Key points of the announcement: 2024Q3's revenue for a single quarter was 6.077 billion yuan, +71.8%/+171.7% year-on-month; Q3 net profit to mother was -1.92 billion yuan (-1.272 billion yuan for 2023Q3 and -1.555 billion yuan for 2024Q2); Q3 net profit after deducting non-mother for the single quarter was -1.929 billion yuan (2023Q3 was -1.293 billion yuan. (2024Q2 = -1.55 billion yuan).

The Q3 performance was basically in line with expectations, and bicycle losses decreased month-on-month. 1) Revenue: Under the continuous improvement of Extreme Fox Koala/α T5/S5 sales volume, the company's Q3 sales volume improved significantly year-on-month, achieving sales volume of 0.0398 million units, an average of +103.6%/+122.7% compared to the same period, and an ASP of 0.1525 million yuan, or -15.7%, respectively. 2) Gross profit margin: The company's Q3 gross profit margin was -6.46%, -1.6/+1.1pct, respectively. 3) Expense rate: The cost rate was greatly improved during the period. The company's 24Q3 sales/management/R&D expense rates were 9.92%/4.99%/7.25%, respectively, -6.5/0.0/+0.9pct year-on-year, and -16.4/-5.7/-8.0 pct, respectively. 4) Net profit: consolidated statement of caliber bike profit -0.0484 million yuan (after deduction), profitability improved month-on-month (2024Q2 = -0.0867 million yuan). In the end, the company achieved net profit to mother of -1.92 billion yuan in a single quarter.

Endogeness+cooperation go hand in hand to achieve comprehensive development. 1) Join hands with Huawei Smart Choice to create a high-end brand and enjoy the world. BAIC is one of the earliest car companies to cooperate with Huawei, and HI+ Smart Select has carried out multi-faceted strategic cooperation. In 2024, the first model of the BAIC Blue Valle+Huawei Smart Choice collaboration, the Enjoy Jie S9, was officially launched. 2) Jihu brand marketing & channel capabilities have been steadily improved. The company formulates differentiated marketing strategies with one vehicle, one policy, one city, one policy, and boldly innovates in marketing through new media cooperation methods such as “Walking with Hui”.

Profit forecast and investment rating: Due to increased competition in the industry, we lowered the company's 2024-2026 performance forecast, and the net profit forecast to mother was -5.3/-2/0.6 billion yuan (originally -4.098/-1.974/0.86 billion yuan). We maintain the company's “buy” rating in consideration of enjoying the company's subsequent courtesy.

Risk warning: Industry price wars increase risks; risk of new vehicle sales falling short of expectations; intelligent technological innovation falling short of expectations, etc.