Group 1 - The 48th World Skills Competition is set to take place in Shanghai, with a countdown event held on September 22, marking one year until the competition [1] - SAIC Motor Corporation, as a national strategic sponsor, has delivered the first batch of official vehicles for the competition, showcasing its commitment to supporting the event [1][4] - The competition will feature 64 events across six major fields, including logistics, construction, manufacturing, information technology, creative arts, and personal services, representing a wide range of vocational skills [3] Group 2 - Since 2013, SAIC has continuously sponsored and supported the Chinese delegation in preparation for the World Skills Competition, contributing to the development of skilled talent in the automotive industry [4] - SAIC has built a skilled workforce of over 80,000 employees, with approximately 30,000 high-skilled talents, representing over 35% of its workforce [4] - The company has received numerous accolades, including 16 employees awarded the China Skills Award and 83 recognized as technical experts at the national and Shanghai levels [4]

Investment Rating - The report upgrades the investment rating for the company to "Buy" [1] Core Insights - The company is expected to stabilize and recover in 2025 after a year of significant adjustments in 2024, focusing on self-owned brands and joint ventures [8] - The collaboration with Huawei on the "尚界" brand is anticipated to enhance sales and profitability, particularly in the mainstream market segment [8] - The company aims to achieve total revenue of 693 billion, 778.8 billion, and 841.1 billion yuan from 2025 to 2027, with net profits of 12.51 billion, 15.11 billion, and 18.19 billion yuan respectively, corresponding to P/E ratios of 17.5, 14.5, and 12.0 [8] Summary by Sections 1. 2024: Management Reform and Inventory Reduction - The company underwent significant management changes with a new chairman and president, focusing on inventory reduction and restructuring [10][11] - In 2024, the company achieved a wholesale volume of 205.3 million vehicles, a year-on-year increase of 12.4%, with self-owned brand sales reaching 130.4 million vehicles, up 21.1% [8] - The company successfully reduced inventory levels, with terminal deliveries exceeding wholesale sales, indicating improved market responsiveness [24] 2. 2025: Self-Improvement and Joint Venture Stabilization - The self-owned brand segment is expected to drive sales growth, with a target of over 290 million units sold in 2025, representing a year-on-year increase of over 20% [44] - The joint venture with Volkswagen is showing signs of stabilization, with a projected increase in sales volume in 2025 [62] - The "尚界" brand, positioned in the 200,000 yuan market, is expected to become a significant contributor to sales and profitability [68] 3. Financial Projections - The company forecasts total revenue of 627.59 billion yuan in 2024, with a significant recovery in subsequent years [9] - The net profit is projected to rebound sharply from a loss of 1.67 billion yuan in 2024 to a profit of 12.51 billion yuan in 2025 [9] - The company aims for a return on equity (ROE) to improve from 1% in 2024 to 6% by 2027 [9] 4. Strategic Focus on Mainstream Market - The "尚界" brand is set to launch its first SUV model, H5, with a competitive pricing strategy aimed at capturing market share in the mainstream segment [76] - The collaboration with Huawei is expected to enhance product offerings and market penetration, leveraging Huawei's technology and distribution channels [76] - The company plans to introduce over ten new models in the coming year, focusing on both domestic and international markets [45]

Core Viewpoint - The launch of the new IM L6 model by Zhiji Auto aims to capture the mainstream market priced between 204,900 to 264,900 yuan, but its ability to reverse the declining sales trend remains uncertain [1][5]. Sales Performance - Zhiji Auto reported a delivery of 4,366 vehicles in April, a year-on-year increase of 55%, but the actual sales figure from SAIC Group indicated only 3,326 vehicles sold [2]. - Cumulative sales from January to April 2025 reached 10,361 vehicles, down 20.31% compared to 13,001 vehicles in the same period of 2024 [2][5]. - In February 2025, Zhiji Auto's sales were only 1,135 vehicles, reflecting a significant year-on-year decline of 43.25% [4]. Strategic Goals - The company aims to achieve a target of 100,000 vehicle deliveries by the end of 2025, but current sales figures indicate a substantial gap from this goal [5]. - Zhiji Auto is positioned as SAIC Group's high-end brand and is considered a key player in the group's strategy for transitioning to new energy vehicles [5]. Financial Performance - SAIC Group's overall revenue for 2024 was reported at 627.59 billion yuan, a decrease of 15.73% year-on-year, with a net profit drop of 88% [6]. Competitive Landscape - The automotive market is becoming increasingly competitive, with new entrants like Huawei's "Shangjie" brand, which is expected to launch its first vehicle in the fall of this year [7]. - Analysts suggest that Zhiji Auto faces the risk of being eliminated from the market due to its underperformance and the increasing competition from new brands [7].

Core Viewpoint - The recent controversies surrounding the wind resistance coefficients of electric vehicles (EVs) highlight the industry's obsession with technical parameters, which have shifted from being a tool for enhancing range to a symbol of brand "technological strength" [2][4][6]. Group 1: Industry Trends - The wind resistance coefficient has become a focal point in the EV industry, with companies like Tesla setting benchmarks that others strive to surpass, leading to a competitive environment where every 0.01Cd reduction is seen as a significant achievement [4][6]. - The lack of stringent national standards in China allows manufacturers to exploit testing conditions, often leading to misleading representations of vehicle performance [4][5]. - The pursuit of lower wind resistance has led to a phenomenon where companies prioritize testing standards over genuine improvements in aerodynamic performance, potentially stifling true innovation in the industry [5][6]. Group 2: Consumer Impact - Misleading marketing practices regarding wind resistance can confuse consumers, leading them to believe that advertised performance aligns with real-world capabilities, which can affect purchasing decisions [5][6]. - The focus on wind resistance has created a disconnect between consumer preferences and vehicle design, with many consumers favoring traditional designs over the increasingly popular aerodynamic shapes [7][8]. Group 3: Design and Innovation - The obsession with achieving lower wind resistance has led to design choices that may compromise user experience, such as reducing cabin space or eliminating practical features [6][8]. - Successful examples in the industry demonstrate that it is possible to balance aesthetics, functionality, and efficiency without solely focusing on wind resistance metrics [7][8].

Core Viewpoint - The financial performance of listed automotive companies in May shows a divergence, with 7 out of 13 companies reporting positive net profit growth, while 6 experienced declines or increased losses. The standout performer is Seres, with a net profit increase of 342.7%, while SAIC Group faced a significant decline of 88.2% in net profit, marking its largest annual drop since its listing in 1997 [1][2]. Group 1: Financial Performance - Among the 13 listed automotive companies, BYD reported a total revenue of 77.71 billion yuan, with a revenue growth rate of 29.0% and a net profit of 4.025 billion yuan, reflecting a 34.0% increase [2]. - SAIC Group's total revenue was 62.27 billion yuan, down 15.7%, with a net profit of 0.167 billion yuan, a staggering decline of 88.2% [2][4]. - Geely Automobile achieved a revenue of 24.02 billion yuan, with a growth rate of 34.0%, and a net profit of 1.663 billion yuan, marking a significant increase of 213.3% [2]. Group 2: SAIC Group's Challenges - SAIC Group's net profit decline of 88.19% in 2024 is the largest annual drop in its 27-year history, with a non-recurring net profit of -5.409 billion yuan, also a historical record for losses [4][3]. - The poor performance is attributed to a significant drop in sales across both its independent and joint venture segments, with total vehicle wholesale sales down 20.1% to 4.013 million units [7][8]. - SAIC General's new car sales plummeted by 56.54% to 435,000 units, heavily impacting the overall performance of SAIC Group [7]. Group 3: Market Dynamics - In the first quarter of 2024, SAIC Group's net profit showed a slight recovery to 3.023 billion yuan, a year-on-year increase of 11.4%, but revenue continued to decline [9]. - The average selling price per vehicle dropped by 13%, indicating pressure from industry price wars, while the gross margin fell to 9.38%, down 0.81 percentage points year-on-year [9]. - The sales of SAIC's new energy vehicles grew by only 9.9%, significantly below the industry average growth rate of 40.2% [9][10].

Core Viewpoint - SAIC Group is shifting focus to the new "Shangjie" brand in collaboration with Huawei, raising concerns about the future of its high-end brand, Zhiji Auto, which has been underperforming in sales [2][5][14]. Group 1: Performance and Sales - SAIC Group's sales are projected to drop by 20% in 2024, with net profit expected to decline by 87% to 90% [2][14]. - Zhiji Auto's sales in March were only 3,100 units, reflecting a year-on-year decline of 29.66% for the first quarter [10][11]. - The cumulative sales for Zhiji Auto in 2022 were only 5,000 units, and in 2023, it sold 38,253 units, falling short of its targets [8][9]. Group 2: Brand Strategy and Competition - The launch of the Shangjie brand may create competition with Zhiji Auto, as both brands target the high-end electric vehicle market [7][14]. - SAIC Group has invested 6 billion yuan in the Shangjie brand, with a dedicated team of 5,000 people and a specialized factory [3][5]. - The CEO of Zhiji Auto emphasized that it remains the group's top project and high-end brand, despite the new focus on Shangjie [6][9]. Group 3: Market Response and Future Outlook - Consumers are expressing confusion and concern over the dual branding strategy, questioning the future of Zhiji Auto in light of Shangjie's launch [6][14]. - Analysts suggest that if Zhiji Auto does not improve its market performance, it may face consolidation or restructuring, similar to the fate of the previously launched Feifan brand [11][12][13]. - The introduction of the "IM AIOS ecological cockpit" by Zhiji Auto, which includes an "AI takeaway" feature, has been met with skepticism from consumers [11].