Group 1 - The core viewpoint of the report indicates that GAC Group's Q1 performance fell short of expectations, with joint venture brand sales continuing to decline, presenting short-term challenges [1] - GAC Group's Q1 2025 revenue decreased to 19.88 billion RMB, down 7.8% year-on-year and 39.8% quarter-on-quarter, with a net loss of 730 million RMB due to weak automotive demand, intensified market competition, increased promotional costs, and reduced government subsidies [1][2] - The report highlights that GAC's new vehicle deliveries dropped to 371,000 units, a 9.4% year-on-year decline, significantly lagging behind the industry growth rate of 11% [2] Group 2 - The report notes that GAC Group's sales performance is declining despite industry stimulus policies, with specific brands like Trumpchi and Aion seeing sales drop by 19% and 4% respectively [2] - GAC Group is pursuing a dual-track strategy: launching affordable models under the Trumpchi and Aion brands for the mass market, while developing a luxury brand in collaboration with Huawei for the high-end market [2] - The effectiveness of GAC's ongoing transformation remains uncertain, as the company still relies heavily on joint venture brands like Toyota and Honda, which are lagging in the electrification transition compared to local competitors [2]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [1][9]. Core Views - The company's performance is under pressure during the transformation period, awaiting recovery in autonomous profitability [2]. - The company reported a revenue of 107.78 billion yuan for 2024, a year-on-year decrease of 17.1%, and a net profit attributable to shareholders of 0.82 billion yuan, down 81.4% year-on-year [4][5]. Summary by Sections Recent Performance - The company's stock performance over the last year shows a decline of 3.0% over one month, 9.2% over three months, and 2.1% over twelve months, compared to the CSI 300 index [3]. - The current stock price is 8.48 yuan, with a 52-week price range of 7.07 to 10.84 yuan [3]. Sales and Profitability - In 2024, the company's overall sales were under pressure, with self-owned brands performing better than joint ventures. The self-owned brand sales reached 790,000 units, a decrease of 10.9% year-on-year, accounting for 39.4% of total sales [5]. - The joint venture brands saw significant declines, with GAC Honda and GAC Toyota sales down 26.5% and 22.3% respectively [5]. - The total revenue for 2024 was 107.78 billion yuan, with a gross margin of 2.2%, down 0.5 percentage points year-on-year due to intensified market competition [5]. Strategic Initiatives - The company is advancing its smart and international strategies, including a partnership with Huawei to establish a new brand targeting high-end customers, and a significant increase in overseas sales, which reached 127,000 units, up 67.6% year-on-year [5]. - The company is also exploring new technologies, launching a new flying car brand and humanoid robots [5]. Financial Forecast - The company is expected to achieve revenues of 143.2 billion yuan, 165.1 billion yuan, and 179.8 billion yuan from 2025 to 2027, with year-on-year growth rates of 33%, 15%, and 9% respectively [8]. - The net profit attributable to shareholders is projected to be 1.78 billion yuan, 3.06 billion yuan, and 4.85 billion yuan for the same period, with growth rates of 116%, 72%, and 59% respectively [8].