研究报告全文：4Sep2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateChinaMeidongAuto1268HKBUYUpTheworstisoverTargetPriceHK720PreviousTPHK1100UpDownside218UpgradetoBUYMeidongssharepricehasfallen65sinceourdowngradeonCurrentPriceHK5911Apr2023Weareoftheviewthatitsnew-cargrossmarginprobablyhitbottomChinaAutoSectorin1H23althoughrecoverymaytakeawhilePorschesnew-cargrossmarginappearstorecoverthefastestamongtraditionalluxurybrandsandMeidongcouldbenefitthemostamongitspeersInourviewthecompanymaybuybacksomeSHIJiCFAofitsconvertiblebondstoloweritsdebtsasitdistributedearningsfromits85237618728shijicmbicomhkonshoresubsidiariestooffshoreThatcouldbeapositivecatalystforthesharepriceDOUWenjingCFA852693947511H23earningsmissonnew-carGPMMeidongs1H23revenueandSGAdouwenjingcmbicomhkexpenseswerelargelyinlinewithourpriorforecastwhereasthelargestsurprisecamefromits02new-cargrossmarginvsour22WeattributeGUSijiesuchmisspartiallytothecompanysstrategytosacrificeprofitinordertokeepjasongucmbicomhkahealthybalancesheetWhileitisdifficulttofindabalancebetweenprofitandsurvivalriskduringthedownturnperiodMeidongchoosestoprioritizeitsStockDatasurvivalandbepreparedforpotentialMAopportunitieswithhandyresourcesMktCapHKmn7949whenindustryenvironmentresumesnormalAvg3mthstoHKmn41652wHighLowHK5572150Commissionincomein1H23wasalsobelowourexpectationpartlyduetoitsTotalIssuedSharesmn1345differentaccountingpoliciescomparedwithitspeersExcludingnon-operatingSourceBloombergitemsamortizationimpairmentwithholdingtaxetcadjustednetprofitinShareholdingStructure1H23wasRMB254mnstillaboutRMB100mnlowerthanouradjustedApexSailLimited522estimatesOthers478SourceHKExIndustryheadwindscouldbepricedinasnew-cargrossmarginlikelyhitbottomWeprojectPorschesnew-cargrossmarginatMeidongtowidenSharePerformanceto3in2H23Eand35inFY24EgivenPorschesdecisiontocutsalesAbsoluteRelativetargetinChinaMeidongsnetprofitcouldliftbyaboutRMB80mnwithevery1-mth-306-2221pptincreaseofPorschesnew-cargrossmarginAccordinglyweprojectnet3-mth-405-413profitofRMB300mnfor2H23EandRMB749mnforFY24E6-mth-674-566SourceBloombergWealsoprojectthecompanytoturntothenetcashpositionattheendofFY23Ewithmore-than-enoughcashtorepayitsconvertiblebondsin202512-mthPricePerformanceHK1268HKHSIrebasedValuationKeyrisksOurnewtargetpriceofHK720cutfromHK1100250isbasedon12xpreviously13xourrevisedFY24EEPSasthevaluation200premiumfromitsmanagementcouldnarrowduringtoughtimesKeyriskstoourratingandtargetpriceincludelowersalesandormarginsthanour150expectationaswellasasectorde-rating100EarningsSummary50YE31DecFY21AFY22AFY23EFY24EFY25E002022-092022-122023-032023-06RevenueRMBmn2357728655288592893430704SourceBloombergYoYgrowth3619194189120NetincomeRMBmn1166521339749974AuditorKPMGEPSRMB092041025055071YoYgrowth5535533491207301RelatedReportsPEx5112821910077ChinaMeidongAuto-1H23ENPtofallPBx151613121123YoYMixedpictureahead18JulYield26101950652023ROE32512768125148ChinaMeidongAutoLingeringNetgearingNetcash208NetcashNetcashNetcashindustryheadwindsamidhighvaluation1Apr2023SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk4Sep2023Figure1FY22resultsreviewRMBmn1H212H211H222H221H23YoYHoHNew-carsalesvolumeunits322212937429658382133158965-173Totalrevenue1180811769126581599614089113-119Grossprofit12741497133411831001-250-154Sellingexp348393398462382-40-173Adminexp27830137743343816010Operatingprofit771927668446305-544-316Netprofit53762934317839-886-781Grossmargin1081271057471-34ppt-03pptOperatingmargin6579532822-31ppt-06pptNetmargin4553271103-24ppt-08pptSourceCompanydataCMBIGMestimatesFigure2EarningsrevisionNewOldDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue288592893430704303323298635337-49-123-131GrossProfit228127133039268832553660-151-166-170OperatingProfit88814601697131818222145-326-199-209Netprofit33974997472310671287-531-298-243GrossMargin7994998999104-10ppt-05ppt-05pptOperatingMargin315055435561-13ppt-05ppt-05pptNetMargin122632243236-12ppt-06ppt-05pptSourceCMBIGMestimatesFigure3CMBIestimatesvsconsensusCMBIGMConsensusDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue288592893430704321453605240448-102-197-241GrossProfit228127133039293935494103-224-236-259OperatingProfit88814601697131818192297-326-197-262Netprofit33974997483912081444-595-380-325GrossMargin7994999198101-12ppt-05ppt-02pptOperatingMargin315055415057-10ppt00ppt-02pptNetMargin122632263436-14ppt-08ppt-04pptSourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE24Sep2023FinancialSummaryIncomestatementCashflowsummaryYE31DecRMBmnFY21AFY22AFY23EFY24EFY25EYE31DecRMBmnFY21AFY22AFY23EFY24EFY25ERevenue2357728655288592893430704Profitbeforetaxation161386462111901518Costofsales2080626137265782622127665Depreciationamortization287490581598635Grossprofit27712517228127133039Changeinworkingcapital276674411314Others36426723281432Otherincome247267288395385Netcashfromoperating18121154162115211735Distributionexpenses741860809810852Administrativeexpenses578811873837876Capex363283320220220Operatingprofit1698111488814601697Others101932002057303Netcashfrominvesting13823483115213523Financecosts133275288285192Shareofprofitsofassos-----Shareissuance116479881515ShareofprofitsofJVs4825211514Dividendpaid4751027277262475Profitbeforetax161386462111901518Others14617083951062450Netcashfromfinancing31713283153532910Taxation399308231366454Minorityinterests4835507590Netchangeincash112100218219551699Netprofit1166521339749974Cashatbeginningoftheyear25382622163634564411Exchangedifference2916---Cashattheendoftheyear26221636345644112713BalancesheetKeyratiosYE31DecRMBmnFY21AFY22AFY23EFY24EFY25EYE31DecFY21AFY22AFY23EFY24EFY25ECurrentassets55635888734283046765SalesmixCashandequivalents26221636345644112713Salesofnewvehicles883883858844843Accountsreceivables18171560173919022019After-salesservices117117142156157Inventories3551069947790834Othercurrentassets7691623120012001200GrowthRevenue167215070361Non-currentassets42408351807079258208Grossprofit3619194189120PPE13811843186318672029Operatingprofit482344203644162Intangibles5463477329132073215Netprofit553553349120301InterestsinJVsandassos62393737387Othernon-currentassets22502992288028152926ProfitlossratioTotalassets980314239154131622914974Grossmargin11888799499Operatingmargin7239315055Currentliabilities40894874443646575052Netprofitmargin4918122632Short-termdebt989141490011001300Accountspayable27883193327733053486BalancesheetratioOthercurrentliabilities312267259253266Netcashtotalequityx0502010203Currentratiox1412171813Non-currentliabilities15974932508150802805Receivableturnoverdays281199220240240Long-termdebt299276829332983605Inventoryturnoverdays62149130110110Othernon-currentliabilities12972164214920972200Payableturnoverdays489446450460460Totalliabilities56869806951797377857ProfitabilitySharecapital100102111111111ROE32512768125148Reserves38474173561161856782ROA13343234762Minorityinterests170159174196223Shareholdersequity39474275572262966893PersharedataRMBTotalequityandliabilities980314239154131622914974EPS092041025055071DPS083020012027036SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE34Sep2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBIGMwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE4