Summary of Longxin General's Conference Call Company Overview - Longxin General focuses on core businesses in motorcycles and general machinery, divesting non-core operations such as drones and low-speed electric vehicles, and addressing competition issues with Zongshen through asset restructuring [2][6] Industry Insights - Domestic demand for small-displacement fuel motorcycles is declining, while high-end large-displacement models show potential for growth [2][7] - Internationally, demand for garden machinery is increasing, with the company actively expanding into European and other non-U.S. markets, expecting high export growth [2][8] Financial Performance - From 2019 to 2024, Longxin's overall revenue has shown a steady upward trend, with vehicle business revenue increasing from 4.6 billion to 10.3 billion, a compound annual growth rate (CAGR) of 17.6% [5] - The company's proprietary engine business also grew from 1.34 billion to 2.35 billion during the same period [5] - By mid-2025, overseas revenue accounted for 68% of total revenue, indicating strong international performance [5] Strategic Planning - Longxin will continue to focus on core businesses, including motorcycles and general machinery, while divesting non-core operations to enhance competitiveness [6] - The company plans to transfer some engine operations to Zongshen to resolve competition issues while retaining its core garden machinery product line [6] Market Dynamics - The domestic market is experiencing a shift towards high-end large-displacement motorcycles, with a stable market concentration among domestic brands like Chunfeng, Qianjiang, and Longxin, which collectively hold 53.1% market share [10] - Exports of large-displacement motorcycles have surged, with a 59% increase from January to October 2025, while small-displacement motorcycles grew by 21.1% [11] Product Development - Longxin's collaboration with BMW since 2005 has established a strong technical foundation for large-displacement motorcycles, leading to a diverse product matrix and steady revenue growth [12] - The company aims to fill gaps in retro and street models to enhance its product offerings [15] Brand Performance - The Wujin brand has shown remarkable performance in the European market, particularly in Spain, where it ranks fourth in market share [17] - Wujin's sales in Spain increased from 1,000-1,200 units in 2022 to an estimated 15,000 units in 2025, reflecting a growth rate of 60%-70% [17] Regional Expansion - In Latin America, Wujin is focusing on Argentina while expanding into Brazil, Mexico, and Colombia, which represent over 90% of the region's motorcycle market [19] - The introduction of new models like the DS800 has contributed to strong sales in Argentina [19] Future Profitability - Wujin's net profit is projected to reach 1.77 to 1.8 billion in 2026, down from approximately 2.4 billion in 2025, with a price-to-earnings ratio of about 13-14 times for 2026 [21] - The company’s valuation remains low, with growth potential in Europe and Latin America, indicating a favorable outlook for future development [21]

Group 1 - The motorcycle and other sectors experienced a slight increase of 0.1% on January 27, with Longxin General leading the gains [1] - The Shanghai Composite Index closed at 4139.9, up by 0.18%, while the Shenzhen Component Index closed at 14329.91, up by 0.09% [1] - Key stocks in the motorcycle sector showed varied performance, with Jiangti General rising by 3.23% and Xinlong Health increasing by 0.83% [1] Group 2 - The motorcycle and other sectors saw a net outflow of 20.82 million yuan from main funds, while retail investors contributed a net inflow of 3.25 million yuan [2] - Among individual stocks, Chuncheng Power had a significant net inflow of 28.71 million yuan from main funds, while Xinri Co. experienced a net outflow of 33.22 million yuan from retail investors [3] - The overall trading volume and turnover in the motorcycle sector reflected mixed investor sentiment, with some stocks like Chuncheng Power and Xinlong Health attracting positive attention [3]

Summary of Key Points from the 2026 Greater China Conference on the Auto Sector Industry Overview - The auto sector is experiencing a cooling in domestic demand while companies are setting ambitious growth targets, leading to a cautious outlook for the near term [1][2] - Key growth drivers identified include overseas expansion and intelligence transformation [1][3] Core Insights and Arguments Growth Projections - A bottom-up analysis indicates a projected 19% growth for the auto sector in 2026, contrasting with nearly zero growth in the market based on top-down forecasts [2] - Companies like LeapMotor are targeting significant growth, aiming to increase sales from 600,000 to 1 million units, primarily through new model launches [2] Overseas Expansion - Recent developments, such as tariff agreements between China and the EU, are expected to facilitate overseas growth for Chinese automakers [3] - Companies like Sinotruk and CFMoto are focusing on expanding their export markets, particularly in Europe and North America [3][36][65] Intelligence Transformation - Companies like Pony AI and WeRide are expanding their robotaxi fleets, with Pony targeting 3,000 units by 2026 [22][26] - The adoption of advanced technologies, such as LiDAR and AI, is expected to drive growth in the intelligence segment of the auto industry [3] Company-Specific Highlights Guangzhou Automobile (GAC) - GAC aims for robust volume growth through new model launches and exports, targeting 200,000-300,000 units overseas in 2026 [7][8] - The company plans to reduce costs by an additional 15% in 2026, building on a 10% reduction achieved in 2025 [9] Great Wall Motor - Management has set a sales target of approximately 1.8 million units for 2026, with a focus on new models and exports [10] - The company anticipates a challenging market environment, with a 10% month-over-month decline in orders noted early in 2026 [11] Nio - Nio expects to achieve non-GAAP breakeven in FY26, supported by a strong cash position of RMB 37 billion [13] - The company plans to launch three new models in 2026 to drive growth [14] Xpeng - Xpeng is focusing on cost optimization and technology leadership, with plans to launch new models in 2026 [16][17] - The company expects international sales to grow significantly, targeting over 20% of total revenue from overseas markets [18] Leapmotor - Leapmotor anticipates weak demand in the mass market but plans to launch new models to enhance competitiveness [19][20] - The company aims for overseas sales of 100,000-150,000 units in 2026, with a significant contribution expected from Europe [21] Pony AI - Pony AI is expanding its robotaxi fleet and expects to achieve breakeven in unit economics in Guangzhou [22][24] WeRide - WeRide plans to expand its robotaxi fleet to 2,000-3,000 units, with a focus on markets in the Middle East and Europe [26][27] Sinotruk - Sinotruk forecasts over 10% volume growth in 2026, primarily driven by truck exports [36] - The company is exploring new export markets, including Brazil and Europe, with plans for an assembly plant in Brazil [37] Loncin Motor - Loncin aims to increase its market share in Europe and is targeting growth in motorcycle exports [39][40] Yadea Group - Yadea expects a decline in the electric two-wheeler market but maintains a growth target of 10% for its sales volume in 2026 [43] Other Important Insights - The overall sentiment in the auto sector is cautious due to rising commodity prices, purchase taxes, and a retreating stimulus environment [4] - Companies focusing on intelligence and export themes are preferred for investment, including BYD, GWM, and Hesai [4] This summary encapsulates the key points discussed during the conference, highlighting the challenges and opportunities within the auto sector as companies navigate a changing market landscape.

Core Viewpoint - The report from Zhongtai Securities highlights Longxin General's deep involvement in the motorcycle and general machinery sectors, indicating a positive outlook for the company's growth and valuation potential [1] Group 1: Company Overview - Longxin General specializes in motorcycles and general machinery, with motorcycle products including road bikes, large-displacement motorcycles, all-terrain vehicles, and tricycles, while general machinery products encompass non-road engines, home generator sets, and garden machinery [1] - The company has undergone an asset restructuring, with the actual controller changing to Zuo Zongshen, which is expected to create more resource synergy in the motorcycle sector [1] Group 2: Business Strategy and Financial Performance - The company has shifted its strategy to focus on the core businesses of "motorcycles + general machinery," gradually divesting non-core operations and eliminating the profit drag from impairments, leading to a lighter financial burden [1] - In the first half of 2025, motorcycle complete vehicle revenue grew by 23.3% year-on-year, while general machinery revenue increased by 52.8% year-on-year, indicating strong growth in core business areas [1] Group 3: Market Potential and Valuation - The company is expected to accelerate its global business expansion, supported by the high growth of its main businesses [1] - The sales growth of the Wujie brand is rapid, and there is significant overseas growth potential, with all-terrain vehicles and general machinery businesses also showing good growth rates [1] - The company's valuation is considered low compared to peers, suggesting potential for upward adjustment, leading to a "buy" rating for the stock [1]

Investment Rating - The report assigns a "Buy" rating for Longxin General (603766.SH) for the first time [2]. Core Viewpoints - Longxin General has a strong focus on the motorcycle and general machinery sectors, with recent asset restructuring and the elimination of impairment losses, allowing the company to concentrate on its core business and drive growth [5][6]. - The company is expected to benefit from the increasing demand for high-displacement motorcycles domestically and the expansion of its global presence, particularly in Europe and Latin America [7][8]. - The financial outlook is positive, with projected revenue growth and improving profitability driven by the successful performance of its VOGE brand and other product lines [9]. Company Overview - Longxin General has been deeply engaged in the motorcycle and general machinery sectors since its establishment in 1993, with a focus on expanding its core business [13]. - The company has undergone several strategic shifts, with a recent emphasis on "motorcycles + general machinery" as its main strategy, gradually divesting non-core businesses [24][26]. - The product structure includes motorcycles (both fuel and electric), all-terrain vehicles, and general machinery, with a strong emphasis on high-displacement motorcycles under the VOGE brand [16][18]. Financial Analysis - The company has shown significant revenue growth, with total revenue projected to increase from 13,066 million yuan in 2023 to 27,632 million yuan by 2027, reflecting a compound annual growth rate (CAGR) of 14% [2]. - The net profit attributable to shareholders is expected to rise from 583 million yuan in 2023 to 2,787 million yuan in 2027, with a notable increase in profitability driven by the core motorcycle business [2]. - The company's overseas revenue has increased significantly, accounting for nearly 70% of total revenue, driven by the success of its VOGE and general machinery products in international markets [27]. Motorcycle Industry Insights - The domestic market for motorcycles is facing challenges, but the high-displacement segment is experiencing growth, with the share of motorcycles over 250cc increasing from 6.6% to 10.1% from 2023 to 2025 [43][45]. - The competitive landscape in the high-displacement motorcycle market is becoming more concentrated, with leading companies like Longxin General capturing significant market share [45]. - The export market, particularly in Europe and Latin America, is expected to be a major source of growth, with increasing demand for high-displacement motorcycles [8][43].

Investment Rating - The report assigns a "Buy" rating for Longxin General (隆鑫通用) for the first time [2]. Core Insights - Longxin General has a strong focus on motorcycles and general machinery, with recent asset restructuring and the elimination of impairment drag, positioning the company for growth in its core business [5][6]. - The company is expected to benefit from the increasing demand for high-displacement motorcycles domestically and is expanding its global footprint, particularly in Europe and Latin America [7][8]. - The financial forecast indicates significant growth in revenue and net profit over the next few years, with a projected net profit of 2.79 billion yuan by 2027, reflecting a strong upward trend in valuation [9]. Company Overview - Longxin General has been deeply involved in the motorcycle and general machinery sectors since its establishment in 1993, with a focus on expanding its core business [13]. - The company has undergone several strategic shifts, now concentrating on "motorcycles + general machinery" while divesting non-core businesses [24]. - The recent asset restructuring has strengthened resource synergies with Zongshen, enhancing operational efficiency [22]. Financial Analysis - The company has shown robust revenue growth, with a projected increase from 13.066 billion yuan in 2023 to 27.632 billion yuan by 2027, representing a compound annual growth rate (CAGR) of 14% [2]. - The net profit is expected to rise from 583 million yuan in 2023 to 2.787 billion yuan in 2027, with a significant year-on-year growth rate of 92% in 2024 [2][9]. - The motorcycle segment is the primary revenue driver, accounting for approximately 60% of total revenue, with a notable increase in the share of high-value products [37]. Motorcycle Industry Insights - The domestic market for motorcycles is experiencing a shift, with a decline in total sales but an increase in the high-displacement segment, which is expected to grow due to changing consumer preferences [43]. - The company is well-positioned in the high-displacement motorcycle market, with a significant increase in sales volume and market share [45]. - Export markets, particularly in Europe and Latin America, are anticipated to contribute significantly to revenue growth, with the company expanding its presence in these regions [8][9].

Group 1 - The motorcycle and other sectors experienced an increase of 0.91% on January 21, with Yong'an Xing leading the gains [1] - The Shanghai Composite Index closed at 4116.94, up 0.08%, while the Shenzhen Component Index closed at 14255.12, up 0.7% [1] - Yong'an Xing's stock price rose by 3.52% to 19.42, with a trading volume of 73,500 shares and a transaction value of 141 million yuan [1] Group 2 - The motorcycle and other sectors saw a net outflow of 5.7956 million yuan from institutional investors, while retail investors had a net inflow of 9.97772 million yuan [2] - The stock of Yong'an Xing had a net outflow of 21.4762 million yuan from institutional investors, with a 15.22% share of the net flow [3] - Spring Power's stock had a net inflow of 7.5623 million yuan from institutional investors, representing 1.79% of the net flow [3]

Core Viewpoint - Longxin General's Q4 performance is expected to be under short-term pressure, but the growth of its own brand is strong [1] Group 1: Financial Performance - The company anticipates achieving a net profit attributable to shareholders of 165 million to 180 million yuan in 2025, representing a year-on-year growth of 47.15% to 60.53% [1] - Q4 performance is impacted by one-time losses from asset disposals and impairment provisions [1] - The main business shows steady growth, and profitability is steadily improving [1] Group 2: Business Strategy - The company emphasizes the development of its own brand and is building a differentiated product portfolio [1] - The overall performance growth is driven by the stable growth of the motorcycle and general machinery main businesses, along with continuous optimization of the Wujie product series [1] - The company is rated as a "buy" [1]

Core Viewpoint - Longxin General's Q4 performance is under short-term pressure, but the growth of its own brand is strong [1] Financial Performance - The company expects to achieve a net profit attributable to shareholders of 165 million to 180 million yuan in 2025, representing a year-on-year growth of 47.15% to 60.53% [1] - Q4 performance is impacted by one-time losses from asset disposals and impairment provisions [1] - The main business shows steady growth, and profitability is steadily improving [1] Business Strategy - The company emphasizes the development of its own brand and constructs a differentiated product portfolio [1] - The overall performance growth is driven by the stable growth of the motorcycle and general machinery main businesses, as well as the continuous optimization of the Wujie series product structure [1] Investment Rating - The company is given a "buy" rating [1]

Investment Highlights - The passenger car sector is expected to see a recovery in Q1 2026 due to the implementation of subsidy policies, with a focus on high-end electric vehicles that are less sensitive to policy changes, such as Jianghuai Automobile, Geely, Great Wall Motors, BAIC Blue Valley, Seres, and Li Auto [2][7] - For exports, priority should be given to leading companies with established overseas systems and proven execution capabilities, including BYD, Great Wall Motors, Chery, Leap Motor, Xpeng, SAIC Motor, and Changan Automobile [2][7] Heavy Truck Sector - In 2025, wholesale heavy truck sales reached 1.144 million units, up 26.8% year-on-year, with domestic sales of 799,000 units, up 32.8%, and exports of 341,000 units, up 17.2% [3][37] - The expected domestic sales for heavy trucks in 2026 is optimistic, projected at 800,000 to 850,000 units, a 3% increase year-on-year [3][37] - Recommended leading heavy truck companies include China National Heavy Duty Truck Group, Weichai Power, Foton Motor, FAW Jiefang, and CIMC Vehicles [3][37] Bus Sector - The implementation of the vehicle replacement policy in 2026 is slightly better than expected, with bus sales in 2025 projected at 38,000 units, a 25% increase year-on-year [3][37] - For 2026, bus sales are expected to grow to 40,000 units, a 5% increase year-on-year, supported by the number of buses over eight years old that need replacement [3][37] - Recommended leading bus companies include Yutong Bus, King Long Motor, and Zhongtong Bus [3][37] Motorcycle Sector - The motorcycle industry is projected to achieve total sales of 19.38 million units in 2026, a 14% increase year-on-year, with large-displacement motorcycles expected to reach 1.26 million units, a 31% increase [4][34] - Domestic sales of large-displacement motorcycles are expected to grow slightly to 430,000 units in 2026, a 5% increase year-on-year, while exports are projected to reach 830,000 units, a 50% increase [4][34] - Recommended leading motorcycle companies include Chunfeng Power and Longxin General [4][34]