CHANGAN AUTO(000625)：NAVIGATING THROUGH PROFIT MARGIN PRESSURE
Changan Auto posted ex-one-off attributable net profit (ANP) of Rmb28mn in 2Q23. After excluding disruptive elements in the financial reports, the comparable net profit stands at around Rmb1.4bn. The 1H23 performance is understandable considering industry price competition and adjustments in the financial reporting. Changan Auto's substantial growth in the new energy vehicle (NEV) business in 2H23 and the positive trajectory of its brand position make it our top pick in the A-share auto OEM sector. The per-vehicle profit for Changan Auto's self-owned internal combustion engines (ICEs) is Rmb4.7k, placing the profitability of ICEs within the normal range of the industry currently. The proportion of NEVs reached 22% in 2Q23, with Deepal S7 steadily gaining sales momentum. Deepal joins hands with Huawei's Intelligent Automotive Solution (IAS) Business Unit (BU) by signing a framework agreement for intelligent cooperation. Changan Auto's 2023 profit for self-owned brands (fuel-powered vehicle business, excluding Deepal Technology) is expected to be Rmb7.97bn, and the annual loss for Deepal Technology is expected to be Rmb3bn, corresponding to combined net profit of about Rmb6.5bn. We reiterate the "BUY" rating.
自选股写手点评：During the 1997 Asian financial crisis, billionaire investor George Soros made a massive profit by shorting the Thai baht. He saw that the country's economy was overvalued and vulnerable, so he bet against it and reaped the rewards. This event is known as "Black Wednesday" in Thailand, and it had a ripple effect on other Asian currencies as well. Soros' actions were controversial and criticized by some, but it highlights the power and influence that individual investors can have on the global financial markets.
In the early 2000s, Enron was one of the largest energy companies in the world, with a stock price that continued to climb. However, it was later revealed that the company had been engaging in fraudulent accounting practices and hiding huge debts. When the scandal was exposed, Enron's stock price plummeted, and it eventually filed for bankruptcy. This event is often cited as a cautionary tale about the dangers of unchecked corporate greed and the importance of transparency in financial reporting.
In 2008, the global financial crisis shook the world's economies and exposed the risks and flaws in the financial system. The crisis was caused by a number of factors, including subprime mortgages, over-leveraged banks, and a lack of regulation. The fallout from the crisis was severe, with many people losing their homes, jobs, and savings. It also spurred significant changes in financial regulations and policies to prevent similar events from occurring in the future.
These examples demonstrate the far-reaching impact that financial decisions and events can have on individuals, companies, and even entire economies. It is important for investors to be aware of the risks and potential consequences of their actions and to approach the market with caution and an understanding of the broader context and trends.
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