Investment Rating - The report maintains a BUY rating for Meidong Auto, with a revised target price of HK4.00, based on a 10x FY25E EPS valuation [2][5]. Core Views - Despite facing strong industry headwinds, Meidong is expected to remain profitable in 1H24, with a projected net profit of RMB43 million, supported by subsidies from Porsche and Lexus [2]. - The outlook for FY25 is anticipated to improve due to the removal of the convertible bond burden and a new NEV model cycle for BMW, leading to a projected net profit of RMB360 million [2]. - The report highlights a decline in new car sales volume by 8% YoY to 29,200 units in 1H24, with a significant drop in average selling price by 13% YoY [2]. Financial Summary - Revenue for FY24 is projected at RMB24,141 million, a decrease of 15% YoY, with gross profit expected to drop by 11% YoY to RMB1,877 million [11]. - The new car gross margin is expected to fall to -3.7% in 1H24, marking the lowest in history, while after-sales service revenue is projected to rise by 12% YoY [2][11]. - The report indicates a significant decline in net profit from RMB521 million in FY22 to RMB140 million in FY23, with a forecasted recovery to RMB360 million in FY25 [11][12].
美东汽车：We expect 1H24 to be still profitable