01958 Overview

EU-China Tariff Agreement: The European Union has reached a consensus with China regarding tariffs on electric vehicles, requiring Chinese exporters to submit price commitment letters before entering the EU market.

Auto Stocks Performance: Following the tariff announcement, several Chinese carmakers, including BYD, CHERY, and GEELY, saw significant stock price increases, with BYD rising by nearly 4% and other brands also experiencing gains.

Sales Performance: Beijing Benz, under BAIC MOTOR, experienced an 8% decline in sales QoQ in 2Q25 and a 19% decline YoY in the first eight months of 2025, attributed to a weak NEV product cycle and fierce competition in the market.

Profit Forecasts and Future Outlook: HSBC Global Research has significantly reduced its net profit forecasts for BAIC MOTOR for 2025-26 by 57% and 50%, respectively, but anticipates a recovery in 2027 with a projected net profit of around RMB1.7 billion, contingent on the successful launch of new NEV models.

Financial Performance: BAIC MOTOR reported a 16% year-over-year decline in 2Q25 revenue to RMB40 billion, with a negative EBIT margin of -1.2%, down 7.1 percentage points from the previous year.

Net Profit Decline: The company's quarterly net profit fell by 43% year-over-year, resulting in a net loss of RMB569 million compared to a profit of RMB943 million in the same quarter last year.

Interim Results: For the first half of 2025, BAIC MOTOR's sales decreased by 13% year-over-year to RMB82.4 billion, with an interim net profit dropping 82% to RMB360 million, representing only 16% of the broker's full-year forecast.

Revised Forecasts: BofA Securities has reduced its revenue forecasts for BAIC MOTOR for 2025-27 by 3-4%, lowered gross profit margins by 0.5-1.1 percentage points, and cut earnings estimates by 12-27%, while also lowering the target price from HKD2.1 to HKD2.

Company Performance: BAIC MOTOR reported a turnover decline of 12.6% year-over-year, totaling RMB82.398 billion for the interim results ending June 2025.

Profit Decline: The net profit significantly dropped by 81.8% year-over-year to RMB360 million, indicating substantial financial challenges.

Earnings Per Share: The earnings per share (EPS) was recorded at RMB4 cents, reflecting the company's reduced profitability.

Dividend Status: No dividend was declared for this period, suggesting a conservative approach in light of the financial downturn.

UBTECH ROBOTICS' Market Position: UBTECH ROBOTICS is recognized as a strategic leader in the humanoid robot industry, with strong partnerships and a solid customer base, including major companies like BYD and SERES. The company benefits from supportive government policies and its location in Shenzhen.

Growth Potential of Humanoid Robots: JPMorgan forecasts significant growth in the global humanoid robot market, predicting a total addressable market of 5 billion units over the next decade, positioning UBTECH ROBOTICS to capitalize on this expanding opportunity with an Overweight rating and a target price of $135.