Investment Rating - The report maintains a BUY rating for GAC Group, indicating a potential return of over 15% over the next 12 months [3][9]. Core Insights - The launch of GAC's first model co-developed with Huawei, the GT7, in June 2026 is expected to be a positive catalyst for the company's shares [1][9]. - GAC aims to double its export volume to 250,000 units for its homegrown brands in the current year, which is anticipated to improve gross profit margins [9]. - The report projects a narrowing of GAC's net loss to RMB 4.8 billion in FY26E, supported by cost reductions and stabilization of equity income [1][9]. Financial Summary - Revenue is expected to decline from RMB 96.54 billion in FY25A to RMB 95.88 billion in FY26E, before recovering to RMB 102.37 billion in FY27E [2][11]. - The net profit is projected to improve from a loss of RMB 8.78 billion in FY25A to a loss of RMB 4.84 billion in FY26E, and further to a loss of RMB 1.23 billion in FY27E [2][11]. - The report estimates that GAC's gross profit will turn positive in FY26E, reaching RMB 483 million, compared to a loss of RMB 2.7 billion in FY25A [11][14]. Valuation - The target price for GAC's H-shares is set at HK$4.20, reflecting a sum-of-the-parts valuation approach [3][13]. - The valuation of GAC's consolidated businesses is estimated at HK$3.40 per share, while its joint ventures and associates are valued at HK$0.80 per share [13][14]. - The report indicates a target price for A-shares at RMB 9.00, based on an A/H premium of 142% [3][13].