DOCSLIB.ORG

New-Energy Vehicles: Unfolding in China J.D

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text

Load more

New-Energy Vehicles: Unfolding in China J.D. Power China “Mobility Disruptors” Survey Series March 2018 1 OVERVIEW Propelled by growing public concerns Meanwhile, the new-energy vehicle about the environment and incentive market is increasing competitive. Not only policies, the enthusiasm among international brands but also Chinese consumers in China for new-energy domestic brands are racing to roll out vehicles (mainly electric cars) has been NEVs models. Consumers’ high steadily increasing and the NEVs market expectations for new-energy vehicles, is booming. especially battery technology, will likely drive manufacturers to enhance research In 2017 in China, more than 770,000 and development efforts for technology new-energy vehicles were sold, a advancement and breakthroughs. whopping 53% year-over-year increase, representing a compelling growth rate The online survey, which was designed particularly considering that overall and conducted by J.D. Power in January passenger vehicle sales only grew 1.4%. 2018 to understand Chinese customers’ perception and desire for new-energy However, to what extent Chinese vehicles, has a total of 2,212 respondents customer’s enthusiasm and interest in across the country. acquiring new-energy vehicles are solely driven by financial incentives is somewhat challenging to assess. © 2018 J.D. Power. All Rights Reserved. 2 1 Global And Chinese New Energy Vehicles Market In 2017, only 4.2% of new cars sales are NEVs, but in 2027, NEVs will be account for about 35.8% of new car sales globally. China and Europe will be the key players, the other regions (including the U.S.) to grow at a much lower rate. Sales of Hybrid/ EV in China, Europe, US and Other Regions 40,000,000 40.0% 35.8% 35,000,000 32.4% 35.0% 30,000,000 28.5% 30.0% 23.9% 25,000,000 25.0% 20.6% 20,000,000 17.8% 20.0% 14.8% 15,000,000 11.8% 15.0% 10,000,000 8.0% 10.0% 5.3% 4.1% 5,000,000 2.8% 2.9% 3.3% 5.0% 0 0.0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 China US EU Other % of New Car Sales Source: LMC Automotive © 2018 J.D. Power. All Rights Reserved. 3 OEM Strategy Overview BMW Group 15-25% of sales electrified by 2025. Mix of standalone & bespoke BEVs Almost all of the auto giants are engaged in the NEVs game, Daimler Launch more than 10 purely electrically showing their ambitions by unveiling aggressive electrification driven vehicles by 2022, then offer strategies. customers at least one electrified alternative in every Mercedes-Benz model series, over 50 in all. FCA Half of FCA fleet electrified by 2022 Top 10 players by 2024 Ford 13 new electrified vehicles globally in next 5 years 2,500,000 2017 2020 2024 Hyundai-Kia Electrify core models, plus standalone BEVs 2,000,000 JLR New models all hybrid or EV from 2020 1,500,000 PSA Electrify core models, no standalone BEVs 1,000,000 R-N-M New common electrified platforms, 12 hybrid and 8 BEV by 2022 500,000 Toyota Hybrid remains core tech, BEV mass production from 2020 0 Volvo All new models hybrid or EV from 2019, no IC-only by circa 2024 VW At least 1 electrified version of all models by 2030 Source: LMC Automotive Source: News report © 2018 J.D. Power. All Rights Reserved. 4 Over the past three years, China's new-energy vehicle sales The market share of new-energy passenger vehicles (BEV & have been growing rapidly. In the next decade, a steady PHEV) is less than 2% in 2017, but the introduction of the and robust growth, with an annual rate of 40% on average, double integral policy and more limits on car use in tier 2 is expected. and tier 3 cities will accelerate the development of new energy vehicle market. New-energy vehicle sales and China market trend forecast Sales volume in China (passenger vehicles vs. new-energy vehicles) 7,000 100% BEV PHEV BEV Growth PHEV Growth China NEVs China PV 90% 40,000 6,000 87.2% 78.2% 80% 35,000 5,000 68.8% 70% 30,000 60.8% 60% 4,000 57.5% 54.6% 51.1% 50% 25,000 3,000 40% 36.7% 31262 32.9% 29.2% 20,000 2,000 28.2% 29.1% 30.1% 29.1% 30% 25.9% 23.9% Thousand Unit: Unit: Thousand Unit: 19.8% 28.7% 20% 15,000 1,000 15.4% 13.8% 24788 25374 10% 10,000 0 0% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5,000 PHEV 57 73 85 128 206 348 416 524 697 900 1115 312 532 5,053 BEV 134 239 446 611 944 1,487 1,919 2,497 3,224 4,149 4,721 0 BEV Growth 78.2% 87.2% 36.7% 54.6% 57.5% 29.1% 30.1% 29.1% 28.7% 13.8% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 PHEV Growth 28.2% 15.4% 51.1% 60.8% 68.8% 19.8% 25.9% 32.9% 29.2% 23.9% Source: LMC Automotive Source: LMC Automotive © 2018 J.D. Power. All Rights Reserved. 5 2 Purchase Intentions For NEVs By Customers In China Do you agree that "the new energy vehicles will replace IC engine vehicles in the future"? 86.4% Future Perspective on NEV Technologies 19.39 67.00 11.08% 2.53 % % % Nearly 90% of Chinese customers agree that Completely Partially Partially Completely agree agree disagree disagree new energy vehicles will replace internal combustion engine vehicles in the future. © 2018 J.D. Power. All Rights Reserved. 6 Purchase Intention Drops If No Incentives Are Offered 95.2 % of Chinese customers are “very willing” or “slightly willing” to choose a NEV for their next vehicle purchase. However, if there were no subsidies, 29% indicate that they would not select an NEV and 41% would not select an NEV if there were no free license plates. In other words, the sales of NEVs may drop by 30% or 40% if incentives were no longer offered. There is still a gap between such fervor and real demand. % of Unwilling and Slightly Unwilling to buy NEVs under three premises Top four reasons of considering to buy a NEV Environmentally-friendly 75.90% technology/concept 63.30% 4.7% 29.1% 40.9% Fuel economy 60.50% State subsidies In General No Free No Subsidies 42.40% License Plate Free license plate 7 Which type of new energy vehicle are you willing to buy? Sales of PHEV vs. BEV in China Other (e.g. Fuel cell 12,000,000 battery electric vehicles), 4.2% 10,000,000 8,000,000 6,000,000 Battery Electric Vehicles, 24.77% 4,000,000 Plug-in hybrid 2,000,000 electric vehicles, 70.98% 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 BEV PHEV Others Source: LMC Automotive Chinese Customers Prefer PHEVs Although BEVs are expected to be the dominant NEV type in China, the survey shows that customers in China prefer PHEVs. Concern about limited driving range might be the fundamental reason of customer’s choice. © 2018 J.D. Power. All Rights Reserved. 8 NEVs with the following driving ranges on one charge, which are you Consumers Expect A Shorter Charging willing to buy? Time And A Longer Driving Range More than 400KM 15.87% Between 300KM to 400KM 22.56% More than three-fourths (77%) of Chinese consumers prefer Between 200KM to 300KM new-energy vehicles with a driving range on a full charge of 38.29% more than 200 kilometers, while 38% prefer a range of more than 300 kilometers. Between 100KM to 200KM 20.89% About one-third (30%) indicate they prefer a charging time of Less than 100KM 2.40% less than 6 hours and 12% prefer battery changing, which NEVs with the following charging time ranges, which are you willing to takes only a few minutes. buy? Replaceable battery / Battery 11.62% High Expectations Drives changing (usually a few minitues… Technology Advancement Less than 6 hour 29.25% Between 6 hours to 8 hours 27.85% 38% 41% Between 8 hours to 10 hours 22.42% > 300 KM < 6 HOURS More than 10 hours 8.86% © 2018 J.D. Power. All Rights Reserved. 9 Most Favored Brands By Markets Consumers in China prefer NEVs made by Chinese Chinese enthusiasm for domestic brands is reflected in domestic brands, followed by European brands and sales data. In 2017, Chinese brands account for 78% of Japanese ones. the NEVs market share. Market share by brands in China - Top 10 Brand choice by customers in China Domestic Brands: 78% 54.16% Others, 21.8% 25.59% BYD, 23.3% Foton, 2.6% 13.38% GAC Trumpchi, 2.7% 5.06% JMC, 4.9% BJEV, 10.4% 1.31% 0.50% Changan, Zhidou Chinese European Japanese Korean U.S. Other 5.4% Kandi, , 7.8% brands brands brands brands brands 6.0% Roewe, Zotye, 7.5% 7.6% Source: LMC Automotive © 2018 J.D. Power. All Rights Reserved. 10 3 Major Concerns About NEVs Three Barriers To The Popularity Of NEVs. Range anxiety, power performance and the distrust of new energy technologies. Chinese Customers Concerns About NEVs Limited driving range 75.63% Not convenient to use 34.99% High prices 39.78% Reliability of product quality 42.77% Power performance 47.69% Maturity of new energy technologies 46.61% High ownership costs 19.44% Driving safety 21.47% Insufficient/inconvenient after-sales services… 39.10% Driving performance 12.70% Other 1.04% Have no concern and would like to purchase… 0.86% © 2018 J.D.
Recommended publications
  • Pwc China Automobile Industry M&A Review and Outlook

    Pwc China Automobile Industry M&A Review and Outlook

    Epidemic Prevention and Response to COVID-19 in the Automobile Industry Series Issue 2 — PwC China Automobile industry M&A Review and Outlook The epidemic has prompted many practitioners and managers in the industry to re-examine and plan for the medium-and long-term development of auto industry, accelerating industry transformation and upgrade. PwC auto team emphasizes on the following aspect of tax & legal, M&A and telematics system to analyze the related solutions. In this article, we mainly focus on the M&A aspect, hoping to give some inspirational idea to the practitioners in the industry. China’s automobile industry has developed rapidly in the opportunities. Moreover, an increasing number of companies past decade. Benefiting from “bringing in” and “going out” with advanced technology and capital will continue entering policy, both domestic and foreign OEMs have successfully into the market which fuels more M&A activities in the realized high growth through a series of mergers and automobile industry. acquisitions (M&A). Since 2018, the development of China In this article, we will analyze the automobile industry from automobile market has been slowing down, and the “CASE” four aspects: review of China’s auto industry M&A deals, trend has been having impact on OEMs. As new businesses main deal drivers and changes of auto industry, the future models are emerging, it has also led to blurring of M&A trend, and key initiatives in response to market boundaries between industries. Auto companies have been changes. actively using M&A deals to transform the automobile industry. At the beginning of 2020, the coronavirus outbreak severely impacted the supply chain of automobile industry, thus resulted in demands for business restructuring and transformation.
  • Guangzhou Automobile Group

    Guangzhou Automobile Group

    China / Hong Kong Company Guide Guangzhou Automobile Group Version 6 | Bloomberg: 2238 HK Equity | 601238 CH Equity | Reuters: 2238.HK | 601238.SS Refer to important disclosures at the end of this report DBS Group Research . Equity 7 May 2019 Japanese JCEs leading growth H: BUY Last Traded Price (H) ( 7 May 2019):HK$8.14(HSI : 29,363) More clarity on JVs future strategy. Guangzhou Auto (GAC) and its Price Target 12-mth (H):HK$9.60 (17.9% upside) (Prev HK$17.86) Japanese JCE partners have agreed on key priorities to grow the business. The medium-term plans include capacity expansion and new A: HOLD model development (both traditional and new energy vehicles). Last Traded Price (A) ( 7 May 2019):RMB11.61(CSI300 Index : 3,721) Price Target 12-mth (A):RMB11.30 (2.7% downside) (Prev RMB21.71) Another key factor is that both partners have agreed to maintain the current shareholding structure, hence removing uncertainties. The Analyst Rachel MIU+852 36684191 [email protected] Japanese auto brands have gained market share from 15.6% in December 2016 to 19% in February 2019 aided by their product What’s New range, pricing, and proactive business strategy. Despite the tough • More clarity on development of Japanese JCEs, key 1Q19 auto market, GAC’s Japanese JCEs managed to chalk up strong earnings driver in the future volume sales growth and decent profit contributions to the group. • Self-brand going through short-term adjustment and Where we differ? We expect normalisation of Trumpchi sales to have should start to normalise in 2H19 a meaningful impact on earnings, on anticipation of a recovery in • Maintain BUY, TP revised down slightly to HK$9.60 the PV market in 2H19.
  • Chinese Carmakers Slash Sales Targets

    Chinese Carmakers Slash Sales Targets

    16 | MOTORING Monday, March 23, 2020 HONG KONG EDITION | CHINA DAILY Nio bullish about its Short Torque BYD transforms lines business performance to support masks Many companies in China have transformed their businesses to despite coronavirus cater to the rising demand for masks amid the coronavirus epi- demic, and leading new energy By LI FUSHENG vehicle manufacturer BYD has [email protected] joined them. On Feb 17, BYD pro- duced its first batch of masks. Chinese electric car startup We are pleased to Each of its production lines can Nio is confident about its see encouraging make 50,000 masks a day, and in prospects this year despite the total five million masks and coronavirus outbreak, expecting results to date, and 300,000 bottles of disinfectant its gross profit margin to become expect around 35 can be made on a daily basis, positive in the second quarter. making the company one of the “Based on the current trend, percent expense biggest mask manufacturers in we would hope the daily new reduction compared the world. The company plans to order rate to return to the level of expand its production lines to a last December in April,” said to the prior quarter daily capacity of up to 10 million William Li, founder and chair- even under the masks. The masks will also be man of Nio, on an earnings call pressure of the provided to other countries hit last week. hard by the virus, after meeting He expected production, outbreak.” GAC showcases its Aion LX model in Shenzhen, Guangdong province last July.
  • 2020 Annual Results Announcement

    2020 Annual Results Announcement

    Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. GUANGZHOU AUTOMOBILE GROUP CO., LTD. 廣 州 汽 車 集 團 股 份 有 限 公 司 (a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 2238) 2020 ANNUAL RESULTS ANNOUNCEMENT The Board is pleased to announce the audited consolidated results of the Group for the year ended 31 December 2020 together with the comparative figures of the corresponding period ended 31 December 2019. The result has been reviewed by the Audit Committee and the Board of the Company. - 1 - CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended 31 December Note 2020 2019 RMB’000 RMB’000 Revenue 3 63,156,985 59,704,322 Cost of sales (60,860,992) (57,181,363) Gross profit 2,295,993 2,522,959 Selling and distribution costs (3,641,480) (4,553,402) Administrative expenses (3,850,327) (3,589,516) Net impairment losses on financial assets (55,110) (53,831) Interest income 304,233 290,694 Other gains – net 4 1,379,690 2,620,340 Operating loss (3,567,001) (2,762,756) Interest income 127,551 171,565 Finance costs 5 (439,567) (516,481) Share of profit of joint ventures and associates 6 9,570,978 9,399,343 Profit before income tax 5,691,961 6,291,671 Income tax credit 7 355,990
  • China Autos 2020 Outlook – Slow Lane to a Full Recovery

    China Autos 2020 Outlook – Slow Lane to a Full Recovery

    2 December 2019 China EQUITIES China autos Macquarie China auto coverage 2020 outlook – slow lane to a full recovery Name Ticker Price Rating TP +/- Brilliance 1114 HK 8.17 Outperform 10.10 23.6% Dongfeng 489 HK 7.64 Outperform 8.10 6.0% Key points GAC 2238 HK 8.52 Outperform 9.60 12.7% SAIC Motor 600104 CH 23.04 Outperform 31.50 36.7% Cautious outlook for 2020 PV demand, mainly considering weak demand Nexteer 1316 HK 6.66 Outperform 12.15 82.4% from lower-tier cities, increased household leverage and rising CPI. Minth 425 HK 27.30 Outperform 25.80 -5.5% Geely 175 HK 15.08 Neutral 11.20 -25.7% We expect to see further relaxation of the license plate quota in 2020. Yutong Bus 600066 CH 14.31 Neutral 12.70 -11.3% BAIC 1958 HK 4.51 Neutral 4.20 -6.9% Sector preference: higher-end > lower-end > NEVs. Near-term risks on the BYD 1211 HK 38.15 Underperform 20.70 -45.7% downside. OP: Brilliance, DFG, GAC; UP: GWM, BYD, CATL. CATL 300750 CH 87.41 Underperform 60.30 -31.0% Great Wall 2333 HK 6.04 Underperform 3.70 -38.7% Changan-B 200625 CH 3.54 Underperform 3.10 -12.4% Changan-A 000625 CH 8.31 Underperform 3.60 -56.7% Conclusions Note: updated as of 28 November closing prices; Prices are denominated in Rmb for A-share stocks, and HKD for A slow road back to recovery: We lower our 2020 China auto sales by 5% B/H-share stocks.
  • One-Fourth of New-Vehicle Owners in China Choose Domestic Brands for Good Quality Or Performance, J.D

    One-Fourth of New-Vehicle Owners in China Choose Domestic Brands for Good Quality Or Performance, J.D

    One-Fourth of New-Vehicle Owners in China Choose Domestic Brands for Good Quality or Performance, J.D. Power Finds Porsche and GAC Honda Rank Highest among Luxury and Mass Market Brands, Respectively SHANGHAI: 15 Oct. 2020 – Increasing vehicle quality has become one of the driving factors for consumers in China to choose domestic brands, as one in four new-vehicle owners purchase a domestic rather than an international brand due to good quality or performance, according to the J.D. Power 2020 China Initial Quality Study SM (IQS), released today. The study, now in its 21st year, measures initial vehicle quality by examining problems experienced by new- vehicle owners within the first two to six months of ownership. Overall initial quality is determined by problems reported per 100 vehicles (PP100), with a lower number of problems indicating higher quality. According to the 2020 study, the percentage of vehicle owners who agree or strongly agree that the Chinese domestic brands are innovative, reliable, environment-friendly and reputable has increased annually since 2015 by 12%, 9%, 7% and 10%. The percentage of vehicle owners who choose domestic brands because of good quality or performance has increased to 25% this year from 16% in 2015, while the percentage of those who choose domestic brands due to low price has dropped to 6% from 12% in 2015. The study also finds that there is a quality gap between Chinese domestic brands and all other brands in China. Among all automotive brands, Chinese domestic brands (135 PP100) are the only ones that perform below the industry average level (127 PP100).
  • Vehicles in China Are Losing Appeal Among Owners Born After 1990, J.D

    Vehicles in China Are Losing Appeal Among Owners Born After 1990, J.D

    Vehicles in China are Losing Appeal among Owners Born after 1990, J.D. Power Finds Porsche, GAC FCA Jeep and WEY Rank Highest in Respective Segments SHANGHAI: 19 Aug. 2021 – Vehicles in China are gradually losing their attractiveness to young customers, as satisfaction is lowest among new-vehicle owners born after 1990, compared with other age groups, according to the J.D. Power 2021 China Automotive Performance, Execution and Layout (APEAL) Study,SM released today. Specifically, satisfaction among owners born before 1980 is 769 (on a 1,000-point scale), 755 among owners born in the 1980s and only 718 among owners born after 1990. The three categories with the biggest gap in satisfaction scores between post-90s customers and those in the other two groups are vehicle performance, driving comfort and driving feel. As for the specific attributes the study measures, owners born after 1990 are less satisfied with using the navigation system and the usefulness of infotainment system functions. The study, now in its 19th year, examines new-vehicle owners’ assessments of their experience with their new vehicle within the first two to six months of ownership. The data is used extensively by manufacturers to help them design and develop more appealing models. The overall APEAL score for the industry in 2021 is 733, which is one point higher than in 2020. “Customers born after 1990 now account for more than half of owners of internal combustion engine (ICE) vehicles; however, they are the least satisfied and the least excited with their vehicles,” said Jeff Cai, general manager of auto product practice at J.D.
  • GAC Group (2238 HK) – 3Q20 Yield (%) 6.52% 3.52% 3.17% 4.13% 4.93% Performance Update“ – 2 Nov 2020 ROE (%) 14.93% 8.44% 7.25% 9.14% 10.19% 2

    GAC Group (2238 HK) – 3Q20 Yield (%) 6.52% 3.52% 3.17% 4.13% 4.93% Performance Update“ – 2 Nov 2020 ROE (%) 14.93% 8.44% 7.25% 9.14% 10.19% 2

    9 Apr 2021 CMB International Securities | Equity Research | Company Update G AC Group (2238 HK) BUY (Maintain) Bottom -out in 2021E Target Price HK$11.1 (Previous TP HK$12.1) Up/Downside +62.8% GAC Group announced its FY20 full-year results. Top-line rose by 6%YoY to Current Price HK$6.8 RMB63.2bn. NP fell 10%YoY to RMB6.0bn (vs CMBI estimate RMB5.8bn). The Company declared a total dividend of RMB0.18 per share, representing a 31% China Auto Sector payout ratio. We cut our TP to HK$11.1 (based on 12.0x 2021E P/E) with an upside of 62.8% from the initial TP HK$12.1 (based on initial 15.0x 2021E P/E). Jack Bai Reiterate BUY. (852) 3900 0835 [email protected] Core loss (excluding investment income/other income) has narrowed in 2020 and is expected to improve in 2021E. Even though GAC Trumpchi's Stock Data sales volume was down 14% in 2020, the sales structure was improved Mkt Cap (HK$ mn) 113,391 Avg 3 mths t/o (HK$ mn) 405.23 significantly. Specifically, the sales volume of MPV with higher ASP was up 52w High/Low (HK$) 10.08/5.48 25% YoY. As a result, improvement in sales mix leads to ASP rising to Equity share – 2238.HK 3,099 RMB107K in 2020 from RMB97K in 2019. In addition, the revenue of GAC Equity share - 601238.SH 7,252 Source: Wind Aion recorded a 50% growth rate driven by sales volume growth of 43%.
  • Call for Papers the Competition for the Practical Application of ICV Has Already Started in the Global Automotive Industry

    Call for Papers the Competition for the Practical Application of ICV Has Already Started in the Global Automotive Industry

    Call for papers www.cicv.org.cn The competition for the practical application of ICV has already started in the global automotive industry. A sound environment for ICV are taking into shape, as China is embracing a clear trend of multi-industrial coordination and innovation and taking planned steps to make top-level policies and standards. As a national strategy, the development of ICV helps to create opportunities for cross-industrial innovation. In order to promote the development of ICV in China and build a world-class platform for technology exchange, China SAE， Tsinghua University Suzhou Automotive Research Institute and China Intelligent and Connected Vehicles (Beijing) Research Institute Co. Ltd jointly initiated an annual congress “International Congress of Intelligent and Connected Vehicles Technology (CICV)”. It is a world-class technology exchange platform for automotive, IT/Internet, communications and transportation industry. At the same time, as an important sign for policies, leading technologies showcases, and industry integration accelerator, CICV serves as a platform for communication and exchange between enterprises, universities and industrial research institutes and provide references for them. The 6th International Congress of Intelligent and Connected Vehicles Technology (CICV 2019) is to be held in June, 2019. Focusing on ADAS and key technologies of automated driving as well as ICV policies and regulations, CICV 2019 will invite about 80 experts and technical leaders to share new technology results and ideas on hot topics including Environment Perception and, Development and Testing, V2X, AI, Cyber Security, HD Map, Intelligent and Connected Transportation, Co-pilot and HMI. The concurrent activities including technical exhibition, promotional tours for innovative technologies and entrepreneurship programs.
  • China Autos Driving the EV Revolution

    China Autos Driving the EV Revolution

    Building on principles One-Asia Research | August 21, 2020 China Autos Driving the EV revolution Hyunwoo Jin [email protected] This publication was prepared by Mirae Asset Daewoo Co., Ltd. and/or its non-U.S. affiliates (“Mirae Asset Daewoo”). Information and opinions contained herein have been compiled in good faith from sources deemed to be reliable. However, the information has not been independently verified. Mirae Asset Daewoo makes no guarantee, representation, or warranty, express or implied, as to the fairness, accuracy, or completeness of the information and opinions contained in this document. Mirae Asset Daewoo accepts no responsibility or liability whatsoever for any loss arising from the use of this document or its contents or otherwise arising in connection therewith. Information and opin- ions contained herein are subject to change without notice. This document is for informational purposes only. It is not and should not be construed as an offer or solicitation of an offer to purchase or sell any securities or other financial instruments. This document may not be reproduced, further distributed, or published in whole or in part for any purpose. Please see important disclosures & disclaimers in Appendix 1 at the end of this report. August 21, 2020 China Autos CONTENTS Executive summary 3 I. Investment points 5 1. Geely: Strong in-house brands and rising competitiveness in EVs 5 2. BYD and NIO: EV focus 14 3. GAC: Strategic market positioning (mass EVs + premium imported cars) 26 Other industry issues 30 Global company analysis 31 Geely Automobile (175 HK/Buy) 32 BYD (1211 HK/Buy) 51 NIO (NIO US/Buy) 64 Guangzhou Automobile Group (2238 HK/Trading Buy) 76 Mirae Asset Daewoo Research 2 August 21, 2020 China Autos Executive summary The next decade will bring radical changes to the global automotive market.
  • Electrifying the World's Largest New Car Market; Reinstate At

    Electrifying the World's Largest New Car Market; Reinstate At

    August 31, 2016 ACTION Buy BYD Co. (1211.HK) Return Potential: 15% Equity Research Electrifying the world’s largest new car market; reinstate at Buy Source of opportunity Investment Profile Electrification is set to reshape China’s auto market and we expect BYD to Low High lead this trend given its strong product portfolio, vertically integrated model Growth Growth and high OPM vs. peers. A comparative analysis with Tesla shows many Returns * Returns * strategic similarities but BYD’s new energy vehicle business trades at a sizable Multiple Multiple discount, which we see as unjustified given its large cost savings, capacity Volatility Volatility utilization, and front-loaded investment. China’s new energy vehicle market is Percentile 20th 40th 60th 80th 100th poised to deliver c.30% CAGR (vs. 4% for traditional cars) over the next decade. BYD Co. (1211.HK) We have removed the RS designation from BYD. It is on the Buy List with a Asia Pacific Autos & Autoparts Peer Group Average * Returns = Return on Capital For a complete description of the investment 12-m TP of HK$61.93, implying 15% upside. Our scenario analysis, flexing profile measures please refer to the disclosure section of this document. sales volume and margin assumptions, implies a further 30% valuation upside. Catalyst Key data Current Price (HK$) 54.00 1) More cities in China are likely to announce local preferential policies in 12 month price target (HK$) 61.93 Market cap (HK$ mn / US$ mn) 110,705.4 / 14,270.1 the new energy vehicle (NEV) segment once the result of the subsidy fraud Foreign ownership (%) -- probe is announced.
  • 2020 International Forum (TEDA) on Chinese Automotive Industry

    2020 International Forum (TEDA) on Chinese Automotive Industry

    2020 International Forum (TEDA) on Chinese Automotive Industry Development Annual Theme: Double Upgrading of Industry and Consumption Restructuring the New Ecological Layout September 4, 2020 （Offline Meeting) Opening and Cooperation to achieve Win-win in Future: Development Environment for High-level Autonomous Driving and International Coordination Background: At present, the mass production of low-level autonomous driving vehicles has started. The development of high-level self-driving vehicles is still in the initial stage due to the impacts of various factors such as laws, regulations, usage environment, and technology maturity etc.. Europe, the United States, and other countries and regions have been relatively active in programming and investing in the field of autonomous driving. The R & D and tests on autonomous vehicles had been carried out earlier; the Framework Documents for Autonomous Driving Vehicles, which was jointly established by China, the European Union, Japan and the United States, had passed the examination of the United Nations in June 2019. It is a solid step in the development of high-level self-driving vehicles. However, G9 Forum (VIP the future development is still highly dependent on the supports of the policy Closed-door Meeting, environment, technology R&D, and the building of infrastructure. Therefore, to for VIP only) carry out international exchanges and cooperation to actively promote the development of autonomous driving and intelligent connection has become an 13:00～15:30 important direction for the sustainable development of the automotive industries in various countries. Form of Meeting: Build a multilateral communication platform for the automotive industry. The host will lead each speaker to gave a speech (about 5 minutes) in turn.