According to the Wisdom Financial App, Meidong Auto (01268) rose more than 15% during trading hours. As of press time, it has risen 10.19%, to HKD 2.92, with a turnover of HKD 27.3817 million.

Recently, there have been reports that due to poor sales and loss on vehicle sales on the mainland, some Porsche dealers in China have boycotted. According to a report by Daiwa, the new car profit margin of Chinese luxury car dealers has dropped to the level where dealers refuse to accept more inventory, unless the manufacturer provides additional rebates. For dealers, the boycott shows that new car business is bottoming out. As the current low-profit-per-sale of new cars is mainly reflected in prices, any additional subsidies from automakers in the short term will bring upside potential to dealer profits.

Zhongtai Securities previously pointed out that the core value of car dealers is to bear inventory risk for the automakers. In an oversupply market, the probability of OEMs turning to the dealership model from direct sales is high, but we cannot determine the time for industry recovery. Meidong Auto has the fastest inventory turnover in the industry, and its ultimate operation efficiency can help the company maintain a healthier cash flow and balance sheet of assets.