Investment Rating - Investment recommendation: Outperform the market (maintained) [7] Core Viewpoints - The report provides an in-depth analysis of the domestic ultra-luxury automobile market, highlighting the resilience of imported brands and the potential breakthrough of domestic brands. The market share of domestic brands is expected to grow from 0.8% in 2023 to 4.8% in 2024 [4][9][25]. - The ultra-luxury SUV market is highly competitive, with Porsche Cayenne leading, while domestic brand Yangwang U8 is starting to gain recognition. Imported brands dominate the ultra-luxury sedan market, but new high-end models from domestic brands like Yangwang U9 are entering the market [4][10][40]. - The ultra-luxury MPV market is led by Toyota Alphard, with domestic brand Zeekr 009 gradually making inroads [4][10]. Summary by Sections 1. Resilience of Imported Ultra-Luxury Cars and Structural Breakthrough of Domestic Brands - The overall sales of ultra-luxury cars remain resilient, with annual sales maintaining above 200,000 units. In 2024, the expected sales volume is approximately 200,000 units, a decrease of 15.2% year-on-year [9][21]. - Imported brands continue to dominate the market, but domestic brands are gradually increasing their market share, projected to rise from 0.8% in 2023 to 4.8% in 2024 [25][28]. 2. Intense Competition in Various Sub-Markets and Differentiation of Domestic Brands - The ultra-luxury SUV market is stable, with sales expected to reach 112,000 units in 2024, down 13.2% year-on-year. The top five models include Porsche Cayenne, Land Rover Range Rover, and Yangwang U8, with respective sales of 21,000, 19,000, and 7,000 units [30][32]. - The ultra-luxury sedan market is primarily dominated by imported brands, with 2024 sales expected to drop to 66,000 units, a 22.4% decrease year-on-year. However, domestic brands like Yangwang U9 and NIO ET9 are beginning to penetrate this market [40][42]. - The ultra-luxury MPV market is led by Toyota Alphard, with Zeekr 009 starting to gain traction, achieving over 2,000 units in sales in 2024 [51]. 3. Investment Recommendations: Focus on "New Luxury" Domestic Brands with Leading Smart Electric Technology - Domestic brands are expected to leverage advancements in electric and smart technologies to penetrate the ultra-luxury market. In 2024, China's new energy vehicle sales are projected to reach 12.87 million units, a 35.5% increase year-on-year [54][55]. - The report recommends focusing on brands like Yangwang from BYD and the joint venture brand Zunji from Jianghuai Automobile and Huawei, which are positioned to lead the high-end market [54][55].

Core Insights - Changan Automobile has officially become a state-owned enterprise (SOE) following the termination of the restructuring plan with Dongfeng Group, positioning its high-end brand Avita to lead the luxury vehicle segment as a new flagship for the SOE [2][3] - Avita aims to launch a flagship model priced at over 1 million yuan by 2026, with a total of 17 new products planned by 2030, covering various vehicle types including sedans, SUVs, MPVs, and sports cars [2][3] Group 1: Brand Positioning and Strategy - Avita's new slogan emphasizes its role as a "new flagship" and "new luxury" brand under the SOE framework, indicating a commitment to high-end vehicle production [2] - The brand's strategy includes a focus on original design and a "technology alliance" with partners like Huawei and CATL, enhancing its technological capabilities [3] Group 2: Product Development and Sales Goals - Avita has successfully launched four models in three years and aims for a total global sales target of 800,000 units by 2030, with a specific target of 220,000 units by 2025 [3] - As of May, Avita's sales reached 12,767 units, marking three consecutive months of sales exceeding 10,000 units, with a cumulative total of 50,000 units for the year [3] Group 3: Market Expansion and Distribution - Avita plans to expand its distribution network, currently exceeding 700 touchpoints across 212 cities, with an 82% coverage rate in prefecture-level cities and 76% in core business districts [3] - The brand is also targeting international markets, with plans to enter over 50 countries and regions, establishing more than 160 distribution points [3]

Core Viewpoint - The traditional luxury car brands represented by BBA (BMW, Benz, Audi) are facing significant challenges in the Chinese market, with local luxury brands rapidly gaining market share and altering consumer perceptions of luxury vehicles [1][3][20]. Group 1: Market Dynamics - The global sales of BBA brands are declining, with BMW and Benz experiencing the largest drops in China, with sales down 13% and 7% respectively, while Audi's sales fell by approximately 11% [1][3]. - The Chinese luxury car market is evolving, with the segment priced between 200,000 to 300,000 yuan experiencing a 92% growth from 1.982 million units in 2018 to 3.822 million units in 2024 [3][18]. - In 2024, domestic high-end brand passenger car sales are projected to reach 4.738 million units, reflecting a 2.3% year-on-year increase [3][18]. Group 2: Audi's Strategic Shift - Audi is launching a new AUDI brand in China, aiming to attract younger consumers and differentiate itself in the luxury market [2][3]. - The AUDI E5 Sportback, which debuted shortly before the Shanghai Auto Show, represents Audi's commitment to electric and intelligent vehicle technology, with a focus on local partnerships for battery and smart driving solutions [2][4][7]. - Audi's collaboration with local suppliers like CATL for battery systems and Momenta for intelligent driving technology highlights a strategic pivot towards leveraging Chinese innovation [2][9][11]. Group 3: Competitive Landscape - Traditional luxury brands are increasingly adopting Chinese smart automotive solutions, with BBA brands collaborating with local companies to enhance their technological offerings [9][10][21]. - The shift towards smart and electric vehicles is not just limited to BBA; other foreign brands are also forming partnerships with Chinese suppliers to adapt to the rapidly changing market [10][13]. - The competitive landscape is intensifying, with the Chinese market leading in the adoption of new energy vehicles, achieving over 50% penetration, while other regions lag behind [18][20]. Group 4: Future Outlook - The success of BBA brands in China is seen as critical for their global strategy, with significant investments planned for new electric models and local R&D initiatives [17][20]. - The rapid development of smart and electric vehicles in China is expected to influence global automotive trends, with Chinese solutions beginning to penetrate international markets [21].

Core Viewpoint - The company, Seres Group, is rapidly advancing its IPO process in Hong Kong, having submitted its application within a month of announcing its intentions, driven by significant growth in its business and market performance [1][3]. Financial Performance - Seres achieved a record financial year in 2024, turning a profit with a revenue increase of 305% from 2023, reaching 145.1 billion yuan [4][5]. - The company reported a total delivery of 387,100 units for its Wanjie brand in 2024, a year-on-year increase of 268%, with the Wanjie M7 and M9 becoming top-selling models in their respective price segments [3][5]. Market Strategy - The company aims to expand its global presence, with plans to use 20% of the IPO proceeds for marketing, overseas sales, and charging network services [6]. - Seres is focusing on enhancing its product offerings and technological capabilities, with a significant increase in R&D investment, planning to allocate 70% of the IPO proceeds to R&D [7]. Recent Challenges and Opportunities - Despite a 45% decline in total sales in Q1 2025, the company reported a 240% increase in net profit, attributed to product structure optimization and increased sales margins [8]. - The newly launched Wanjie M8 has received strong market interest, with over 60,000 pre-orders within days of its release, indicating potential for recovery in sales [8]. Market Confidence - The company's market capitalization remains above 200 billion yuan, reflecting investor confidence, and it has been included in major A-share indices, further solidifying its market influence [9].