Investment Rating - The automotive industry is rated as "Outperform" [4][5] Core Views - The industry is entering the mid-year performance reporting period, with a focus on the 2025 World Robot Conference. The July car market is expected to grow primarily due to the "trade-in and scrapping" policies, with retail sales of narrow passenger cars projected at approximately 1.85 million units, a year-on-year increase of 7.6% [1][3] - The long-term outlook emphasizes the rise of domestic brands and opportunities in incremental components driven by electric and intelligent trends. In the short term, the strong new product cycle of Huawei and the first year of the Xiaomi automotive industry chain are highlighted [3][12] Monthly Production and Sales Data - In July, the narrow passenger car retail market is expected to reach around 1.85 million units, with a year-on-year growth of 7.6% and a month-on-month decline of 11.2%. New energy vehicle retail is estimated at about 1.01 million units, with a penetration rate expected to rise to 54.6% [1] - Weekly data shows that from July 1 to 27, retail sales of passenger cars reached 1.445 million units, a year-on-year increase of 9% but a month-on-month decline of 19% [1] Weekly Market Performance - For the week of July 28 to August 1, the CS automotive index fell by 2.26%, with the CS passenger vehicle index down by 2.73%. The CS electric vehicle index decreased by 5.01%, while the overall Shanghai Composite Index fell by 1.38% [2] Key Company Earnings Forecast and Investment Ratings - Key companies such as Leap Motor, Geely, and JAC are rated as "Outperform" with respective earnings per share (EPS) forecasts for 2025 and 2026 indicating growth potential [4] - Leap Motor (9863.HK) is expected to have an EPS of -0.05 in 2025, while Geely (0175.HK) is projected to have an EPS of 1.36 [4] Investment Recommendations - The report recommends focusing on domestic brands and the opportunities in incremental components, particularly in the context of electric and intelligent vehicles. Specific recommendations include: - Vehicle manufacturers: Leap Motor, JAC, Geely - Intelligent technology: Kobot, Huayang Group, Junsheng Electronics - Robotics: Top Group, Sanhua Intelligent Control, Shuanghuan Transmission - Domestic alternatives: Xingyu Co., Fuyao Glass, Jifeng Co., New Spring Co., Horizon Robotics-W [3][12][24] Industry Long-term Outlook - The Chinese automotive industry is transitioning from a growth phase to a mature phase, with a projected annual compound growth rate of 2% over the next 20 years. The report anticipates that new energy vehicle sales will continue to grow significantly, with projections of 1.55 million units in 2025, representing a year-on-year increase of over 25% [13][24]

Core Viewpoint - The automotive market in July continues to grow primarily due to the "trade-in" and scrapping policies, with a projected retail market of approximately 1.85 million vehicles, a year-on-year increase of 7.6% but a month-on-month decrease of 11.2%. The retail of new energy vehicles is expected to reach around 1.01 million, with a penetration rate of 54.6% [2] Monthly Sales Data - The narrow passenger car retail market in July is estimated at about 1.85 million units, reflecting a year-on-year growth of 7.6% and a month-on-month decline of 11.2%. New energy vehicle retail is projected at approximately 1.01 million units, with a penetration rate expected to rise to 54.6% [2] - From July 1 to July 27, the national passenger car retail reached 1.445 million units, a year-on-year increase of 9% but a month-on-month decrease of 19%. The wholesale of passenger cars was 1.505 million units, up 17% year-on-year but down 25% month-on-month [2] Weekly Market Performance - In the week of July 28 to August 1, the CS automotive index fell by 2.26%, with the CS passenger vehicle index down 2.73%. The CS commercial vehicle index decreased by 1.28%, and the CS automotive parts index fell by 2.12%. The electric vehicle sector saw a decline of 5.01% [2] Cost Tracking and Inventory - As of July 31, 2025, the prices of float glass, aluminum ingots, and zinc ingots changed by -14.2%, +8.5%, and -8.5% year-on-year, respectively. The automotive dealer inventory warning index stood at 57.2%, down 2.2 percentage points year-on-year but up 0.6 percentage points month-on-month [3] Market Focus - The focus areas include advancements in autonomous driving, with regions like Guangzhou and Shandong accelerating the development of autonomous driving guidelines. The upcoming 2025 World Robot Conference is also a point of interest, with over 100 new products expected to be unveiled [3] - New models to watch include the recently launched Li Auto i8, Xiaomi Yu7, and others, with attention on their subsequent order volumes [3] Company Updates - Xiaomi's vehicle deliveries exceeded 30,000 units in July, marking a cumulative total of over 300,000 units delivered since its launch [4] - Nissan China and Dongfeng Group have established a new joint venture focused on exporting vehicles and parts [5] - The AITO M8 pure electric version saw over 15,000 pre-orders within 72 hours of its launch [6] - Deep Blue Automotive launched the S05 model with a 620 km range and plans to introduce 30 models over the next five years [7] - The Li Auto i8 was launched with a price range of 321,800 to 369,800 yuan [8] Industry News - The 2025 World Robot Conference is set to showcase over 1,500 exhibits from more than 200 companies, with a 25% increase in participating companies compared to last year [3] Mid-Year Performance Reports - Several companies reported significant profit growth for the first half of 2025, including Ninebot with a net profit increase of 108.45% year-on-year [17][18]

Investment Rating - The automotive industry is rated as "Outperform the Market" [1][5][4] Core Viewpoints - The industry is entering the mid-year performance period, with a focus on the 2025 World Robot Conference. The July car market is expected to grow primarily due to the "trade-in and scrapping" policies, with an estimated retail market of 1.85 million narrow passenger cars, a year-on-year increase of 7.6% [1][3] - The long-term outlook emphasizes the rise of domestic brands and opportunities in incremental components driven by electric and intelligent trends. In the short term, the strong new product cycle of Huawei and the first year of the Xiaomi automotive industry chain are highlighted [3][12] - The report suggests that under the geopolitical backdrop, the automotive sector as a domestic consumption product is likely to see increased stimulus policies, favoring passenger cars and domestically replaced components [3][12] Monthly Production and Sales Data - In July, the narrow passenger car retail market is projected to be around 1.85 million units, with a year-on-year growth of 7.6% and a month-on-month decline of 11.2%. New energy vehicle retail is expected to be approximately 1.01 million units, with a penetration rate of 54.6% [1][22] - Weekly data indicates that from July 1 to 27, the national passenger car retail reached 1.445 million units, a year-on-year increase of 9% but a month-on-month decline of 19% [1][2] Weekly Market Performance - For the week of July 28 to August 1, the CS automotive index fell by 2.26%, with the CS passenger car index down by 2.73%. The CS electric vehicle sector saw a decline of 5.01% [2][3] - The CS automotive sector outperformed the CSI 300 index by 0.08 percentage points but underperformed the Shanghai Composite Index by 0.88 percentage points, with a year-to-date increase of 10.97% [2][3] Key Company Earnings Forecast and Investment Ratings - Key companies such as Leap Motor, Geely, and JAC are rated as "Outperform the Market" with varying earnings per share (EPS) forecasts for 2025 and 2026 [4][5] - Leap Motor is expected to have an EPS of -0.05 in 2025, while Geely is projected to have an EPS of 1.36 [4][5] Investment Recommendations - The report recommends focusing on the rise of domestic brands and opportunities in incremental components, particularly in electric and intelligent sectors. Specific recommendations include: - Vehicle manufacturers: Leap Motor, JAC, Geely - Intelligent technology: Kobot, Huayang Group, Junsheng Electronics - Robotics: Top Group, Sanhua Intelligent Control, Shuanghuan Transmission - Domestic replacements: Xingyu Co., Fuyao Glass, Jifeng Co., New Spring Co., Horizon Robotics [3][12][24]

Company Overview - Deep Blue Automotive officially launched the S05 620km long-range version on August 1, with three configurations priced between 129,900 and 149,900 yuan, offering up to 49,760 yuan in purchase incentives [2] - The S05 aims to compete in the 150,000 yuan pure electric SUV market, boasting a significant advantage with a 620km CLTC range and 3C supercharging technology, allowing for a 15-minute charge from 30% to 80% [2] - The vehicle features high safety standards, including CATL battery cells and a robust body structure made of 78% high-strength steel and aluminum, achieving a torsional rigidity of 35,000 N·m/deg [2] Industry Context - The 100,000 to 150,000 yuan market segment is highly competitive, with traditional fuel vehicles and electric vehicles sharing a market ratio of 70:30 [4] - Deep Blue Automotive has sold over 500,000 units and needs to strengthen its market position, particularly in the long-range segment, where competitors like Leap Motor are also launching models with over 600km range [4] - The launch of the 620km version fills a gap in the long-range market under 150,000 yuan and complements Deep Blue's range of extended-range vehicles [4] Strategic Initiatives - The S05 620km long-range version is a strategic move under the newly established China Changan Automobile Group, marking Deep Blue's first new model in this framework [4] - Deep Blue is positioned as a core engine for global expansion, with plans to enter over 100 countries by the end of the year, addressing the global demand for long-range and high-safety vehicles [5] - The launch aligns with Deep Blue's "Smart Leadership 2030" strategy, which includes over 100 billion yuan in R&D investment and aims to introduce 30 new models by 2030, with overseas sales expected to account for 35% of total sales [5]

Core Insights - The establishment of China Chang'an Automobile Group marks a significant strategic adjustment in China's automotive industry, with the new entity becoming the 100th member of the central enterprise sequence [1] - Deep Blue Automobile, as a core brand under the new central enterprise, is positioned to drive technological breakthroughs and industrial upgrades, contributing to China's goal of technological self-reliance [1][3] New Central Enterprise Mission - China Chang'an Automobile Group is tasked with promoting technological innovation and facilitating industrial upgrades amid the global trends of electrification and intelligence [3] - Deep Blue Automobile has shown strong market performance and R&D capabilities, ranking among the top central enterprise brands in cumulative sales from December 2022 to March 2025, with a 71% year-on-year increase in delivery volume in the first half of 2025 [3][5] Value Creation by Deep Blue Automobile - Deep Blue Automobile supports the high-quality development of the new central enterprise through three main values: continuous development, technological R&D, and international expansion [5] - The company has established a comprehensive R&D and manufacturing system for new energy vehicles and actively engages in social responsibility initiatives [5] - Deep Blue's proprietary "super range extension" technology enhances user experience, while its collaboration with Huawei on the Qian Kun ADS SE intelligent driving system showcases its commitment to innovation [5] Product and Technology Development - The first new model post-establishment, the Deep Blue S05 620km long-range version, is set to launch on August 1, 2025, featuring advanced charging technology [8] - Deep Blue plans to introduce 30 new models over the next five years, focusing on various market segments [8] - The company aims to enhance its service experience by optimizing its sales and service network, with a goal of expanding to 2,800 global service points by 2030 [8] Global Expansion Strategy - Deep Blue Automobile has established a long-term partnership with Star Semiconductor to advance power semiconductor technology, with ongoing developments in IGBT and SiC technologies [9] - The company has a systematic global market strategy, targeting Southeast Asia, Europe, Eurasia, the Middle East, and Latin America, with plans to cover approximately 90 countries by 2025 [9] - A dual-power strategy (BEV and XEV) will be employed to cater to regional market demands, with a goal of achieving 380,000 overseas sales by 2030 [9] Future Development Focus - Deep Blue Automobile will continue to leverage its role within the new central enterprise, focusing on R&D, product layout, service quality enhancement, and international market expansion [10]

Core Insights - China Changan Automobile Group aims to achieve a production and sales target of 5 million vehicles by 2030, with over 60% of sales coming from new energy vehicles and over 30% from overseas markets [1] - The company plans to launch over 50 new energy products globally in the next five years, including more than 7 major global models with sales exceeding 300,000 units [1] - An investment of over 200 billion yuan is planned in the new automotive sector over the next decade, along with the establishment of a technology innovation team of over 10,000 members [1] Company Strategy - The company will accelerate three strategic plans: "Shangri-La," "Beidou Tianshu," and "Haina Baichuan" [1] - Deep Blue Automotive, a subsidiary, is set to release the Deep Blue S05620km long-range version on August 1, with plans for overseas exports [2] - Deep Blue Automotive has achieved cumulative sales of over 500,000 units, becoming the leading new energy vehicle seller among state-owned enterprises [2] Financial Performance - In the first half of the year, China Changan Automobile Group reported a total revenue of 146.9 billion yuan, with vehicle production and sales reaching 1.355 million units, marking the highest level in nearly eight years [2] - New energy vehicle sales reached 452,000 units, a year-on-year increase of 49.1%, while overseas sales were 299,000 units, up 5.1% year-on-year [2] - The annual target for total vehicle sales is set at 3 million units, with new energy vehicle sales expected to reach 1 million units and an estimated annual revenue of 355 billion yuan [2]

Core Insights - China Chang'an Automobile Group aims to achieve a production and sales target of 5 million vehicles by 2030, introducing a new strategic framework called the "Five New Chang'an" [1][3] - The company is advancing three strategic plans: "Shangri-La," "Beidou Tianshu," and "Haina Baichuan," focusing on product, technology, service, and global expansion [1][3] Product Development - Deep Blue Automotive, a subsidiary, will launch its first product, the Deep Blue S05 620km long-range version, on August 1, along with the Deep Blue L06, which features the world's first 3nm automotive-grade chip [7][10] - The company plans to release a new vehicle every two weeks for two months, targeting sales of 180,000 to 200,000 units in the second half of the year [7][10] - Over the next five years, Deep Blue Automotive aims to introduce 30 mainstream and differentiated models to meet diverse consumer needs [7][10] Technological Advancements - Deep Blue Automotive plans to release a fire-resistant battery for collisions at 120 km/h and the most integrated and efficient electric drive system next year [10] - The company will implement full-scene NOA for intelligent driving assistance and develop an AI-driven cockpit system with the highest global computing power [10] Market Expansion - Deep Blue Automotive has achieved cumulative sales of over 500,000 units, becoming the leading new energy vehicle brand among state-owned enterprises, with a year-on-year delivery increase of 71% in the first half of the year [10] - The company is expanding into international markets, with models like the S07, L07, S05, G318, and S09 entering Southeast Asia, the Middle East, Africa, Central and South America, and Europe, covering 66 countries and regions [10][11] - The target for overseas sales contribution is set to reach 1/3 to 1/2 of total sales, with a goal of 56,000 units globally this year and 380,000 units by 2030 [11]