Core views
BAIC Blue Valley owns both BEIJING and Jihu brands. Vehicle sales have been recovering for 3 consecutive years, and financial data has improved marginally. In the future, Extreme Fox Alpha will continue to launch new models in the N5 and N6 series, and expand its growth through scenario-based models such as the Koala. The company has been cooperating with Huawei for 6 years. In August 2023, the Miyun factory was renovated to develop smart car selection cooperation, under the brand name “Enjoy the Edge”. The first model, the Xinjie S9, positioned as the “executive flagship luxury executive sedan”, was unveiled at the Beijing Auto Show in April, and is scarce as an independent luxury brand. BAIC has experience in luxury cars, and Huawei has excellent technology and brand power, and the strong partnership is expected to create another success.
The company was once the champion in pure electric vehicle sales and re-launched on the C-side.
The company owns both BEIJING (B-end) and Jihu (C-end) brands, and was the sales champion of pure electric passenger cars in 2013-2019. Since 2020, the company's B-side sales have clearly recovered, and the C-end brand has focused on development. Vehicle sales have increased for 3 consecutive years, and financial data has improved marginally.
The Alpha N5 series and N6 series went hand in hand to create a scenario-based car to launch the Polar Fox Koala.
The Alpha S and T contributed steadily to sales, the N5 series dropped in the price band, and the N6 series positioned the middle and high-end markets. Polar Fox Koala is a new experiment in the parent-child market segment, and scenario-based car building has been recognized by the market. In 2023, the Jihu brand sold 30,000 vehicles, +137.8% year-on-year.
We have cooperated with Huawei for 6 years and have teamed up to build the XIJIE S9 luxury brand sedan.
The company has been cooperating with Huawei since 2017 and has launched the advance version of the Polar Fox Alpha S through the HI model. In August 2023, the company announced that it was upgraded to a smart car model through the renovation of the Miyun factory. The first model, the Xinjie S9, was unveiled at the Beijing Auto Show in April, positioning it as an executive luxury flagship sedan. BAIC has sales and operation experience with the luxury brand Mercedes-Benz. Huawei's smart driving, smart cockpit, and brand strength are all strong. The strong partnership is expected to replicate the brand's success and inject new momentum into the company's growth.
Profit forecast: We forecast the company's 24-26 profit of 35.1/-1.21 billion yuan, corresponding to PE valuation -11.6/-33.6/119.1 times, and give it a “buy” rating.
Risk warning: downstream demand falls short of expectations; market competition intensifies; new model development progress falls short of expectations; the company's balance ratio is high.