Vi e w p o i n t | 06 Nov 2025 00:46:00 ET │ 14 pages 2026E new technology — Mgmt. anticipates their new technology launched in 2026E to be likely a disruptive innovation to the industry. Compared to God's Eye in 2025, next year's new technologies will be more intuitive and better able to solve user pain points, per mgmt. (Continued) | Earnings Summary | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | Year to | Net Profit | Diluted EPS | EPS growth | P/E | P/B | ROE | Yield | | 31 Dec | (R ...

Summary of BYD Co. (002594.SZ) 3Q25 Conference Call Company Overview - **Company**: BYD Co. (002594.SZ) - **Industry**: New Energy Vehicles (NEV) Key Financial Results - **Revenue**: RMB 194.985 billion, down 3% year-over-year (yoy) and quarter-over-quarter (qoq), and 11% below Goldman Sachs estimates (GSe) [1][6] - **Net Profit**: RMB 7.823 billion, a decrease of 26.4% yoy and 32.6% qoq, also below GSe [1][6] - **Gross Margin**: Improved to 17.6%, slightly above GSe of 17.4%, up from 16.3% in 2Q25 [1][6] - **Operating Margin**: Increased qoq due to tighter cost control [1] - **Net Margin**: 4.0%, down from previous quarters [6] Sales Performance - **Vehicle Deliveries**: 1.1 million new energy passenger vehicles in 3Q25, a decline of 2% yoy and 3% qoq [1][4] - **Market Share**: China NEV wholesale market share at 28.0%, down 7.2 percentage points yoy and 3.8 percentage points qoq [4] - **Premium Brands Sales**: Denza, Fangchengbao, and Yangwang had total sales of 36k, 55k, and 1,502 units respectively, showing significant growth [4] - **Overseas Sales**: 233k units sold, a 156% increase yoy but a 10% decrease qoq, contributing to 21% of total sales [4] Cost and Expenses - **Cost of Goods Sold (COGS)**: RMB 160.639 billion, down 11.3% yoy [6] - **Operating Expenses**: 3% below GSe, indicating effective cost management despite revenue decline [1] - **Interest Expense**: Increased due to rising long-term debt, reaching RMB 66 billion in 3Q25 [1] Balance Sheet and Cash Flow - **Net Cash**: RMB 87 billion, down from RMB 116 billion in 2Q25 [5] - **Operating Cash Flow**: RMB 9 billion, significantly lower than RMB 23 billion in 2Q25 [5] - **Debt to Equity Ratio**: Increased to 34% from 13% in 2Q25 [5] Future Outlook and Investor Concerns - **Investor Call Scheduled**: Management will address consumer demand, product strategies, overseas expansion, and potential impacts from EU-China negotiations on EV tariffs [2] - **Growth Expectations**: BYD is expected to grow total vehicle sales from 4.3 million in 2024 to 8.9 million by 2030, capturing one-third of China's NEV wholesale demand [7] - **Risks**: Potential risks include intensifying competition in the electric vehicle market, slower overseas expansion, and lower-than-expected external battery sales [9][10] Investment Thesis - **Rating**: Buy rated with a target price based on discounted cash flow (DCF) methodology [10] - **Catalysts for Growth**: Strong sales, supportive NEV policies, and breakthroughs in overseas markets [9] Conclusion - BYD's 3Q25 results reflect challenges in sales volume and profitability, but improvements in margins and cost control indicate potential for recovery. The company is well-positioned for future growth, particularly in overseas markets, despite facing significant competition and market risks.

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **China Auto Manufacturers** industry, specifically the **New Energy Vehicle (NEV)** market trends as of September 2025. Core Insights and Arguments 1. **NEV Market Growth**: - In September 2025, domestically produced NEV passenger vehicle (NEV-PV) sales increased by **17% month-over-month (MoM)** and **17% year-over-year (YoY)**, surpassing expectations [1][9][10]. 2. **BEV Market Penetration**: - Battery Electric Vehicle (BEV) penetration rose, while Internal Combustion Engine (ICE) sales penetration fell to **41.6%**, a decline of **1.9 percentage points (ppt) MoM** [2][10]. 3. **Market Share Changes**: - **Tesla**, **Changan**, and **Seres** gained BEV market share, each increasing by **0.4, 0.4, and 0.2 ppt MoM**, respectively. Conversely, **Geely** and **BYD** lost market share by **1.2 and 0.6 ppt MoM** [2][3]. - **GWM**, **Geely**, and **DF** gained PHEV market share by **1.9, 1.0, and 0.6 ppt MoM**, while **BYD** and **Changan** lost share [2][3]. 4. **Inventory Levels**: - Overall inventory for major OEMs decreased from **2.6 months** at the end of August to **2.3 months** at the end of September [5][26]. - Passenger Vehicle (PV) inventory dropped to **2.0 months**, NEV inventory to **1.4 months**, and ICE inventory to **2.8 months** [5][26]. 5. **Tesla's Performance**: - Tesla's domestic insurance retail sales reached **70,862 units**, a **25% increase MoM** but flat YoY. Wholesales were **90,812 units**, up **9% MoM** and **3% YoY** [4][22]. 6. **Chinese Brands' Market Share**: - Local Chinese brands maintained a high NEV market share of **83.2%**, unchanged MoM, compared to US brands at **12.9%**, which increased by **0.5 ppt MoM** [6][10]. 7. **ICE Market Dynamics**: - German brands saw an increase in ICE market share, while Chinese brands' ICE market share fell by **1.3 ppt MoM** to **33.7%** [3][10]. 8. **Sales Performance by OEM**: - Notable sales figures for September 2025 include: - **BYD**: 342,892 units (-11% YoY) - **Geely**: 158,514 units (+88% YoY) - **Tesla**: 70,862 units (0% YoY) - **Li Auto**: 34,325 units (-35% YoY) [9][22]. Additional Important Insights - The overall NEV-PV retail sales totaled **1,288,348 units**, reflecting a **16% increase YoY** [9][10]. - The report indicates a competitive landscape with significant shifts in market share among both local and international brands, highlighting the dynamic nature of the NEV sector in China [1][6][10]. This summary encapsulates the key points discussed in the conference call regarding the current state and trends within the China Auto Manufacturers industry, particularly focusing on the NEV market.

October 14, 2025 10:18 AM GMT China Autos & Shared Mobility | Asia Pacific Investor Presentation: China Autos Overview | Downloaded by Neil.Wang@troweprice.com M | Not for redistribution without written consent of Morgan Stanley | | | --- | --- | --- | | | | Foundation | | October 14, 2025 10:18 AM GMT | | | | China Autos & Shared Mobility Asia Pacific | Morgan Stanley Asia Limited+ | | | | Tim Hsiao | | | | Equity Analyst | | | Investor Presentation: China Autos Overview | Tim.Hsiao@morganstanley.com | +85 ...

Summary of the Conference Call on China Auto Manufacturers Industry Overview - The conference call focused on the **China Auto Manufacturers** industry, particularly the performance of **New Energy Vehicles (NEVs)** in August 2025, as indicated by insurance retail sales trends and market share data. Key Points and Arguments 1. **NEV Market Share Growth**: - Major players such as **Tesla**, **SAIC GM Wuling**, **Nio**, **BYD**, and **Leapmotor** gained NEV market shares month-over-month (MoM) in August 2025. The sales of domestically produced NEV passenger vehicles (PV) increased by **12% MoM** and **8% year-over-year (YoY)**, aligning with expectations [2][10]. 2. **BEV Penetration Trends**: - Battery Electric Vehicle (BEV) penetration rose, while Internal Combustion Engine (ICE) sales penetration fell to **43.6%**, a decline of **2.2 percentage points (ppt) MoM**. BEV/PHEV/EREV trends showed increases of **2.3/0.7/-0.7 ppt MoM** respectively [3]. 3. **Market Share Changes**: - **Tesla**, **Nio**, **BYD**, and **Xiaomi** saw increases in BEV market share by **1.4/1.2/0.5/0.2 ppt MoM**. Conversely, **Geely** and **GAC** experienced declines of **1.3/0.8 ppt MoM** [3]. 4. **PHEV Market Dynamics**: - **Geely** and **Chery** gained PHEV market share by **2.4/0.8 ppt MoM**, while **GWM** and **Changan** lost share by **0.9/0.4 ppt MoM** [4]. 5. **EREV Market Performance**: - **Li Auto** lost EREV market share by **3.8 ppt MoM**, while **Dongfeng**, **Leapmotor**, and **Seres** gained shares of **2.2/1.1/0.9 ppt MoM** respectively [4]. 6. **ICE Market Share Trends**: - German brands increased their ICE market shares, while Chinese brands' ICE market share dipped slightly to **35.0%**, a decrease of **0.1 ppt MoM**. Notably, **Geely**, **GWM**, and **SAIC** gained ICE share by **1.2/0.7/0.5 ppt MoM** [4][5]. 7. **Tesla's Performance**: - Tesla's insurance retail sales for domestically produced vehicles reached **56,695 units**, a **38% increase MoM** but a **11% decrease YoY**. Wholesales totaled **83,192 units**, up **23% MoM** but down **4% YoY** [5][19]. 8. **Inventory Levels**: - Overall inventory for major OEMs decreased from **2.8 months** at the end of July to **2.6 months** at the end of August. Passenger vehicle inventory dropped to **2.2 months**, NEV inventory to **1.7 months**, while ICE inventory remained flat at **3.0 months** [6][24]. 9. **Local Brand Market Share**: - Local Chinese brands maintained a high NEV market share of **83.2%**, a decrease of **1.7 ppt MoM**, compared to US brands which increased to **12.4%** [7]. Additional Important Insights - The data indicates a competitive landscape where local brands are still dominant in the NEV sector, but foreign brands are gradually increasing their presence in the ICE market. - The trends in inventory levels suggest a tightening supply chain, which could impact future production and sales strategies for OEMs. - The performance of Tesla highlights the volatility in the market, with significant month-over-month fluctuations despite a year-over-year decline. This summary encapsulates the critical insights from the conference call regarding the current state and trends within the China Auto Manufacturers industry, particularly focusing on NEVs and market dynamics.

Summary of Zhejiang Shuanghuan Driveline Co. Ltd. Conference Call Company Overview - **Company**: Zhejiang Shuanghuan Driveline Co. Ltd. - **Ticker**: 002472.SZ - **Market Cap**: Rmb31,576.7 million - **Current Share Price**: Rmb37.26 (as of August 29, 2025) - **Price Target**: Rmb43.00, indicating a 15% upside potential [6][6] Industry Insights - **Industry**: China Industrials - **Key Growth Drivers**: - Strong demand for New Energy Vehicles (NEVs) supported by new models from companies like Xiaomi, Onvo, and Xpeng [2][2] - Increased overseas visibility with monthly shipments to Stellantis ramping up to 50,000 units, annualized to 600,000 units, alongside orders from Volvo, Renault, and Hyundai [2][2] Financial Performance - **Revenue Projections**: - Intelligent actuators expected revenue: Rmb850-900 million for 2025 and Rmb1.2 billion for 2026, driven primarily by vacuum cleaners [3][3] - Revenue for 2025 estimated at Rmb9,996 million, with a growth trajectory leading to Rmb12,277 million by 2027 [6][6] - **Gross Profit Margin (GPM)**: - Current GPM for intelligent actuators at 19% in 1H25, with a target of 25% through a balanced product mix [3][3] - Management aims for a long-term GPM of approximately 30% and a net profit margin (NPM) of 15-17% [8][8] Product Development - **Coaxial Gearboxes**: Anticipated improvement in performance in the second half of 2025, with integration into platforms from Zeekr and Lynk [2][2] - **Robotic Reducers**: Contributed about 5% to 1H25 revenue with a GPM of 35%, with annualized capacity reaching 50,000 units [4][4] - **New Reducers for Humanoid Robots**: Currently in development and testing stages with key clients [8][8] Risks and Challenges - **Downside Risks**: - Slower-than-expected market share gains and weaker overseas demand [11][11] - Intensifying competition in the gear and actuator market within China [11][11] Analyst Recommendations - **Stock Rating**: Overweight, indicating a positive outlook on Shuanghuan's topline growth from NEVs and intelligent actuators, along with margin expansion [8][8] - **Valuation Methodology**: Price target derived using a 25x P/E ratio for 2025 estimates, reflecting growth visibility and potential demand expansion [9][9] Conclusion Zhejiang Shuanghuan Driveline Co. Ltd. is positioned for growth driven by NEV demand and intelligent actuator advancements, with a focus on improving margins and expanding product offerings. The company faces competitive pressures but maintains a positive outlook supported by strong revenue projections and strategic product developments.

Summary of BYD Co. (002594.SZ) 2Q25 Conference Call Company Overview - **Company**: BYD Co. (002594.SZ) - **Industry**: Automotive, specifically focusing on New Energy Vehicles (NEVs) Key Financial Results - **Revenue**: - 1H25 revenue from automobiles and related products increased by 32% year-over-year (yoy) but decreased by 22% quarter-over-quarter (hoh) - Vehicle sales volume rose by 33% yoy but fell by 19% hoh - Revenue from mobile handset components and assembly services declined by 6% yoy and 21% hoh [1][2] - **Gross Margin**: - Automobiles and related products segment recorded a gross margin of 20.4%, down 2.0 percentage points (pp) yoy and 1.9 pp hoh - Mobile handset components and assembly service segment had a gross margin of 7.7%, up 0.1 pp yoy but down 1.3 pp hoh [2] - **Net Income**: - Reported net income for 2Q25 was Rmb6.356 billion, a decrease of 38.2% compared to the previous year [6] Impact of Dealer Incentives - BYD provided Rmb666 to each dealer for every vehicle delivered during the first five months of 2025, resulting in an approximate Rmb1 billion impact on revenue, which directly affected net profit - Adjusted figures suggest that 2Q25 revenue/net profit would have been Rmb202 billion and Rmb7 billion, respectively, without this incentive [2] Balance Sheet and Cash Flow - **Net Cash**: BYD ended 2Q25 with Rmb116 billion in net cash, a decrease from Rmb122 billion in 1Q25 - **Operating Cash Flow**: Increased to Rmb23 billion in 2Q25 from Rmb8.6 billion in 1Q25 - **Capital Expenditures (Capex)**: Rmb43 billion in 2Q25, up from Rmb37 billion in 1Q25 - **Working Capital**: Positive changes noted due to a decrease in inventories, with receivable, inventory, and payable days all shorter quarter-over-quarter [3] Investment Thesis - BYD is positioned as a leading NEV manufacturer in both domestic and international markets, with expectations to grow total vehicle sales volume from 4.3 million in 2024 to 8.9 million by 2030 - The company is expected to capture one-third of China's NEV wholesale demand - Current share prices are below historical averages, presenting an attractive investment opportunity - Catalysts for growth include strong sales, supportive NEV policies, and breakthroughs in overseas markets - Risks include intensified competition in the electric vehicle sector and slower-than-expected overseas expansion [8] Price Target and Valuation - **12-Month Price Target**: Rmb141.33 for A shares and HK$139 for H shares, indicating an upside of 29.3% and 24.1%, respectively - **Market Capitalization**: Rmb954.1 billion (approximately $133.7 billion) - **P/E Ratio**: Expected to be 17.4 in 2024, decreasing to 12.3 by 2027 [7][10] Conclusion - BYD's recent financial performance indicates challenges in revenue and profit margins, primarily due to dealer incentives and market conditions - However, the long-term outlook remains positive with significant growth potential in the NEV sector, supported by a comprehensive product portfolio and strategic market positioning [8][9]

Core Insights - BorgWarner has secured a significant contract with a major Chinese OEM for electric motors, highlighting its strong position in China's rapidly growing NEV market [1][2] - The awarded motor features a platform-based design suitable for various NEV applications and utilizes an innovative ultra-short hairpin welding process to enhance space efficiency [1][6] - BorgWarner is expanding its motor operations in China, including a new manufacturing base in Wuhu, which will increase motor capacity and support scalable delivery [2][6] Company Developments - The partnership with the Chinese OEM has lasted nearly a decade, indicating a strong and ongoing relationship [2] - BorgWarner's commitment to delivering efficient motor solutions aligns with the electrification trends in the automotive industry [2][3] - The new Wuhu facility will feature intelligent manufacturing lines capable of producing multiple motor platforms, enhancing operational efficiency [2][6] Industry Context - The NEV market in China is experiencing rapid growth, creating opportunities for companies like BorgWarner to leverage their technological advantages [2] - The demand for electric motors is increasing as the automotive industry shifts towards electrification, positioning BorgWarner favorably in this evolving landscape [2][3]

Investment Rating - The report assigns an "In-Line" investment rating for the China Autos industry [4]. Core Insights - The report forecasts 28.3 million units of passenger vehicle (PV) sales in China for 2025, representing a 3% year-over-year increase, and 14.9 million units of new energy vehicle (NEV) sales, which is a 21% year-over-year increase [9][13]. - The penetration of NEVs is expected to reach 15.6% by April 2025, indicating a growing trend in the adoption of electric vehicles [21]. - The report highlights that local brands are continuing to gain market share from foreign brands in the PV market [50]. Summary by Sections Market Overview - The report estimates that the wholesale volume of PVs in China will grow from 26.0 million units in 2023 to 28.3 million units in 2025, with a projected growth rate of 3% in 2025 [13]. - NEV wholesale volume is expected to increase significantly, with estimates of 14.9 million units in 2025, reflecting a 22% growth rate [14]. Sales and Production Forecast - The report projects that domestic PV sales will remain relatively stable, with a slight decrease expected in 2026 [13]. - Export sales are anticipated to grow significantly, with a forecast of 5.7 million units in 2025, marking a 15% increase year-over-year [13]. Competitive Landscape - The report notes intensifying competition in the China EV market, with local brands gaining share from foreign brands [45]. - Tech heavyweights are increasingly entering the market, partnering with local OEMs to develop smart EVs and autonomous driving solutions [47][48]. Technological Advancements - The forecast for L2+ autonomous driving penetration has been raised to 25% in 2025, indicating advancements in autonomous vehicle technology [16][18]. - The report emphasizes the importance of collaborations among OEMs to enhance innovation and reduce costs in vehicle development [67]. Export Dynamics - Asia and Europe accounted for more than 65% of China's vehicle exports in the year-to-date 2025, highlighting the significance of these markets for Chinese automakers [54]. - The report outlines planned capacity expansions for several OEMs in various international markets, indicating a strategic focus on global expansion [62].

Summary of BYD Co. (002594.SZ/1211.HK) 1Q25 Earnings Review Company Overview - **Company**: BYD Co. (002594.SZ/1211.HK) - **Industry**: Automotive (specifically New Energy Vehicles - NEV) Key Financial Results - **Net Profit**: Rmb9.2 billion in 1Q25, aligning with the pre-announcement range of Rmb8.5 billion to Rmb10 billion [2] - **Sales Volume**: Total sales volume of 1 million units in 1Q25, representing a 60% year-over-year increase but a 34% quarter-over-quarter decrease [5][6] - **Gross Margin**: Reported at 20.1%, a decline of 0.6 percentage points year-over-year, attributed to an average transaction price decline of 11% year-over-year across vehicle models [7][8] - **Operating Margin**: Expected to improve to 4.3% in 2Q25, reflecting continued operating leverage despite lower gross margins [7][8] Market Position and Strategy - **Resilience**: BYD is viewed as one of the most resilient auto OEMs amid macroeconomic uncertainty and competition, supported by a strong pipeline of new models and an industry-leading position [2][6] - **Volume Forecast**: Annual volume forecast remains unchanged at 5.5 million units [2][6] - **New Models**: Eight new vehicle models were unveiled at the 2025 Shanghai Auto Show, including various SUVs and sedans across different brands [5] Competitive Landscape - **Pricing Pressure**: Anticipated gross margin pressure of 3 percentage points quarter-over-quarter into 2Q25 due to intensifying competition [2][7] - **Operating Leverage**: Despite lower gross margins, operating margin showed a year-over-year improvement, indicating effective cost control and scale economics [7][8] Overseas Expansion - **Export Performance**: Monthly exports reached a record high of 73,000 units in March 2025, with significant contributions from Asia Pacific, South America, and Europe [7][8] - **Growth Expectations**: Higher growth is expected from Europe, supported by increased freight capacity and favorable EU policies regarding electric vehicle pricing [7][8] Investment Thesis - **Growth Potential**: BYD is positioned to capture significant market demand both domestically and internationally, with expectations to grow total vehicle sales from 4.3 million in 2024 to 8.9 million by 2030 [9] - **Valuation**: Target prices for A/H shares are set at Rmb436/HK$428, implying an upside of 18%/8% [2][10] - **Risks**: Key risks include intensifying competition in the electric vehicle market, slower-than-expected overseas expansion, and lower-than-expected external battery sales [10] Conclusion - **Rating**: Reiterated Buy rating based on strong sales performance, new supportive policies for the NEV industry, and potential breakthroughs in overseas markets [2][10]