technological self-reliance and innovation [4][5]. Group 4: Collaborative Efforts - The Zang-Guangdong DC project is a collaboration between China Southern Power Grid Co., Ltd. and State Grid Corporation of China, marking another significant clean energy transmission project following previous successful collaborations [5]. - The project will leverage advanced technologies and equipment, including high-power semiconductor devices and digital twin technology, to enhance operational efficiency and reduce maintenance needs in remote areas [5].

Investment Rating - The report gives a "Buy" rating for the company, with a target price range of HKD 3.28 to HKD 4.11, corresponding to a market capitalization range of HKD 49.93 billion to HKD 62.57 billion [6]. Core Views - The company is a leading luxury and ultra-luxury car dealer in China, with a strategic shift towards new energy vehicles (NEVs) in partnership with BYD, aiming to expand its market presence in Hong Kong and overseas [6][12]. - The company has successfully established 100 BYD stores in Hong Kong and overseas within two years, leveraging its strong dealership capabilities and operational experience [6][48]. - The company's revenue from Hong Kong and overseas markets has increased significantly, with a fivefold growth in the first half of 2025, driven by the sales of BYD vehicles [19][22]. Summary by Sections Investment Highlights - The company focuses on luxury and ultra-luxury car sales, providing a full lifecycle service including new car sales, financing, insurance, and after-sales services [8][12]. - In 2024, the company ranked 26th among the top 100 automotive dealers in China, with a total revenue of CNY 17.067 billion and total vehicle sales of 48,000 units [12][17]. Partnership with BYD - The collaboration with BYD began in 2023, aiming to accelerate the expansion of sales channels in Asia and Europe, transitioning towards NEVs and export markets [6][12]. - The partnership has evolved from a business collaboration to a capital cooperation, with BYD acquiring a 10% stake in the company's overseas operations [6][9]. Financial Projections - The company is projected to achieve revenues of CNY 28.103 billion, CNY 38.488 billion, and CNY 44.961 billion from 2025 to 2027, with corresponding net profits of CNY 0.61 billion, CNY 2.43 billion, and CNY 4.16 billion [2][6]. - The earnings per share (EPS) are expected to be CNY 0.04, CNY 0.16, and CNY 0.27 for the same period [2][6]. Market Performance - In the first half of 2025, the company reported a revenue of CNY 9.64 billion, a year-on-year increase of 25.7%, with significant contributions from Hong Kong and overseas markets [19][22]. - The gross margin improved to 5.8%, with new car sales margins turning positive for the first time [24][32]. Operational Efficiency - The company has maintained a stable inventory turnover rate of 4.64 times, while the accounts receivable turnover rate decreased due to longer payment cycles in overseas markets [38][41]. - As of the first half of 2025, the company's debt ratio was 55.8%, indicating a healthy financial position with sufficient cash reserves [41][42].

Core Viewpoint - China Galaxy Securities initiates coverage on Harmony Auto, giving it a "Buy" rating, with projected revenues and profits for 2025-2027 indicating strong growth potential [1] Group 1: Financial Projections - Expected revenues for Harmony Auto are projected at 28.103 billion yuan, 38.488 billion yuan, and 44.961 billion yuan for 2025, 2026, and 2027 respectively [1] - Corresponding net profits are forecasted to be 61 million yuan, 243 million yuan, and 416 million yuan for the same years [1] - The estimated earnings per share (EPS) are 0.04 yuan, 0.16 yuan, and 0.27 yuan for 2025, 2026, and 2027 respectively [1] - The reasonable per-share value range is set between 3.28 yuan and 4.11 yuan, translating to a market capitalization range of 4.993 billion yuan to 6.257 billion yuan [1] Group 2: Company Overview - Harmony Auto is a leading pure luxury and ultra-luxury automotive dealership group in China, representing 14 luxury and ultra-luxury brands [2] - The company ranks 26th in the top 100 automotive dealers in China for 2024, with total revenue of 17.067 billion yuan and total vehicle sales of 48,000 units [2] - Harmony Auto entered the new energy vehicle sector in 2015 and has established strategic partnerships with Tencent and Foxconn [2] Group 3: Strategic Partnerships and Market Expansion - In 2023, Harmony Auto partnered with BYD to establish sales channels in Asia and Europe, focusing on new energy vehicles and exports [2][3] - The company has demonstrated strong dealership capabilities, rapidly expanding its presence in the Asia-Pacific, Europe, and Oceania regions [3] - By 2025, Harmony Auto plans to open its 100th store in Melbourne, showcasing its effective channel construction capabilities [3] Group 4: Future Outlook - BYD's technological advancements, such as blade batteries and CTB, are gaining global recognition, with expectations of exporting 1 million vehicles by 2025 [4] - Harmony Auto is anticipated to contribute 7-8% of sales through its channels in the Asia-Pacific, Europe, and Oceania regions [4]

Group 1 - The core viewpoint of the report is that Harmony Auto (03836) is expected to achieve significant revenue and profit growth from 2025 to 2027, with projected revenues of 28.103 billion yuan, 38.488 billion yuan, and 44.961 billion yuan, and net profits of 0.61 billion yuan, 2.43 billion yuan, and 4.16 billion yuan respectively [1] - The company is a leading pure luxury and ultra-luxury automotive dealership group in China, with 14 luxury and ultra-luxury brands under its umbrella, including Rolls-Royce, Bentley, Ferrari, Maserati, and Lamborghini [2] - Harmony Auto ranks 26th in the top 100 automotive dealers in China for 2024, with total revenue of 17.067 billion yuan and total vehicle sales of 48,000 units [2] Group 2 - The company has established a strong partnership with BYD, enhancing its market presence in Asia and Europe, and has begun to transition towards new energy vehicles [3] - Harmony Auto has demonstrated its capability in dealership construction and operations, rapidly expanding its channels in the Asia-Pacific, Europe, and Oceania regions [3] - The company opened its 100th store in Melbourne within two years, showcasing its effective channel-building ability [3] Group 3 - BYD's technological advancements, such as blade batteries and CTB, have gained global market recognition, with expectations of exporting 1 million vehicles by 2025 [4] - Harmony Auto is projected to contribute 7-8% of sales volume through its channels in the Asia-Pacific, Europe, and Oceania regions [4]