Core Viewpoint - The Mercedes-Benz Group is facing significant challenges, with a 69% drop in net profit and declining sales, particularly in the Chinese market, indicating a potential long-term downturn in the luxury automotive sector [1][2][5]. Financial Performance - In Q2, the net profit of the Mercedes-Benz Group fell by 69% to €9.57 billion, significantly below market expectations of €12.9 billion [2]. - Revenue for Q2 was €33.15 billion, down 9.8% year-on-year, while EBIT fell by 68.56% to €1.27 billion [2][3]. - The adjusted EBIT for the automotive business decreased by 56% to €1.23 billion, with automotive sales down 9% to 453,700 units [3]. Sales and Market Trends - Mercedes-Benz's automotive sales in China dropped by 19% to 140,400 units, contributing to an overall decline in sales [1][3]. - In contrast, Chinese brand passenger cars saw a 25% increase in sales, capturing 68.5% of the market share [1]. - The company reported a 24% decrease in electric vehicle sales, while plug-in hybrid vehicle deliveries increased by 34% [3]. Future Outlook - The company anticipates a significant decline in annual revenue due to tariffs impacting car and truck sales, projecting that 2025's sales will be substantially lower than last year [5][6]. - The profit margin for the automotive business is expected to be between 4% and 6%, influenced by tariffs amounting to approximately $420 million [6]. - The company is implementing a performance plan that includes layoffs and shifting production to lower-cost countries to enhance competitiveness [9]. Market Conditions - The automotive market in Europe and globally is expected to remain at last year's levels, with slight declines anticipated in the U.S. market and a modest increase in China [10]. - The recent U.S.-EU trade agreement, which reduces tariffs on European cars, may benefit the Mercedes-Benz Group, as it exports a significant portion of its vehicles from Europe to the U.S. [8].

Core Viewpoint - Despite a significant decline in the Hong Kong stock market, some low-priced stocks experienced substantial gains, indicating potential investment opportunities amidst market volatility [1][3]. Group 1: Market Performance - On March 21, the Hong Kong stock market saw major indices decline, with the Hang Seng Index dropping by 2.19% and the Hang Seng Tech Index falling by 3.37% [1]. - Notably, low-priced stocks such as New Yaohai surged, with a peak increase of 162.5% during the trading session [3][5]. Group 2: Company Analysis - New Yaohai, primarily engaged in luxury car distribution, reported a significant revenue decline of 39.66% year-on-year, with a net loss of 563 million HKD for the first half of the fiscal year ending September 30, 2024 [4]. - The company's luxury car sales, including brands like Lamborghini and Bentley, also saw substantial decreases, with Lamborghini sales down by 25.2% and Bentley sales down by 36.2% [4]. Group 3: Analyst Upgrades - Foreign institutions are actively raising target prices for several Chinese assets, including Tencent, China Mobile, and others, indicating a positive outlook for these companies [8][10]. - Nomura upgraded Tencent's target price from 500 HKD to 648 HKD, citing strong performance in gaming and advertising sectors [9]. - UBS raised China Mobile's target price by 14% to 103 HKD, projecting a compound annual growth rate of 5% for net profit from 2024 to 2027 [10].