25 November 2025 | 7:49PM CST Equity Research NIO Inc. (NIO): 3Q25 First Take: Operating profit beat on higher vehicle margin, 4Q25 volume/revenue guidance below expectation Exhibit 1: Nio 3Q25 result summary Nio reported 3Q25 result with total revenue slightly below expectation but operating profit beat, mainly attributed to higher vehicle gross margin from greater-than-expected BOM cost reduction. However, 4Q25 volume and revenue guidance was below expectation, with vehicle sales volume of 120k-125k units ...

Investment Rating - The report maintains a Buy rating on Shuanghuan Drive with an unchanged target price of Rmb50.0, indicating an expected share price return of 26.7% and a total expected return of 27.4% [7]. Core Insights - Shuanghuan Drive plans to outgrow the market despite concerns over a potential slowdown in China’s NEV demand in 2026. The company aims to increase dollar content per NEV, focus on overseas projects, and strengthen its cost structure [1][2]. - The company expects to achieve double-digit year-on-year growth in NEV gear revenue in 2026, driven by increased shipments of coaxial gears and differentials [1][2]. - Strong growth is anticipated in the intelligent gear and industrial robot businesses, while revenue from ICE, CV, and CM gear is expected to stabilize [1]. Summary by Sections NEV Gear Strategy - Shuanghuan plans to increase dollar content per NEV by selling more coaxial gears (ASP Rmb1,000-1,200/set) and differentials (ASP Rmb100-200/set), with shipments projected at 6.8 million sets of NEV gears and 1 million sets of differentials in 2025 [2]. - The shipment of differentials is expected to double in 2026 [2]. Overseas Projects - NEV gear exports are projected to rise from 400k-500k sets in 2024 to 700k-800k sets in 2025, and further to over 1 million sets in 2026, primarily driven by demand from Stellantis, Hyundai, Volvo, and Renault [3]. - The ASP and gross profit margin of overseas projects are higher than domestic projects due to a greater percentage of PHEV [3]. Intelligent Gear and Other Segments - Revenue from intelligent gear is expected to grow from Rmb860 million-880 million in 2025 to Rmb1.2 billion in 2026, fueled by demand from robot vacuum cleaners and e-bikes [4]. - Revenue from commercial vehicle gear is anticipated to remain stable in 2026, supported by demand from European tier-1 clients and US electric truck manufacturers [5]. - Construction machinery gear revenue is also expected to stabilize in 2026, despite supplying gears to Caterpillar's large engines [5].

Summary of BYD Co. Conference Call Company Overview - **Company**: BYD Co. (002594.SZ/1211.HK) - **Industry**: New Energy Vehicles (NEV) Key Points Growth Potential in Overseas Markets - **Overseas Market Growth**: BYD expects overseas markets to be a major growth driver, projecting sales volume to increase by 5%-14% to 1.5 million - 3.5 million units from 2026E to 2035E [1] - **NEV Penetration**: Current NEV penetration in key overseas markets is about 16%, approximately four years behind China. It is anticipated to follow China's >10% penetration increase from 2022 to 2024 [1][15] - **Total Addressable Market (TAM)**: By 2035E, overseas NEV penetration could reach China's level in 2028E, creating a TAM of 28 million units [1] Product Competitiveness - **Market Share Gain**: BYD's models are highly competitive in price, range, and size, with several models becoming best-sellers in their segments. The company aims for an 8% overseas passenger vehicle market share by 2035E, up from 1% in 2024 [2] - **Model Offerings**: BYD has a comprehensive portfolio of models and is well-positioned to capture top volume market share among global NEV companies [2] Financial Projections - **Earnings Growth**: BYD forecasts a 30% earnings CAGR from 2025E to 2028E, with overseas profit contribution increasing from 21% in 2024 to 60% by 2028E [5] - **Revised Estimates**: 2025E volume is lowered by 6%, while 2026E-2030E volume is increased by up to 3%. Net profit estimates are revised by -14% to +9% [5] Overseas Business Outlook - **Sales Volume Performance**: BYD's overseas sales volume has exceeded expectations, driven by expanding supply and successful new model launches [13][14] - **Dealer Network Expansion**: The company has rapidly expanded its dealer network, estimating a fourfold increase in the top 10 markets by the end of 2025 [16][43] Sustainability of Profit Levels - **Unit Profit Levels**: BYD maintains a unit profit of Rmb20k+ in overseas markets, supported by localized factories expected to achieve high utilization rates [25][26] - **Profitability Analysis**: The analysis indicates that overseas factories could sustain high unit profits despite higher costs [26] Inventory and Sales Dynamics - **Wholesale vs. Retail Volume**: The gap between wholesale and retail sales volume is narrowing, indicating healthy sales momentum and inventory levels [35][38] New Model Launches - **Model Launches in 2025**: BYD launched 8 new vehicle models in 1H25, compared to 6 and 7 in 2023 and 2024, respectively [44] - **Competitive Models**: Key models contributing to incremental volume include Song Plus DM-i, Sea Lion 07 EV, and Seagull, which have shown high competitiveness in their respective markets [45][56] Market Penetration and Future Projections - **Future Sales Projections**: BYD's total sales volume is estimated to reach approximately 9 million units by 2035E, with around 3.5 million from overseas markets [11] Additional Insights - **NEV Adoption Policies**: Favorable policies in top destinations support NEV adoption, although some countries are increasing tariffs and localization requirements [15][42] - **Competitive Landscape**: BYD's product portfolio still has room for expansion compared to local market leaders, indicating potential for further market share growth [14][19] This summary encapsulates the key insights from BYD's conference call, highlighting the company's growth strategies, market dynamics, and financial outlook in the NEV sector.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Auto Industry - **Key Drivers**: - Upcoming 3Q25 earnings results at the end of October - Auto shows and overseas debuts showcasing new models and product strategies for 2026 - Policy direction with a 50% probability of continued subsidies or stimulus in 2026, focusing on energy efficiency of NEVs [2][41] Company-Specific Insights BYD Company Limited - **3Q25 Earnings Preview**: Expected profitability rebound from Rmb5,500 in 2Q25 to around Rmb7,000 in 3Q25, with further improvement to Rmb8,000 in 4Q25. Consensus estimates may be aggressive [13][24] - **Market Share**: Loss in domestic market share attributed to aging models; new designs expected to be introduced at the Guangzhou Auto Show [21][22] - **Sales Projections**: Anticipated to deliver approximately 5.3 million units in 2026, with 1.3-1.4 million units from overseas markets [22][24] - **Profitability Outlook**: Projected blended profit per unit of Rmb9,000 to Rmb9,500 in 2026 [24] Geely Automobile Holdings Ltd. - **Share Price Performance**: Up 27% YTD, driven by a 30% earnings upgrade [15] - **3Q25 Earnings Forecast**: Expected to reach Rmb3.8 billion, a 60% YoY increase [15][33] - **Volume Growth**: Projected 15% growth in 2026, with over 50% growth in exports [33] XPeng Inc. - **Product Strategy**: Introduction of EREV powertrains and new battery electric SUVs planned for 2026 [25][26] - **Volume Growth**: Expected to achieve over 600,000 units in 2026, a 35% increase [26] - **Technology Day**: Scheduled for early November to detail humanoid robot strategy [26][29] NIO Inc. - **New Model Launches**: Successful launches of L90 and ES8 SUVs; L80 SUV expected in late 1Q26 [27][30] - **Profitability Outlook**: Anticipated narrowing of losses in 4Q25 due to new launches and reduced cash burn [28][30] Leapmotor - **Product Strategy**: Launch of new models expected to drive over 50% volume growth in 2026 [33] - **Profitability Improvement**: Projected to achieve GPM of 20% in the coming years [33] GAC Group - **Product Strategy**: Plans to launch new models across various brands with different NEV powertrains [38] - **Partnerships**: Collaboration with JD.com for battery-swapping EVs expected to enhance sales [38] SAIC Motor Corporation - **Product Strategy**: Anticipated benefits from VW's new model plan in China [39] - **Profitability Outlook**: Expected stabilization and improvement in profitability in 2026 [39] Li Auto - **New Launch**: i6 5-seater BEV SUV launched at Rmb249,800 [43] - **Sales Projections**: Expected to achieve 430,000 units in 2025 and 589,000 units in 2026 [43] Government Policy Insights - **Subsidy Policy**: Current trade-in subsidy expected to expire by year-end, but potential for extension with conditions on energy efficiency [41][42] - **Purchase Tax Eligibility**: New requirements for NEVs to qualify for tax incentives, emphasizing energy efficiency [42] Market Performance - **Overall Market Trends**: China autos' share prices up 22% YTD, with significant divergence among stocks [10] - **Sales Forecasts**: Anticipated growth in domestic PV sales, with projections for 2026 indicating continued demand [44] This summary encapsulates the key insights and projections from the conference call, highlighting the dynamics within the China auto industry and specific company strategies and performance expectations.

Summary of Ningbo Tuopu Group (601689.SS) Conference Call Company Overview - **Company**: Ningbo Tuopu Group - **Industry**: Automotive components supplier - **Current Rating**: Downgraded to Neutral - **12-Month Price Target**: Rmb68, implying a 2% downside from current price of Rmb69.14 Key Financial Highlights - **2Q25 Results**: Revenue and net profit were 14% and 13% below expectations, respectively, primarily due to a 13% year-over-year decline in global sales volume from Tesla, a key customer [1][30] - **Revenue Growth**: Revenue growth in 1H25 was +6% year-over-year, down from +33% in 1H24 [4] - **Net Income Estimates**: Adjusted net income estimates for 2H25E-2027E were cut by 4%-13% due to expected continued decline in Tesla sales [1][30] - **Market Performance**: Tuopu's share price increased by 50% from August 15 to September 10, driven by auto subsidy resumption and Tesla humanoid robot updates [2] Industry Dynamics - **NEV Market**: The growth in the New Energy Vehicle (NEV) market is slowing, with expectations of a decline in wholesale/retail growth from over 30% in 2023-2024 to 20%+ in 2025E-2026E [11][30] - **Tesla's Sales Volume**: Tesla's global sales volume is projected to decline by 9% year-over-year in 2H25E, impacting Tuopu's revenue significantly [1][30] Customer Insights - **Key Customers**: Despite Tesla's decline, Tuopu reported resilient growth from other domestic customers like Geely, BYD, and Li Auto, with wholesale volumes growing by +47%, +31%, and +8% year-over-year in 1H25 [11] - **Revenue Contribution**: Tesla's revenue contribution to Tuopu is expected to decrease from 35% in 2024 to 27% in 2025E [6] Risks and Opportunities - **Key Risks**: - Sales volume from key customers may be better or worse than expected [3][26] - Pricing pressure from OEM customers could impact revenue and margins [3][28] - Adoption pace of new products may vary, affecting long-term revenue growth [3][27] - **Opportunities**: - Expansion to overseas customers, including partnerships with European and US automakers, is seen as a potential growth area, although it may take time to realize [12][30] Valuation and Market Sentiment - **Current Valuation**: Trading at 30x 12-month forward P/E, in line with historical averages, but further re-rating is considered difficult due to slowing NEV growth [15][30] - **Market Expectations**: Post-results, Bloomberg's consensus for 2025E and 2026E revenue and EPS was revised down by 3%-7% and 4%-6%, indicating that market expectations may be peaking [15][30] Conclusion - **Investment Thesis**: The company is facing challenges due to declining sales from its key customer, Tesla, and a slowing NEV market. While there are stable revenue streams from domestic customers and potential overseas expansion, the overall outlook remains cautious with a Neutral rating [30][32]

Summary of Conference Call on CCL Supply Chain and Related Companies Industry Overview - The conference call focused on the Copper-Clad Laminate (CCL) industry, particularly in relation to AI infrastructure and electric vehicles (NEV) applications. [1][2] Key Companies Discussed - **Grace Fabric (603256.SS)**: Largest manufacturer of ultra-thin glass fabric in China, serving as an upstream material for M6-M9 CCL used in high-speed PCBs. [1] - **Shengyi Technology (SYTECH)**: Notable for its strong performance in AI-related CCL manufacturing, with a projected earnings growth of 52.8% year-over-year for 1H25. [2] - **Kingboard Laminates Holdings (KBL)**: Expected to see slower growth compared to SYTECH, with a forecasted revenue growth of 16% for 1H25. [3] Core Insights - **AI and NEV Driving Growth**: The CCL industry is expected to experience a growth cycle driven by AI infrastructure and NEV applications, with AI-related CCL projected to account for over 10% of total capacity in 2025, up from low single digits in 2024. [2] - **Performance Dispersion**: There is an anticipated dispersion in performance across the CCL cycle, with AI-infra CCL expected to show the strongest momentum, followed by NEV applications. Other sectors like home appliances and smartphones are expected to recover modestly due to macroeconomic softness. [1][2] - **Grace Fabric's Competitive Edge**: Grace Fabric claims to be the only Chinese manufacturer capable of producing low Dk-2 fabric, which is currently in short supply. This positions them favorably against global competitors like Nittobo. [5] - **Revenue Projections**: Grace Fabric anticipates record-high revenue of RMB 1.2 billion in 2025, with a net margin of over 20%. [6] Financial Highlights - **SYTECH's Financial Performance**: SYTECH reported a significant increase in earnings due to higher average selling prices (ASP) and gross margin expansion, primarily from AI-CCL contributions. [2] - **KBL's Financial Outlook**: KBL's revenue is projected to reach HK$10 billion for 1H25, with core earnings expected to grow by 19% year-over-year. However, KBL's growth is limited due to minimal exposure to AI. [3] - **Market Preferences**: Analysts prefer SYTECH over KBL and KBH based on higher AI exposure and growth potential. [3] Additional Insights - **Technological Barriers**: The shift towards AI applications has raised technological barriers in the CCL industry, creating a competitive moat for companies that can adapt to these new requirements. [7] - **Customer Base**: Grace Fabric's top customers include major players in the CCL market, such as Unimicron and EMC, indicating a strong market position. [5] Risks and Considerations - **Market Risks**: Potential risks include slower-than-expected recovery in consumer electronics, lower GDP growth in China, and fluctuations in oil prices that could impact demand. [19][24] - **KBL's Stock Pressure**: KBL may face stock pressure due to reduced shareholding by KBH aimed at lowering net gearing. [3] This summary encapsulates the key points discussed during the conference call, highlighting the dynamics within the CCL industry and the performance outlook for the involved companies.

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]