Summary of the Conference Call for Longxin General Company Overview - **Company**: Longxin General - **Core Business Focus**: "Motorcycles + General Machinery" after divesting non-core businesses, with three main segments: motorcycles, all-terrain vehicles, and general machinery [2][3] Key Points and Arguments Strategic Developments - **Business Growth**: Expected revenue CAGR of 12.7% from 2019 to 2024, with all three core business segments projected to grow by 2025 [2][8] - **BMW Partnership**: Collaboration with BMW since 2005 has been pivotal for entering the large-displacement motorcycle engine market, significantly enhancing product performance and market competitiveness [2][4][5] Financial Performance - **Revenue Composition**: By mid-2025, overseas revenue is expected to account for nearly 70% of total revenue, indicating a strong international market presence [2][8] - **Profitability Improvement**: Net profit for 2025 is projected to be between 1.65 billion to 1.8 billion CNY, with a significant increase in net profit margin by 3 percentage points year-on-year [4][9] - **Product Margin**: Continuous improvement in gross and net profit margins due to product structure adjustments, with gross margin at 18.8% and net margin at 10% by Q3 2025 [8] Market Dynamics - **Motorcycle Production and Sales**: Anticipated double-digit growth in both production and sales from 2020 to 2024, with average unit price increasing from 3,000 CNY to nearly 6,000 CNY [2][14] - **Brand Performance**: The "Wujie" brand is expected to see a revenue CAGR of 62.4% from 2019 to 2024, contributing over 30% to motorcycle sales revenue by 2025 [2][15] Competitive Landscape - **Global Motorcycle Market**: The global motorcycle industry is projected to reach a size of 156.59 billion USD by 2024, with a CAGR of approximately 5% from 2020 to 2029 [10] - **Market Share Trends**: Japanese brands, particularly Honda, dominate Southeast Asia and Latin America, while Chinese brands like Chunfeng and Wujie are gradually increasing their market share in these regions [11] Domestic Market Insights - **Sales Dynamics**: Domestic sales are experiencing pressure due to a cooling demand post-pandemic, while exports, particularly to Southeast Asia and Latin America, are robust [12][14] - **Competition in Displacement Segments**: The competition landscape differs between large and small displacement motorcycles, with established players like Chunfeng and Longxin leading in the large displacement segment [13] Future Outlook - **All-Terrain Vehicle Growth**: Revenue from all-terrain vehicles is expected to grow significantly, with a projected increase from 1 billion CNY to 4 billion CNY from 2019 to 2024 [22] - **Garden Machinery Focus**: The garden machinery segment is focusing on core products like lawnmowers and is planning to introduce robotic lawnmowers, which are expected to drive future growth [23] - **Profit Forecasts**: The forecast for net profit in 2026 is approximately 2.3 billion CNY, with a PE ratio of about 13 times [24] Additional Important Insights - **Channel Strategy**: The domestic channel expansion is expected to slow down in 2025-2026, focusing more on product innovation rather than sheer quantity of channels [20][21] - **Market Opportunities in Latin America**: The company aims to expand into Brazil and Mexico, which represent significant opportunities due to their high demand for small displacement motorcycles [18]

Event Overview - In January 2026, the sales of motorcycles above 250cc reached 64,000 units, representing a year-on-year increase of 8.2% but a month-on-month decrease of 7.4% [2] Industry Performance - The sales of motorcycles above 125cc in January were 669,000 units, up 10.7% year-on-year and 2.2% month-on-month, with significant contributions from the 125-150cc and 500-800cc segments [3] - Exports of motorcycles above 250cc in January totaled 45,000 units, a year-on-year increase of 15.3% and a month-on-month increase of 9.7% [3] - Domestic sales of motorcycles above 250cc in January were 19,000 units, down 5.9% year-on-year and 32.6% month-on-month [4] Structural Insights - Sales of motorcycles with engine displacement between 250cc and 400cc reached 37,000 units in January, up 5.9% year-on-year but down 17.7% month-on-month [5] - Sales of motorcycles with engine displacement between 400cc and 500cc were 9,000 units, down 2.7% year-on-year and 1.5% month-on-month [5] - Sales of motorcycles with engine displacement between 500cc and 800cc reached 15,000 units, up 24.9% year-on-year and 20.6% month-on-month [5] - Sales of motorcycles above 800cc were 2,000 units, down 3.8% year-on-year but up 27.0% month-on-month [5] Company Performance - In January, the top three companies in the 250cc+ segment were Longxin General, Chuanfeng Power, and Qianjiang Motorcycle, with a combined market share of 47.5%, an increase of 0.9 percentage points compared to the entire year of 2025 [5] - Longxin General sold 11,000 units in January, up 27.7% year-on-year, with a market share of 17.7% [6] - Chuanfeng Power's sales in January were also 11,000 units, up 38.9% year-on-year, with a market share of 17.5% [6] - Qianjiang Motorcycle sold 8,000 units in January, down 25.5% year-on-year, with a market share of 12.3% [6] Chuanfeng Power Insights - Chuanfeng Power's total two-wheeler sales in January were 47,000 units, up 132.3% year-on-year and 26.2% month-on-month [7] - The sales of fuel motorcycles were 19,000 units, up 43.6% year-on-year but down 7.8% month-on-month [7] - The sales of electric motorcycles reached 29,000 units, up 208.3% year-on-year and 66.9% month-on-month [7] Qianjiang Motorcycle Developments - Qianjiang Motorcycle's total sales in January were 36,000 units, down 1.6% year-on-year but up 46.3% month-on-month [20] - Exports in January were 26,000 units, up 60.6% year-on-year and 34.6% month-on-month [21] - The company is enhancing its product definition capabilities and has introduced new models to boost sales [23] Longxin General Developments - Longxin General's motorcycle sales in January were 106,000 units, down 34.2% year-on-year and 25.3% month-on-month [14] - The company is focusing on motorcycle exports and has seen a decline in domestic sales [14] Market Outlook - The market for large-displacement motorcycles is expected to continue growing, driven by new models and brands entering the market [24] - The domestic motorcycle market is anticipated to benefit from the increasing demand for larger displacement motorcycles, with companies like Chuanfeng Power, Longxin General, and Qianjiang Motorcycle positioned to capitalize on this trend [24]

Core Viewpoint - The motorcycle industry is experiencing steady growth in mid-to-large displacement motorcycle sales, with exports showing significant increases while domestic sales remain relatively flat. The supply of motorcycles is expected to continue expanding, driven by leading companies like Chunfeng Power, Longxin General, and Qianjiang Motorcycle focusing on export business, which may lead to a positive upward trend in both domestic and international sales by 2026 [2][3]. Monthly Data Observation - In January 2026, the sales of motorcycles with a displacement of 250cc and above reached 64,000 units, representing an 8.2% year-on-year increase but a 7.4% month-on-month decrease [4]. - Sales breakdown by displacement categories for January 2026: - 250cc < displacement ≤ 400cc: 37,000 units, +5.9% YoY, -17.7% MoM - 400cc < displacement ≤ 500cc: 9,000 units (Chunfeng: 6,000 units), -2.7% YoY, -1.5% MoM - 500cc < displacement ≤ 800cc: 15,000 units (Chunfeng: 5,000 units), +24.9% YoY, +20.6% MoM - Displacement > 800cc: 2,000 units (Longxin: 1,000 units), -3.8% YoY, +27.0% MoM [4]. Company Performance - Longxin General sold 11,000 units in January 2026, a 27.7% increase YoY, with a market share of 17.7%, up 2.7 percentage points from the previous month and 2.9 percentage points from the entire year of 2025 [4]. - Chunfeng Power also sold 11,000 units in January 2026, marking a 38.9% increase YoY, with a market share of 17.5%, up 2.7 percentage points from the previous month but down 2.3 percentage points compared to the entire year of 2025 [4]. - Qianjiang Motorcycle sold 8,000 units in January 2026, a 25.5% decrease YoY, with a market share of 12.3%, up 6.8 percentage points from the previous month and up 0.4 percentage points from the entire year of 2025 [4].

Core Viewpoint - Longxin General's stock experienced a decline of 3.93% on February 25, with a trading volume of 458 million yuan, indicating market volatility and investor sentiment towards the company [1]. Financing Summary - On February 25, Longxin General had a financing buy-in amount of 51.57 million yuan and a net financing buy of 26.07 million yuan, with a total financing and securities balance of 265 million yuan [1]. - The current financing balance of 262 million yuan accounts for 0.80% of the circulating market value, which is below the 30th percentile level over the past year, indicating a low financing level [1]. - In terms of securities lending, 13,000 shares were repaid while 24,400 shares were sold, with a selling amount of 388,000 yuan, and the securities lending balance was 2.75 million yuan, exceeding the 60th percentile level over the past year, indicating a high level [1]. Financial Performance - As of September 30, Longxin General reported a total revenue of 14.557 billion yuan for the period from January to September 2025, representing a year-on-year growth of 19.14% [2]. - The net profit attributable to shareholders reached 1.577 billion yuan, showing a significant year-on-year increase of 75.45% [2]. Shareholder and Dividend Information - Longxin General has distributed a total of 4.016 billion yuan in dividends since its A-share listing, with 1.602 billion yuan distributed over the past three years [3]. - As of September 30, 2025, the number of shareholders increased to 35,400, up by 18.78%, while the average circulating shares per person decreased by 15.81% to 58,032 shares [2][3]. - Hong Kong Central Clearing Limited is the third-largest circulating shareholder, holding 141 million shares, an increase of 34.85 million shares compared to the previous period [3].

Group 1 - The core objective of the asset swap between Zongshen Power and Longxin General is to resolve the issue of industry competition and achieve business focus and specialization [1][2][3] - After the asset swap, Longxin General will concentrate on motorcycle and engine businesses, while Zongshen Power will focus on general machinery [2][5] - As of September 2025, Zongshen Power and Longxin General have total assets of approximately 12.7 billion and 17.67 billion respectively, with motorcycle sales in 2024 reaching 1.8 million and 1.54 million units, ranking second and third in the industry [3][4] Group 2 - In the first half of 2025, Zongshen Power's motorcycle engine business generated total revenue of 2.33 billion, a year-on-year increase of 14.39%, while its general machinery business achieved revenue of 3.65 billion, up 73.06% [4] - Longxin General's motorcycle business generated sales revenue of 7.27 billion in the first half of 2025, a year-on-year increase of 23.14%, with the Wujie VOGE series contributing 1.98 billion, up 30.23% [4] - For the year 2025, Zongshen Power's net profit is expected to be between 646 million and 738 million, while Longxin General's net profit is projected to be between 1.65 billion and 1.8 billion, leading to a combined profit of over 2.296 billion [6]

Group 1: Resumption of Trading - Yongtai Technology has terminated the purchase of 25% equity in Yongtai High-tech from CATL, leading to the resumption of its stock trading [1] - Runze Technology plans to acquire 42.56% equity in Guangdong Runhui through a convertible bond issuance, further integrating IDC and AIDC business resources, resulting in stock resumption [1] Group 2: Capital Increase and Restructuring - Zongshen Power intends to swap its motorcycle engine business with Longxin General's general machinery business, which is expected to constitute a major asset restructuring [2] - Nanjing Chemical Fiber plans to acquire 100% equity in Nanjing Craft through asset swaps, share issuance, and cash payments [3] - Southwest Securities plans to raise no more than 6 billion yuan through a private placement [4] Group 3: Equity Transfer and Buyback - Hemai Co., Ltd. has a planned agreement to transfer 5.99% equity from Hainan Xinhai [5] - Luxshare Precision has conducted its first share buyback of 9.9 million shares, with a total transaction amount of nearly 500 million yuan [6] Group 4: External Investment and Daily Operations - Gaode Infrared has signed a contract for a complete equipment system worth 1.851 billion yuan, accounting for 69% of its audited revenue for 2024 [7] - Shenghong Technology now holds 100% equity in SPMY, with the target company becoming its FPC/PCB production base in Malaysia [7] - BGI Genomics plans to sell 100% equity in Complete Genomics for 50 million USD and adjust the licensing of CoolMPS sequencing technology [8] - Aolian Electronics' controlling shareholder, Ruiying Assets, has terminated the control transfer with Chaocheng Innovation [9] - Frontier Biotech has signed a licensing agreement with GlaxoSmithKline, receiving a 40 million USD upfront payment and 13 million USD in milestone payments [9] - Baili Tianheng's clinical trial for iza-bren (EGFR×HER3 dual antibody ADC) for locally advanced or metastatic triple-negative breast cancer has reached its primary endpoint in interim analysis [9] - Donghong Co., Ltd. has won a procurement project for pressure steel pipes and accessories worth 353 million yuan [10] - ST Xintong's subsidiary has signed a server procurement contract worth 400 million yuan [11] Group 5: Performance Changes - Yingshi Innovation expects a net profit of 964 million yuan in 2025, a year-on-year decrease of 3.08% [12]

Group 1 - The core viewpoint of the articles highlights the declining production and sales figures of Chongqing Longxin Motorcycle Co., Ltd. in 2025, indicating a significant downturn in the motorcycle industry [1][2] - In December 2025, Chongqing Longxin's motorcycle production was 117,401 units, a year-on-year decrease of 31.63%, while sales were 142,389 units, down 9.67% [1] - For the entire year of 2025, the cumulative production of Chongqing Longxin was 1,620,837 units, reflecting an 11.26% year-on-year decline, and total sales reached 1,645,168 units, down 8.74% year-on-year [1] Group 2 - The data source for the motorcycle production and sales statistics is the China Automotive Industry (Motorcycle) Production and Sales Quick Report, compiled by Zhiyan Consulting [2] - Zhiyan Consulting is recognized as a leading industry consulting firm in China, specializing in in-depth industry research reports and providing comprehensive industry solutions to support investment decisions [2]

Core Viewpoint - Longxin General Power Co., Ltd. plans to conduct an asset swap with Chongqing Zongshen Power Machinery Co., Ltd. to address the issue of competition in the motorcycle and general machinery sectors, aiming for business focus and specialization [2][3] Group 1: Asset Swap Details - Longxin General intends to exchange its general machinery-related assets and liabilities, primarily the equity of Chongqing Xinlongxin Electromechanical Co., Ltd., for Zongshen Power's motorcycle engine-related assets and liabilities, mainly the equity of Chongqing Zongshen Engine Manufacturing Co., Ltd. [2] - The difference in the valuation of the swapped assets will be compensated in cash by one party to the other, and the transaction will not involve issuing shares or changing the controlling shareholder [2] Group 2: Background and Strategic Focus - The asset swap is motivated by a change in the actual controller of Longxin General, which will occur in December 2024, leading to indirect control by Zongshen Industrial Group Co., Ltd. This has resulted in competition in related business areas with subsidiaries controlled by Zongshen Group, including Zongshen Power [2] - Post-transaction, Longxin General will focus its resources on developing motorcycle complete vehicles and motorcycle engine businesses, emphasizing core power technology research and global channel layout to enhance its motorcycle powertrain capabilities [3]

Financial Data - As of the end of January, the social financing scale increased by 8.2% year-on-year, and the broad money supply (M2) grew by 9.0%, significantly higher than the nominal GDP growth rate, creating a favorable monetary environment for economic recovery [3]. Stock Market Adjustments - The Hang Seng Index will increase its constituent stocks from 88 to 90, with the inclusion of CATL, Luoyang Molybdenum, and Laopu Gold, while Zhongsheng Holdings will be removed. These changes will take effect after the market closes on March 6 and will be implemented on March 9 [3]. Regulatory Actions - The China Securities Regulatory Commission (CSRC) announced administrative penalties and market bans against Tianfeng Securities for alleged violations related to financing and information disclosure for Wuhan Contemporary Technology Industry Group [3]. Company News - Southwest Securities plans to issue A-shares to specific investors, raising up to 6 billion yuan to supplement its capital for various business operations [7]. - SAIC Group's subsidiary, SAIC Jin控, will establish a private equity fund with an initial subscription of 2.5 billion yuan, focusing on solid-state batteries and other advanced technologies [8]. - KOTAI Power has decided to terminate its H-share issuance preparations, stating that this decision will not significantly impact its operations [8]. - YG Chip received a notice from the CSRC regarding an investigation for suspected information disclosure violations, while its business activities continue normally [8]. - Meituan expects a loss of 23.3 billion to 24.3 billion yuan for the fiscal year 2025, primarily due to a shift from a profit of approximately 52.4 billion yuan in 2024 to an operational loss in 2025, alongside increased investments in overseas operations [9]. - Zongshen Power plans to swap motorcycle engine-related assets with Longxin General's assets to resolve competition issues and promote clearer business development [9]. Industry Insights - Huatai Securities believes that the advancement of a unified national electricity market will benefit the new power system construction from multiple dimensions, focusing on the accelerated development of energy storage, continuous construction of the main grid, and structural growth in renewable energy demand [11].

Core Viewpoint - Longxin General Power Co., Ltd. plans to swap assets related to its general machinery business with Chongqing Zongshen Power Machinery Co., Ltd.'s motorcycle engine business to resolve competition issues and focus on specialized development [2][4]. Group 1: Transaction Overview - The transaction involves the exchange of assets, with Longxin General proposing to swap its general machinery assets, primarily the equity of Chongqing Xinlongxin Electromechanical Co., Ltd., for Zongshen Power's motorcycle engine assets, primarily the equity of Chongqing Zongshen Engine Manufacturing Co., Ltd. [2][4]. - The transaction will be based on an assessment report from a qualified evaluation agency as per the Securities Law of the People's Republic of China, and the price will be determined through negotiation [2][4][5]. - This transaction is classified as a related party transaction due to the control relationship between Longxin General and Zongshen Power, which is controlled by Zuo Zongshen, the actual controller of Longxin General [2][5]. Group 2: Asset Details - The assets to be acquired include those of Chongqing Zongshen Engine Manufacturing Co., Ltd., which has a registered capital of 743.71 million yuan and specializes in manufacturing motorcycle engines and related components [6]. - The assets to be divested are those of Chongqing Xinlongxin Electromechanical Co., Ltd., which has a registered capital of 10 million yuan and focuses on general machinery and power generation equipment [7]. Group 3: Impact on the Company - The transaction aims to eliminate competition between Longxin General and Zongshen Power, allowing the company to concentrate resources on motorcycle and engine businesses, enhancing core power technology development and global channel layout [8]. - Post-transaction, the company intends to optimize product structure and increase product value, aspiring to become a leading global enterprise in two-wheeled transportation [8].