Core Viewpoint - Chery Automobile plans to conduct a global offering of 297 million shares from September 17 to September 22, 2025, with a share price range of HKD 27.75 to HKD 30.75, aiming to raise approximately HKD 8.441 billion [1][3] Financial Performance - Revenue increased from RMB 92.618 billion in 2022 to RMB 163.205 billion in 2023, and is projected to reach RMB 269.899 billion in 2024 [2] - Profit for the year rose from RMB 5.806 billion in 2022 to RMB 10.444 billion in 2023, with a further increase to RMB 14.334 billion in 2024 [2] - For the three months ending March 31, 2024, revenue was RMB 54.91 billion, increasing to RMB 68.223 billion for the same period in 2025 [2] Use of Proceeds - Approximately 35% of the net proceeds from the global offering will be allocated to R&D for various vehicle models over the next one to three years [3] - About 25% will be used for R&D of next-generation vehicles and advanced technologies to enhance core technical capabilities [3] - 20% is earmarked for expanding overseas markets and executing globalization strategies over the next one to four years [3] - 10% will be invested in upgrading production facilities in Wuhu, Anhui, and another 10% for working capital and general corporate purposes [3] Strategic Partnerships - The company has entered cornerstone investment agreements with several investors, including JSC International Investment Fund SPC and CICC Financial Trading Limited, committing to subscribe for shares totaling approximately USD 587 million [2]

Core Viewpoint - The passenger car sector experienced a decline of 0.58% on September 16, with Haima Automobile leading the drop, while the Shanghai Composite Index rose by 0.04% and the Shenzhen Component Index increased by 0.45% [1] Group 1: Market Performance - The closing price for the passenger car sector showed mixed results, with notable declines in companies like BYD (-0.83%) and Seres (-1.20%), while Beiqi Blue Valley and GAC Group saw slight increases of 0.91% and 0.90% respectively [1] - The total net outflow of main funds in the passenger car sector was 843 million yuan, while retail investors contributed a net inflow of 566 million yuan [1] Group 2: Fund Flow Analysis - Beiqi Blue Valley had a main fund net inflow of 89.43 million yuan, while Haima Automobile saw a net outflow of 14.35 million yuan [2] - The main fund net outflow for Seres was significant at 310 million yuan, indicating a strong selling pressure [2] - Retail investors showed a positive net inflow in several companies, including BYD with 313 million yuan and GAC Group with 17.31 million yuan [2]

Group 1 - The core viewpoint of the report indicates that the automotive sector experienced a revenue growth of 9.0% year-on-year and 16.6% quarter-on-quarter in Q2, driven by stable growth in passenger car sales, with wholesale and retail volumes increasing by 11% and 13% respectively [1] - The passenger car segment's revenue also saw a year-on-year increase of 11% and a quarter-on-quarter increase of 22%, although the net profit margin decreased by 1.4 and 0.8 percentage points quarter-on-quarter, attributed to intensified competition among domestic brands and consumer discounts on new cars [1] - Accounts receivable turnover days for the passenger car segment decreased quarter-on-quarter, leading to a net increase in operating cash flow of 252 billion and 972 billion respectively [1] Group 2 - The components segment experienced a slight decrease in accounts receivable turnover days in Q2, indicating that the benefits of shortened payment terms have not yet fully reflected in the financial statements [1] - The "trade-in" policy is expected to significantly support sales during the peak seasons of September and October [1] - The report highlights the potential of intelligent components, the favorable impact of declining raw material prices on tires, and the strong export performance of motorcycles as key areas to watch [1]

Core Viewpoint - The automotive sector showed a revenue growth of 9.0% year-on-year and 16.6% quarter-on-quarter in Q2, driven by stable growth in passenger vehicle sales and an increase in wholesale and retail volumes [1] Group 1: Revenue and Sales Performance - Passenger vehicle sales increased by 11% in wholesale and 13% in retail quarter-on-quarter [1] - The revenue for the passenger vehicle segment grew by 11% year-on-year and 22% quarter-on-quarter [1] Group 2: Profitability and Financial Metrics - The net profit margin for the passenger vehicle segment decreased by 1.4 percentage points year-on-year and 0.8 percentage points quarter-on-quarter, attributed to intense competition among domestic brands and consumer discounts on new vehicles [1] - Accounts receivable turnover days for the passenger vehicle segment decreased quarter-on-quarter, contributing to a net increase in operating cash flow of 252 billion and 972 billion respectively [1] Group 3: Component Sector Insights - The accounts receivable turnover days for the components sector slightly decreased quarter-on-quarter, indicating that the benefits of shortened payment terms have not yet fully reflected in the financial statements [1] Group 4: Market Outlook - The "trade-in" policy is expected to support sales during the peak seasons of September and October [1] - There is a focus on the rapidly evolving intelligent components, favorable raw material price declines for tires, and strong export performance in the motorcycle sub-sector [1]

Core Insights - The passenger car sector experienced a rise of 1.78% on September 15, with Haima Automobile leading the gains [1] - The Shanghai Composite Index closed at 3860.5, down 0.26%, while the Shenzhen Component Index closed at 13005.77, up 0.63% [1] Passenger Car Sector Performance - The top-performing stocks included: - Haima Automobile (000572) with a closing price of 5.40, up 9.98% and a trading volume of 684,500 shares, totaling 363 million yuan in transaction value [1] - BYD (002594) closed at 108.70, up 2.63% with a trading volume of 974,800 shares, totaling 10.62 billion yuan [1] - The overall net inflow of main funds in the passenger car sector was 1.434 billion yuan, while retail investors saw a net outflow of 785 million yuan [1] Fund Flow Analysis - Major fund inflows were observed in: - BYD with a net inflow of 840 million yuan, accounting for 7.91% of the total [2] - Seres (601127) with a net inflow of 524 million yuan, representing 8.28% [2] - Notable outflows included: - Haima Automobile with a net outflow of 811.79 million yuan from retail investors, accounting for 22.34% [2] - Great Wall Motors (601633) with a net outflow of 250.27 million yuan, representing 5.77% [2]

Investment Rating - The report maintains a positive outlook on the automotive sector, suggesting an increase in allocation towards automotive dividend style configurations in the second half of 2025 [4]. Core Insights - The automotive industry is at a crossroads, with the end of the electric vehicle (EV) dividend phase and the dawn of automotive intelligence. The report suggests that structural opportunities may arise similar to previous transitions in 2011 and 2018 [4]. - The report emphasizes the importance of domestic consumption expansion and quality improvement in the automotive sector, as outlined in the "Automotive Industry Stabilization and Growth Work Plan (2025-2026)" issued by eight government departments [51]. - The report forecasts a total vehicle sales target of approximately 32.3 million units for 2025, with a year-on-year growth of about 3%, and expects new energy vehicle sales to reach around 15.5 million units, growing by approximately 20% [51][52]. Summary by Sections Weekly Review - In the first week of September, the total number of compulsory insurance for passenger vehicles was 360,000 units, reflecting a week-on-week decrease of 30.0% [50]. - The report highlights the performance of various segments, with commercial trucks showing the best performance at +4.2%, while passenger vehicles declined by -1.8% [3]. Market Performance - The automotive sector ranked 15th in A-shares and 21st in Hong Kong stocks for the week, indicating a relatively average performance compared to other sectors [8][10]. - The report notes that the overall price-to-earnings (P/E) ratio for the automotive sector has decreased, with specific segments like passenger vehicles trading at 0.94 times the P/E of parts [36][43]. Industry Trends - The report identifies key changes in the industry, including new model announcements and strategic partnerships aimed at accelerating the commercialization of autonomous vehicles [3]. - The report anticipates a significant increase in the penetration of L3 and L2+ intelligent driving technologies by 2025, driven by major players like Tesla and Huawei [55][56]. Investment Recommendations - The report recommends focusing on dividend and quality configurations in segments such as buses, heavy trucks, and two-wheelers, as well as selecting stocks in the AI and robotics sectors [4]. - Specific stocks highlighted for potential investment include Yutong Bus, China National Heavy Duty Truck, and various parts manufacturers [4].

Core Viewpoint - The report highlights significant target price increases for several companies from September 8 to September 14, indicating strong bullish sentiment from brokers towards these stocks [1][2]. Group 1: Target Price Increases - Aima Technology, Boss Electric, and Dong'e Ejiao saw target price increases of 90.44%, 78.46%, and 71.84% respectively, ranking them at the top of the list [1][2]. - Other notable companies with significant target price increases include Taiji Co. (65.65%), Aikodi (63.53%), and Kebo Da (62.59%) [2]. Group 2: Broker Recommendations - A total of 840 listed companies received broker recommendations during the same period, with Tongkun Co. receiving the highest number of recommendations at 8 [3]. - Other companies with multiple recommendations include Saisir (6 recommendations) and Senqilin (5 recommendations) [3]. Group 3: Rating Adjustments - During the period, 21 companies had their ratings upgraded, including Chipuan Co. from "Hold" to "Buy" by Guotou Securities [4]. - Other upgrades include Zaiseng Technology and Zhongmu Co., both raised to "Buy" from "Hold" by their respective brokers [4]. Group 4: Rating Downgrades - A total of 19 companies experienced rating downgrades, with Shanghai Hanxun's rating lowered from "Buy" to "Hold" by Shanxi Securities [5]. - Other notable downgrades include Huali Group and Shengke Communication, both downgraded from "Buy" to "Hold" [5]. Group 5: First Coverage - Brokers issued 109 instances of first coverage, with Ice Wheel Environment and Lingxiao Pump Industry receiving "Hold" ratings from their respective brokers [6]. - Other companies like Guomai Culture and Mindray Medical received "Buy" ratings, indicating positive initial outlooks [6].

Group 1 - The core viewpoint of the article highlights the differentiation in the passenger car market, driven by scale effects and high-end product offerings, leading to profitability improvements [2] - In Q2 2025, the wholesale sales of passenger cars reached 7.111 million units, a year-on-year increase of 13.0% and a quarter-on-quarter increase of 11.8% [29] - The wholesale sales of new energy passenger cars were 3.629 million units, up 33.9% year-on-year and 26.3% quarter-on-quarter, indicating strong growth in this segment [29] - The revenue of sample enterprises in the passenger car sector reached 673.96 billion yuan, reflecting a year-on-year increase of 13.8% and a quarter-on-quarter increase of 20.2% [42] - The overall gross margin for passenger car companies was 15.0%, showing a slight decline compared to the previous year and quarter, with variations in performance among different companies [2] Group 2 - The automotive parts sector saw revenue growth, with Q2 2025 revenue reaching 266.42 billion yuan, a year-on-year increase of 15.7% and a quarter-on-quarter increase of 14.5% [3] - The gross margin for the parts sector was 18.2%, an increase of 0.6 percentage points year-on-year and 0.7 percentage points quarter-on-quarter, benefiting from scale effects and reduced raw material costs [3] - The net profit growth for the parts sector was 11.9% year-on-year and 18.5% quarter-on-quarter, indicating improved profitability [3] Group 3 - The motorcycle segment experienced significant growth, with Q2 2025 sales reaching 297,000 units, a year-on-year increase of 23.9% and a quarter-on-quarter increase of 44.9% [4] - Revenue for the motorcycle sector was 17.28 billion yuan, reflecting a year-on-year increase of 20.5% and a quarter-on-quarter increase of 20.1% [4] - The gross margin for key motorcycle companies was 23.3%, showing a slight decline year-on-year but an increase quarter-on-quarter [4] Group 4 - Investment recommendations include focusing on high-quality domestic brands in the passenger car sector, such as Geely, Xpeng, Li Auto, BYD, and Seres [4] - In the parts sector, recommendations include companies involved in intelligent driving and smart cockpits, such as Bertel and Jifeng [4] - For motorcycles, leading companies like Chunfeng Power and Longxin General are recommended [7]

Key Points - The article highlights the performance of the automotive sector, with a focus on passenger car sales and the impact of new policies on the market [2][45] - It emphasizes the strong performance of the automotive sector in the stock market, outperforming the broader market indices [3] - The article suggests a core investment portfolio, recommending several key automotive companies [4][11] - It discusses the upcoming catalysts in the robotics sector, particularly related to Tesla's Optimus V3 [5][17] - The article notes the significant new model launches in the passenger car segment, which are expected to drive sales [6][12] - It provides investment recommendations across various segments, including passenger cars, components, and robotics [7][19] Automotive Sales Data - In the first week of September 2025, passenger car sales reached 368,000 units, down 9.5% year-on-year and down 29.8% month-on-month [2][45] - New energy vehicle sales were 221,000 units, up 3.1% year-on-year but down 23.6% month-on-month, with a penetration rate of 60.2%, an increase of 4.8 percentage points [2][45] Market Performance - The automotive sector in A-shares rose by 3.9% from September 8 to September 12, outperforming the CSI 300 index, which increased by 2.9% [3] - Sub-sectors such as automotive parts and services saw significant gains, while passenger cars experienced a slight decline of 0.8% [3] Investment Recommendations - The article recommends focusing on high-quality domestic brands that are accelerating in smart technology and globalization, including Geely, Xpeng, Li Auto, BYD, and Xiaomi [4][14] - It also highlights specific companies in the automotive parts sector and robotics that are expected to benefit from industry trends [7][19] Robotics Sector Insights - The robotics sector is anticipated to see significant catalysts in Q4 2025, particularly with the release of Tesla's Optimus V3 [5][17] - The article notes that the production of Optimus V3 is expected to ramp up quickly, with a target of producing hundreds of prototype units by the end of 2025 [5][17] New Model Launches - Several new models are set to launch in September, including vehicles from Chery, NIO, and Geely, which are expected to boost sales in the high-end market segment [6][12] Component and Technology Trends - The article discusses the low valuation of automotive components and the expected growth in the new energy vehicle supply chain [15][16] - It highlights the importance of smart driving technology and the potential for significant growth in this area [15][16]

Investment Rating - The report maintains a positive investment rating for the automotive industry, particularly highlighting opportunities in the passenger vehicle and component sectors [6]. Core Insights - The automotive industry is experiencing a divergence in profitability, with high-quality segments demonstrating resilience amid increasing competition and market pressures [1][2][3]. - The passenger vehicle segment is benefiting from scale effects and a shift towards high-end models, with wholesale sales reaching 7.111 million units in Q2 2025, a year-on-year increase of 13.0% [1]. - The component sector is witnessing sustained revenue growth, particularly in intelligent and lightweight segments, with Q2 2025 revenue at 266.42 billion yuan, up 15.7% year-on-year [2]. - The commercial vehicle sector, especially heavy trucks, is showing signs of recovery, with Q2 2025 wholesale sales of heavy trucks at 274,000 units, a year-on-year increase of 18.3% [3]. - The motorcycle segment is also thriving, with sales of 297,000 units in Q2 2025, reflecting a year-on-year growth of 23.9% [4]. Summary by Sections 1. Industry Overview - The automotive sector's fund holding ratio decreased to 6.25% in Q2 2025, indicating a cautious market outlook despite strong demand [12][19]. 2. Passenger Vehicles - The passenger vehicle segment is driven by policy support and a focus on high-end models, with significant sales growth in new energy vehicles, which saw a 33.9% increase in wholesale sales year-on-year [1][39]. - The average selling price (ASP) is showing divergence, influenced by the product mix and market positioning [1]. 3. Components - The components sector is experiencing robust revenue growth, with intelligent driving and automotive electronics leading the way, and a gross margin of 18.2% in Q2 2025, up from the previous quarter [2][3]. 4. Commercial Vehicles - Heavy trucks are recovering with a 1.0% year-on-year revenue increase, while buses are benefiting from both domestic and export demand, with a 7.6% increase in wholesale sales [3]. 5. Motorcycles - The motorcycle market is thriving, particularly in the mid-to-large displacement category, with a revenue increase of 20.5% year-on-year in Q2 2025 [4]. 6. Investment Recommendations - The report recommends investing in high-quality autonomous brands such as Geely, XPeng, Li Auto, BYD, and others, as well as key players in the component sector focusing on intelligent driving and new energy vehicle supply chains [5].