Core Viewpoint - Nexteer is expected to achieve solid performance in 2H25, with revenue projected at approximately US$2.3 billion, reflecting a 7% year-over-year increase, driven by strong demand in the US and Europe, favorable foreign exchange conditions, and stable contributions from the Chinese market [1][2] Financial Performance - 2H25 net profit is anticipated to exceed US$70 million, marking a significant sequential increase from 1H25 and demonstrating ongoing profit recovery since 2024 [2] - The full-year 2025 revenue is expected to grow by around 7% year-over-year, supported by robust US pickup sales and favorable FX environment [2][9] - Net profit forecasts for 2025 and 2026 have been raised by 7-10% to US$137 million and US$160 million, respectively, due to stronger profit recovery [1][9] Regulatory Developments - China's new national standard for steering systems, effective July 2026, incorporates Steer-by-Wire (SbW) technology and removes the mandatory mechanical link requirement, facilitating the mass production and adoption of SbW systems [3][10] - This regulatory change is expected to accelerate the transition to higher-level autonomous driving functions and enhance the value content per vehicle [3][10] Technology and Market Position - The shift to SbW technology is projected to increase the average value per vehicle for suppliers, with mass production value for SbW systems estimated to exceed US$400-500 per vehicle, significantly higher than traditional steering systems [4][10] - Nexteer is set to commence mass production of two exclusive high-value SbW programs in 2026, including the Tesla Cybercab and Li Auto's refreshed L9, positioning the company favorably in the market [5][10] New Business Lines - Progress in Rear-Wheel Steering (RWS) is ahead of schedule, with production expected to start in 2026, while Brake-by-Wire commercialization is slightly delayed, with initial production now anticipated in 2027 [6] Shareholding Changes - Beijing E-town Capital has reduced its stake in Nexteer by 41.48 million shares since May 2025, but remains the second-largest shareholder, with the reduction viewed as a routine financial decision rather than a reflection of the company's fundamentals [7][8] Valuation and Market Outlook - The target price for Nexteer has been raised to HK$9.00, based on an 18x 2026E P/E, reflecting improved earnings visibility and the anticipated contributions from the commercialization of SbW technology [1][10] - The share price is currently trading at 14.3x 2026E P/E, which is lower than its historical average and that of local peers in the autonomous driving supply chain [9]

Core Insights - Li Auto Inc. is gaining attention as a value play in the electric vehicle market, competing with giants like Tesla [1] - The company has recently entered the top 10th percentile of value-ranked stocks, indicating strong fundamentals despite a global EV slowdown [2] Company Fundamentals - Li Auto's value ranking has improved from 89.48 percentile to 90.78, reflecting growing investor confidence in its undervalued assets [2] - The company's business model is validated by consistent revenue growth and an expanding delivery network across China [3] - Earnings per share have increased by 25% year-over-year, driven by successful models like the L9 and L7, which cater to affluent buyers [4] Market Performance - Li Auto's market capitalization is approximately $20.762 billion, with a forward P/E ratio of 15.291, significantly lower than Tesla's 188.679 [4] - The stock closed at $20.85 per share, up 1.76% on Friday, and saw a 29% rise in premarket trading on Monday [6] - Year-to-date, the stock is down 13.20%, and down 15.42% over the past year [6] Additional Rankings - The company's momentum score is 15.46, indicating short-term price consolidation, while its growth score is at 53.47 percentile, showing sustained earnings and revenue expansion [5]

Core Viewpoint - Analysts do not expect Nio to achieve profitability for several years, raising questions about the attractiveness of its stock despite recent price increases driven by positive analyst sentiment [1][5][6] Group 1: Stock Performance - Nio's shares rose by 5.6% on Friday, following a 6% gain on Thursday, indicating positive market sentiment [1] - The stock's performance is attributed to a favorable note from Morgan Stanley, which reiterated an overweight rating on Nio [1][3] Group 2: Product Offering - Morgan Stanley analyst Tim Hsiao praised Nio's new Onvo L90, a full-size, all-electric, three-row crossover SUV with a range of up to 375 miles [3] - The presale prices for the Onvo L90 are expected to be between 270,000 yuan and 280,000 yuan (approximately $37,600 to $39,000) [3] - Nio's Onvo brand is positioned similarly to Hyundai's Kia, offering competitive specifications at a lower price point compared to luxury models [4] Group 3: Financial Performance - Nio's revenue growth has slowed significantly, with only a 15% increase last year after tripling revenues from 2020 to 2023 [6] - The company is currently facing annual losses of approximately $3.3 billion, with analysts projecting that Nio may not achieve profitability before 2028 [6]