BAIC Motor (1958.HK): Model Revision; Lower TP to HK$1.0

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BAIC Motor (1958.HK): Model Revision; Lower TP to HK$1.0

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30 Jul 2026 02:43:33 ET │ 10 pages

BAIC Motor (1958.HK)

Model Revision; Lower TP to HK$1.0

CITI'S TAKE

BAIC issued 1H26 profit warning, with 1H26 net loss of Rmb1.55-1.65bn

(versus 1H25 net profit Rmb360mn), owing to combination of headwinds

including strong China domestic competition, which caused sales to fall Neutral

short of expectations, alongside rising raw material costs and increased Price (29 Jul 26 16:10) HK$0.89

market investment expenditure. In response to these challenges, company

is actively pursuing its NEV transformation strategy — with subsidiary Target price HK$1.00↓

BAIC-Mercedes expanding its NEV model lineup and deepening localization from HK$1.30

efforts to drive cost efficiencies and bolster competitiveness in the luxury Expected share price return 12.4%segment — while the local brand’s best-selling models appear to have

bucked the industry trend with positive sales growth. Upon earnings Expected dividend yield 0.0%

downgrade, we lower our TP from HK$1.3 to HK$1.0, by applying a lower Expected total return 12.4%

2026E P/B multiple of 0.14x (2SD below 2-year average; versus prior 0.17x) Market Cap HK$7,134Mto reflect deteriorated earnings. Despite these structural headwinds, the

company's current market cap of ~Rmb6bn appears well-supported, US$910M

effectively mirroring its end-2026E net cash position Rmb7.8bn. Neutral.

BAIC-Mercedes 1H26 sales – According to CPCA, BAIC-Mercedes 1H26 sales

volume registered -31% YoY to 165,727 units (Jun sales -42% YoY to 24,800 units). Price Performance

(RIC: 1958.HK, BB: 1958 HK)

Estimate revisions – We lower our 2026-28E revenue forecasts by 13-17% to

Rmb121/109/106bn to reflect lower BAIC-Mercedes sales forecasts at