Core Viewpoint - The suspension of the "old-for-new" subsidy for cars in various regions is primarily due to a mismatch between the demand for subsidies and the phased funding mechanism, despite strong demand for vehicle replacements. The marginal effectiveness of the policy is diminishing due to factors such as price wars in the automotive market [1][3][4]. Summary by Sections Suspension of Subsidies - From mid-May to June 15, multiple regions across the country announced the suspension of applications for the "old-for-new" subsidy due to exhausted funds [2]. - Regions such as Zhengzhou, Luoyang, and others have reported that the suspension is due to the "subsidy funds being used up" [2][8]. Market Reaction - The suspension of the "old-for-new" subsidy has caused unrest in the automotive market, with dealers using the news to encourage consumers to make purchases quickly [3]. - The actual impact of the subsidy policy is more favorable for low-end models, as consumer purchasing power declines and price wars intensify, leading to a decrease in the policy's stimulating effect [4]. Sales Data and Trends - From January to May, automotive sales increased by 3.5 percentage points year-on-year, significantly aided by the "old-for-new" policy. However, the suspension of subsidies and ongoing price wars have led to increased consumer hesitation [5][17]. - The overall retail sales of automobiles remained stagnant, with a total automotive consumption value of 1,884.7 billion yuan, showing zero growth year-on-year [17]. Funding Mechanism - The "old-for-new" subsidy is part of a larger funding pool of 3 trillion yuan for various consumer goods, with the distribution of funds being a challenge due to the mismatch between local demand and the phased release of funds [11][12]. - As of June 18, the central government has allocated 1,620 billion yuan of the planned 3 trillion yuan, with the remaining funds to be distributed in the latter half of the year [6][11]. Future Implications - The marginal effectiveness of the "old-for-new" policy is expected to continue diminishing, with consumers adopting a wait-and-see attitude due to aggressive price cuts in the market [16]. - The automotive market is facing pressure for growth, with expectations for more robust policies to stimulate demand, such as tax reductions and incentives for purchasing vehicles [16][18].

Market Overview - The A-share market experienced a brief rise before retreating, with major indices showing more declines than gains. As of the midday close, the Shanghai Composite Index fell by 0.3%, the Shenzhen Component Index dropped by 0.71%, and the ChiNext Index decreased by 1.28% [1][2]. Trading Data - The total trading volume across the market reached 661 billion CNY, with 2,527 stocks rising, 257 remaining flat, and 2,624 declining [3]. - The Shanghai Composite Index closed at 3,338.42, down by 9.95 points or 0.30% [2]. Sector Performance - In terms of sector performance, media, computer, and defense industries showed localized gains, while sectors such as pharmaceuticals and automotive experienced notable declines. Antibiotics and innovative drugs led the downturn in the pharmaceutical sector [4][14]. Automotive Sector - The automotive sector faced a collective pullback, with significant declines in stocks such as BYD, which fell over 5% to a minimum price of 382.8 CNY per share, resulting in a market capitalization drop to 1.17 trillion CNY [7][8][12]. - Other automotive stocks, including Geely and Li Auto, also saw substantial declines, with Geely dropping by 7.29% [6][13]. Pharmaceutical Sector - The pharmaceutical and biotechnology sector saw a downturn, with companies like Hai Chen Pharmaceutical and Ke Yuan Pharmaceutical experiencing declines exceeding 10% [14][15]. - San Sheng Guo Jian, which had previously surged over 100%, also faced a significant drop of over 8% [18]. Natural Gas Sector - Shaanxi Natural Gas stock was reported to be trading near its limit down, with a price of 8.21 CNY per share, reflecting a decline of 9.98%. The company anticipates a revenue reduction of approximately 262 million CNY and a net profit decrease of about 223 million CNY due to new pricing regulations effective from June 2025 [18][19].

Core Viewpoint - BYD has launched a limited-time promotional campaign offering significant discounts on its smart driving models, reflecting its strategy to boost sales and compete in the automotive market [1][6]. Group 1: Promotional Activities - On May 23, BYD introduced a limited-time "one-price" or subsidy promotion for 22 smart driving models, with discounts up to 53,000 yuan [1]. - The Ocean series features 10 models starting at a one-price of 55,800 yuan, with the largest price drop seen in the Seal 07 DM-i model, reduced by 53,000 yuan to 102,800 yuan [1]. - The Dynasty series has 12 models with a starting price of 63,800 yuan, where the maximum discount is 32,000 yuan, bringing the starting price to 217,800 yuan [1]. - Throughout this year, BYD has frequently implemented similar promotional activities, extending discounts from non-smart driving models to smart driving models [1]. Group 2: Market Strategy and Sales Goals - BYD's high-level smart driving system, "Tianshen Zhi Yan," was launched on February 10, enabling a price drop for non-smart models to around 70,000 yuan [2]. - The company has increased the replacement subsidy for certain smart driving models starting May 1, with comprehensive subsidies for models like Han EV and Han DM-i reaching 35,000 yuan [6]. - BYD aims to sell 5.3 to 5.5 million vehicles in 2025, with smart driving models expected to account for 60% to 80% of total sales [6]. - The chairman of BYD announced a sales target of 5.5 million vehicles for 2025, representing a 30% increase from the previous year's 4.27 million [6]. Group 3: Market Impact - BYD's price reductions are expected to influence the automotive market significantly, as the company holds a leading position in domestic sales [7]. - The number of models experiencing price cuts in the first four months of this year has decreased compared to the previous year, indicating a cooling trend in the price war within the automotive market [7]. - Industry experts predict that competition will intensify in the second half of the year, but it will not revert to low-level "involution," focusing instead on diverse strategies to enhance product competitiveness [7].