Core Viewpoint - EVE Energy plans to issue H-shares and list on the Hong Kong Stock Exchange to enhance its capital strength, competitiveness, and international brand image, aligning with its global strategy [1] Group 1: IPO and Market Position - EVE Energy aims to issue no more than 10% of its total share capital in H-shares, with an option for an additional 15% in oversubscription [1] - If successful, EVE Energy will become the second lithium battery company to achieve A+H dual listing, following CATL's recent listing that raised HKD 40.76 billion [1] Group 2: Global Strategy and Production Capacity - EVE Energy is advancing its "global manufacturing, global delivery, global cooperation" strategy, focusing on local operations and customer responsiveness [1] - The company is making significant progress in establishing manufacturing bases in Malaysia, Hungary, and the United States [1][2] - The battery project in Hungary is expected to enhance delivery capabilities in Europe, with production set to commence in 2026 [2] - The Malaysian factory aims to produce 680 million small cylindrical batteries annually, with mass production expected in early 2025 [2] Group 3: Sales Performance and Market Share - In 2024, EVE Energy's energy storage battery shipments reached 50.45 GWh, a year-on-year increase of 91.9%, while power battery shipments were 30.29 GWh, up 7.87% [3] - EVE Energy ranked second globally in energy storage cell shipments, following CATL, and held a 12.15% market share in China's commercial vehicle battery sector [3] Group 4: Stock Market Performance - As of June 11, EVE Energy's total market capitalization was CNY 89.83 billion, with shares closing at CNY 43.91, a decrease of 2.5% from the previous close [4]

Core Viewpoint - The implementation of the revised "Regulations on Payment of Funds for Small and Medium-sized Enterprises" by the State Council aims to shorten the payment period for suppliers to within 60 days, which has been positively received by multiple automotive companies, potentially improving supply chain efficiency and collaboration [2][6][7]. Group 1: Automotive Industry Response - Over ten automotive companies, including GAC Group, FAW Group, and BYD, have committed to reducing supplier payment terms to within 60 days, marking the beginning of a significant shift in the automotive industry's payment practices [3][4]. - The average payment cycle for domestic automotive companies has deteriorated from approximately 45 days a decade ago to much longer periods due to intensified competition and market pressures [6]. - The collective response from major automotive manufacturers is seen as a resistance to "involution" in the industry, with leaders publicly criticizing the negative impacts of price wars and extended payment terms [6][7]. Group 2: Impact on Suppliers - Shortening payment terms is expected to benefit suppliers by allowing quicker access to funds, thereby reducing operational risks and enabling faster production scale-up and product iteration [8]. - However, this shift may pose challenges for automotive companies with poor cash flow management, potentially leading to the elimination of weaker players in the market [8]. Group 3: Battery Industry Implications - The commitment to a 60-day payment term is particularly significant for the battery supply chain, where battery costs account for 30% to 40% of the total vehicle cost [12]. - The current lithium battery industry is facing challenges such as increased accounts receivable and extended customer payment cycles, impacting even leading companies like CATL [13][14]. - The new payment terms could enhance cash flow for battery suppliers, especially smaller firms, and foster deeper partnerships between automakers and battery manufacturers, promoting innovation and new business models [16].

Core Viewpoint - The announcement of EVE Energy's plan to list H-shares in Hong Kong signifies a strategic move to enhance its capital strength and global competitiveness, following the recent listing of CATL, indicating a trend of Chinese lithium battery companies expanding their international presence [2][5][9]. Group 1: Company Strategy - EVE Energy aims to improve its capital strength and comprehensive competitiveness through the Hong Kong listing, while also enhancing its international brand image and supporting its global strategy [5][6]. - The company is currently in discussions with intermediaries regarding the listing process, with a focus on timing and market conditions to maximize shareholder interests [3][4]. Group 2: Market Context - The successful listing of CATL in Hong Kong reflects a broader trend of Chinese manufacturing firms seeking to connect with international capital markets, driven by supportive policies and market conditions [4][9]. - Other lithium battery companies are also pursuing listings in Hong Kong to leverage more flexible financing channels and optimize their capital structures, indicating a collective industry shift towards global expansion [8][9]. Group 3: Performance Metrics - EVE Energy reported a revenue of 12.796 billion yuan in the first quarter of this year, representing a year-on-year increase of 37.34%, with overseas business contributing significantly to profits [6]. - The company has ambitious plans for overseas production capacity, including a battery production base in Hungary and a facility in Malaysia, which are expected to enhance its global supply chain [6].

Core Viewpoint - EVE Energy plans to issue H-shares and list on the Hong Kong Stock Exchange to enhance capital strength, competitiveness, and international brand image, supporting its global strategy [1] Group 1: Financing and Capital Structure - EVE Energy has conducted four rounds of private placements since its listing, raising a total of 14.6 billion yuan over 16 years, while cash dividends amounted to 3.144 billion yuan [1] - The company successfully raised 5 billion yuan through convertible bonds to fund significant battery projects, with a total funding requirement exceeding 13.5 billion yuan by the end of 2025 [2][3] - The asset-liability ratio has been around 60% since 2022, reaching 61.98% in Q1 of this year [3] Group 2: Business Performance - In the previous year, EVE Energy reported revenue of 48.615 billion yuan, a slight decrease of 0.35%, while net profit increased by 0.63% to 4.076 billion yuan [4] - The energy storage battery segment showed strong performance, holding the second-largest global market share, while the power battery segment lagged [4] - By 2024, approximately 24% of the company's revenue is expected to come from overseas markets [4] Group 3: Global Expansion Strategy - EVE Energy is implementing a "global manufacturing, global delivery, global cooperation" strategy, with investments nearing 17.4 billion yuan in overseas factories in Hungary, Malaysia, and the United States [4] - The Hungarian facility is progressing well, with ground engineering completed and production expected to start in 2026, enhancing supply capabilities in Europe [4] - The Malaysian factory aims to serve various markets and is set to begin production of cylindrical lithium batteries by December 2024 [4] Group 4: Market Context - The Hong Kong IPO market is currently active, with several A-share companies opting for secondary listings, including CATL, which raised 40.76 billion HKD, marking a record high for Hong Kong in over four years [5][6]

Company Overview - EVE Energy Co., Ltd. has experienced a cumulative decline of -6.09% over four consecutive trading days as of June 10 [1] - Founded in 2001 and listed on the Shenzhen Stock Exchange in 2009, EVE has developed into a globally competitive lithium battery platform company [1] - The company possesses core technologies and comprehensive solutions for consumer batteries, power batteries, and energy storage batteries, with applications in the Internet of Things and energy internet sectors [1] Financial Performance - The financial report indicates that Huatai-PineBridge Fund's Huatai-PineBridge CSI 300 ETF is among the top ten shareholders of EVE Energy, having reduced its holdings in the first quarter of this year [1] - Year-to-date return for the fund is -1.24%, ranking 2392 out of 3428 in its category [1][2] Fund Management - The fund manager for Huatai-PineBridge CSI 300 ETF is Liu Jun, who has extensive experience in fund management since joining Huatai-PineBridge in 2004 [3][4] - Liu Jun holds a master's degree in financial management from Fudan University and has managed various funds, including the Huatai-PineBridge CSI 300 ETF since May 2012 [3][4]

Investment Rating - The report assigns a "Leading" investment rating to the automotive industry, indicating an expectation of attractive performance relative to the benchmark index over the next 12 months [5]. Core Insights - In May, the retail sales of passenger vehicles increased by 13.3% year-on-year, driven by consumer promotion policies, increased subsidies from manufacturers, and supportive financial policies. The total retail sales reached 1.932 million units in May, with a year-to-date growth of 9.1% [5]. - The penetration rate of new energy vehicles (NEVs) rose to 52.9% in May, with NEV retail sales reaching 1.021 million units, reflecting a year-on-year increase of 28.2% [5]. - The export structure is improving, with the EU and Southeast Asia emerging as new high-growth markets. In May, total passenger vehicle exports reached 448,000 units, with NEV exports performing better than traditional fuel vehicles [5]. Summary by Sections Valuation Overview - BYD Co., Ltd. (1211 HK) rated "Buy" with a target price of 503.25, current price 396.60, FY25E EPS of 23.284, and a PE ratio of 15.6 [3]. - Great Wall Motors (2333 HK) rated "Buy" with a target price of 17.36, current price 12.58, FY25E EPS of 1.692, and a PE ratio of 6.8 [3]. - Geely Automobile (175 HK) rated "Buy" with a target price of 22.50, current price 17.56, FY25E EPS of 1.182, and a PE ratio of 13.6 [3]. - Xpeng Motors (9868 HK) rated "Buy" with a target price of 134.69, current price 78.55, FY25E EPS of -0.324, and NA for PE ratio [3]. - NIO Inc. (9866 HK) rated "Buy" with a target price of 48.96, current price 27.90, FY25E EPS of -7.459, and NA for PE ratio [3]. Market Trends - The report notes that the automotive market is expected to maintain stable growth in June, following a strong performance in May. The report highlights the potential for a price war among passenger vehicles, particularly after BYD initiated a new round of promotions [5]. - The report emphasizes the strong performance of domestic brands, which accounted for 65.2% of the retail market share in May, with a year-on-year increase of 8 percentage points [5]. Investment Recommendations - The report suggests focusing on BYD for its intelligent driving and export potential, Xpeng Motors for the launch of new models, and Geely Automobile for internal resource integration following the privatization of its Zeekr brand [5].

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies within it Core Insights - NEV-PV battery installations increased by 11.2% week-over-week to 11.9 GWh, with a month-to-date increase of 14.5% and a year-to-date increase of 37.3% year-over-year [1] - CATL outperformed in market share, gaining 0.5 percentage points month-to-date, while BYD lost 4 percentage points in the same period [1][3] - Lithium-carbonate prices decreased by 2.7% week-over-week to Rmb 60,400 per ton, reflecting a 9.4% decline month-over-month [1] Summary by Sections Battery Installations - NEV-PV battery installations for the week of May 26 to June 1 reached 11.9 GWh, marking a 29.9% increase month-over-month and a 37.3% increase year-over-year [1][3] - Year-to-date installations for BEV and PHEV increased by 47.3% and 30.6% respectively [1] Market Share Dynamics - CATL's market share rose to 49.1%, while BYD's share fell to 33.6% [3] - CATL's installation growth was 15.8% year-to-date, compared to BYD's 2.5% [3] Cost Trends - LFP cell costs decreased to Rmb 245.2 per kWh, down 1.3% month-over-month and 9.3% year-over-year [2][8] - NCM cell costs fell to Rmb 351.9 per kWh, reflecting a 0.8% month-over-month and 10% year-over-year decline [2][8] - The gross profit margin for LFP cells improved to 15.9%, while NCM cells reached 17.2% [2][8]

Core Viewpoint - EVE Energy plans to issue H-shares and list on the Hong Kong Stock Exchange, considering the interests of existing shareholders and market conditions [1] Group 1: H-share Issuance - EVE Energy intends to issue H-shares and list on the Hong Kong Stock Exchange, with a decision to be made within 24 months after the shareholders' meeting approval [1] - The company has passed relevant resolutions regarding the H-share issuance at its board and supervisory meetings [1] Group 2: Previous Fundraising Activities - In 2020, EVE Energy raised approximately RMB 2.48 billion by issuing 48,440,224 A-shares at RMB 51.61 per share, after deducting issuance costs [2] - In 2022, the company raised around RMB 8.97 billion by issuing 142,970,611 A-shares at RMB 62.95 per share, net of issuance costs [3] - In 2019, EVE Energy raised about RMB 2.47 billion through a non-public offering of 114,995,400 A-shares at RMB 21.74 per share, after deducting costs [4] Group 3: Financial Performance - In 2024, EVE Energy reported revenue of RMB 48.61 billion, a slight decrease of 0.35% year-on-year [6][7] - The net profit attributable to shareholders was RMB 4.08 billion, reflecting a 0.63% increase compared to the previous year [6][7] - The net profit excluding non-recurring items was RMB 3.16 billion, showing a 14.76% increase year-on-year [6][7] - The net cash flow from operating activities decreased by 48.90% to RMB 4.43 billion [6][7] - Total assets at the end of 2024 reached RMB 100.89 billion, an increase of 6.93% from the previous year [7] - The net assets attributable to shareholders increased by 8.20% to RMB 37.58 billion [7]

Market Overview - The Hang Seng Index has risen above 24,000 points, closing at 24,181 points with a gain of 388 points on June 9, 2025, driven by optimistic market sentiment following U.S.-China trade talks [5] - The market anticipates a new round of financial policies from mainland China, including potential interest rate cuts and structural monetary policy tools, to stabilize the market [1][2] - The U.S. and China have agreed to lower tariffs temporarily, with U.S. tariffs on Chinese imports reduced from 145% to 30%, and Chinese tariffs on U.S. goods reduced from 125% to 10% for 90 days [1] Economic Indicators - China's Consumer Price Index (CPI) fell by 0.1% in May, better than the expected decline of 0.2%, while the Producer Price Index (PPI) dropped by 3.3%, exceeding expectations of a 3.2% decline [7] - In the first five months of 2025, China's exports increased by 6% year-on-year, while imports decreased by 4.9%, resulting in a trade surplus of approximately 471.89 billion USD [7][8] - The retail sales of passenger vehicles in China reached a record high of 1.932 million units in May, marking a year-on-year increase of 13.3% [8] Corporate Developments - JD.com has initiated a hotel and travel business, reportedly offering three times the salary to attract talent from competitors [9] - BYD is integrating its various business scenarios with Alibaba Cloud's AI capabilities, enhancing its smart cockpit and marketing services [9] - A-share lithium battery supplier, Yiwei Lithium Energy, plans to list H-shares in Hong Kong to strengthen its capital base and international competitiveness [9] Sector Focus - The "Two New" policy in mainland China is expected to expand to include durable goods such as electrical appliances and bathroom fixtures, aimed at boosting economic growth [8] - The pharmaceutical sector is seeing renewed interest due to ongoing COVID-19 developments and collaborations between Chinese and U.S. pharmaceutical companies [6] - AI concept stocks are gaining traction with advancements in large model upgrades, indicating a growing focus on technology-driven investments [6]

Domestic News - The first meeting of the China-US economic and trade consultation mechanism was held in London, UK, on June 9, with Chinese Vice Premier He Lifeng attending [2] - The Ministry of Industry and Information Technology announced increased inspections on vehicles with significant safety risks and high public concern as part of the 2025 annual consistency supervision checks [3] - Beijing's economic and information bureau released a plan to encourage the development of high-end new vehicle models with a focus on technology and fashion, aiming to expand into overseas markets [4] - In the first five months, China's automobile exports reached 351.37 billion yuan, a year-on-year increase of 6.6%, with electric vehicle exports growing by 19% [5] - Hebei Province is promoting private sector participation in the construction and operation of charging infrastructure, aiming to attract diverse investment [6] International News - Waymo's autonomous vehicles were damaged during a protest in Los Angeles, with five vehicles destroyed, totaling approximately $600,000 in damages [7] - Tata Motors expects electric vehicle penetration to reach 20% by 2027 and over 30% by the fiscal year 2030, with plans to invest 33-35 billion Indian Rupees in solar business from 2026 to 2030 [8] - General Motors appointed Mike Trevorrow as the new Senior Vice President of Global Manufacturing following the departure of JP Clausen [9] Corporate News - Geely partnered with Indonesian electric vehicle charging operator Voltron to establish charging facilities at all of Geely's dealerships in Indonesia, with the first six stores set to complete infrastructure deployment [10] - Honda China's May automobile sales were 55,108 units, a year-on-year decline of 16.8%, with cumulative sales from January to May down 26% compared to the previous year [11] - EVE Energy announced plans to issue H-shares and list on the Hong Kong Stock Exchange to enhance capital strength and international brand image [12] - Zeekr Energy launched a charging map in Hong Kong, covering over 1,700 core stations and more than 2,300 charging piles, providing over 1,500 daily charging supports [13] - TSMC's construction plans for new factories in Japan and Germany may be adjusted due to supply chain issues and lower-than-expected market conditions [14] - Huawei's subsidiary announced a patent for a retractable steering wheel, aimed at improving driver comfort and saving space in vehicles [15] - Nezha Automobile's 1 billion yuan worth of shares has been frozen, with the freeze lasting from June 3, 2025, to June 2, 2028 [16]