31 October 2025 | 7:05AM CST Equity Research Gree Electric Appliances Inc. (000651.SZ): 3Q25 First Take: Revenue miss amid ongoing market share pressure, interim dividend announced; Gree reported below-expected 3Q25 results post market close on Oct 30. Total revenue/net profit in 3Q25 was Rmb40,034mn/Rmb7,049mn, growing by -15%/-10% yoy, which was -18%/-2% vs. GSe. The company announced a Rmb1.0 interim dividend per share, implying a 28% dividend payout vs. Rmb3.86 EPS in 9M25 (vs. Rmb3.0 dividend per share ...

Core Viewpoint - Tesla's market share in the U.S. has significantly declined, reaching its lowest level since 2017, which raises concerns about the company's competitive position in the EV market [1][3]. Group 1: Market Share and Competition - Tesla's share of nationwide EV sales fell to 38% in August, down from over 80% at its peak [1]. - The decline in market share indicates that legacy automakers and new entrants are gaining traction in the EV space, leading to intensified competition for Tesla [3]. - The loss of market share is viewed as a strategic red flag, suggesting potential challenges in maintaining brand exclusivity and pricing power [4]. Group 2: Stock Performance and Analyst Opinions - Tesla stock has been range-bound over the past four months but is up more than 60% from its year-to-date low set in April [2]. - Morgan Stanley's senior analyst Adam Jonas maintains a long-term bullish outlook on Tesla, suggesting that the proposed $1 trillion milestone-based pay plan for Elon Musk could benefit shareholders [5][6]. - Despite Jonas' positive view, there is caution among other Wall Street analysts, indicating a lack of consensus on Tesla's stock outlook [7].

Summary of Meituan (3690) Conference Call Company Overview - **Company**: Meituan (3690) - **Industry**: Food Delivery and Local Commerce Key Points Financial Performance - **2Q25 Net Profit**: Dropped 90% year-over-year (yoy) due to increased consumer subsidies to compete with Alibaba and JD [1][3] - **Operating Profit**: Core local commerce operating profit fell 76% yoy to RMB 3.7 billion in 2Q25 [3] - **EBITDA and Net Profit**: Group EBITDA and net profit decreased by 81% and 89% yoy, respectively, but operating cash flow remained positive at RMB 5 billion [3] - **Net Cash**: Slight increase to RMB 144 billion in 2Q25 [3] Future Outlook - **2025E/26E Projections**: Expected net losses of RMB 7 billion and RMB 5 billion, respectively, due to market share loss and continued heavy subsidies [3][4] - **Free Cash Flow (FCF)**: Projected to reverse from RMB 47 billion in 2024 to negative RMB 2 billion in 2025E and 2026E [3] - **Credit Profile Deterioration**: Total debt to EBITDA ratio expected to widen from 1x in 2024 to 20x in 2026E, with EBITDA contracting 94% from RMB 48.5 billion in 2024 to RMB 2.9 billion in 2026E [3] Competitive Landscape - **Market Share Risks**: Potential loss of market share to Alibaba due to its aggressive expansion in the food delivery market [1][3] - **Competition Dynamics**: Management anticipates continued fierce competition, particularly in food delivery, which may lead to significant losses in core local commerce in 3Q [3][4] Credit Ratings and Recommendations - **Current Ratings**: Meituan is rated Baa1/A-/BBB+ by Moody's, S&P, and Fitch, with stable to positive outlooks [3][4] - **Downgrade Risks**: Risks of rating downgrades if competitive position weakens or leverage ratios remain high without earnings recovery [4] - **Investment Recommendation Change**: J.P. Morgan downgraded Meituan's bonds from Overweight to Neutral due to a cloudier financial outlook [1][4] Risks and Catalysts - **Key Downside Risks**: - Escalation of competition from Alibaba and JD with heavier subsidies - Larger-than-expected losses from overseas expansion - Potential rating downgrades by credit agencies [4] - **Key Upside Catalysts**: - Reduced competition if a smaller player exits the market - Faster-than-expected earnings recovery - Retaining market leadership despite intense competition [4] Conclusion - Meituan faces significant challenges in maintaining its competitive position in the food delivery market, with projections indicating potential losses and a deteriorating credit profile. The company's strategy of heavy subsidies to fend off competition may lead to further financial strain, prompting a cautious investment stance from analysts.