標(biāo)普+中國汽車：需求疲軟加劇競爭- China Auto Soft Demand Heightens Competition 2023

ChinaAuto:

SoftDemandHeightensCompetition

ClaireYuan

Director

StephenChan

AssociateDirector

ChinaManufacturingTeam

CorporateRatings

October10,2023

Thisreportdoesnotconstitutearatingaction

KeyTakeaways

?Whatdoweexpectoverthenext12months?

?China’sdomesticlightvehiclesalestoincreaseby0%-2%in2023-2024.

?Growthindomesticelectricvehiclesaleswilldecelerateto15%-25%overtheperiod.

?Downsiderisks:

?Macroheadwindscastuncertaintyonlightvehicledemand.

?Prolongedpricewarsandrisingelectrificationweighoncarmakers’marginsandcashflows.

?TradehurdleswouldcomplicateChinesecarmakers’expansionoverseas.

?Creditimplication:

?RatingdowngraderiskhasheightenedforGeelyentities.ZhejiangGeely’sEBITDAmarginfellto4.3%inthefirsthalfof2023.

?WeseeratingbuffersforBeijingAuto,BAICMotor,JohnsonElectric,andYanfengInternational.

?ThepositiveratingoutlookonCATLreflectsourexpectationofimprovingbusinessstrengthandsustainednetcashposition.

2

MutedMomentumAhead

LVsalestoseelimitedgrowthin2023-2024

(Mil.units)

30

25

20

15

10

5

0

Chinalightvehiclesales(leftscale)Year-on-yearchange(rightscale)

2017201820192020202120222023e2024e

EVsalesgrowthdecelerating

(Mil.units)

12

9

6

3

0

EVsales(leftscale)YoY(rightscale)EVpenetration(rightscale)

20192020202120222023e2024e2025e

LV--Lightvehiclesincludepassengervehiclesandlightcommercialvehicles.EV--Electriclightvehicle.YoY--Yearonyear.e--Estimate.Sources:ChinaAssociationofAutomobileManufacturers,Wind,S&PMobility,S&PGlobalRatings.

2%

0%

-2%

-4%

-6%

-8%

-10%

150%

100%

50%

0%

?China’sdomesticlightvehicle(LV)

salescouldrise0%-2%in2023-2024.

?Unitsalesinthefirsteightmonthsthisyearwerelargelyflat.

?Continuouspricecuts,betterseasonalitywillsupportsalesfortherestoftheyear.

?Softconsumersentimentamidmacro

headwindswillconstraingrowthin2024.

?Salesgrowthofdomesticelectriclightvehicleswilllikelydeceleratetoc.15%-

25%over2023-2024.

?Saleswereupabout30%(excludingexports)inthefirsteightmonthsthisyear.

?Improvingproductofferingsandpurchaseincentivescontinuetosupportrising

electricvehicle(EV)adoption.

?EVpenetrationcouldrisetoward40%by2025.

3

CompetitionIsEscalating

Localbrandscontinuetogaintraction

Marketshare

100%80%60%40%20%

0%

8%

17%

21%

9%

20%

21%

10%

23%

22%

9%

24%

8%

22%

25%

10%

20%

22%

26%

41%38%36%41%47%50%

ChinaproprietaryGermanbrandsJapanesebrandsU.S.brandsOthers

201820192020202120228M2023

Sources:ChinaPassengerCarAssociation,S&PGlobalRatings.

EVproducersareracingforshare

8M20232022

BYD

Tesla

GAC

SAIC

Geely

LiAuto

Chang'an

GreatWall

NIO

Hozon

0%5%10%15%20%25%30%35%

PercentageofEVunitsalescapturedbythetop10electriccarmakers

40%

45%

GAC--GuangzhouAutomobileGroup.Sources:ChinaAssociationofAutomobileManufacturers,ChinaPassengerCarAssociation,S&PGlobalRatings.

?WeexpectChineselocalbrandsin

aggregatetomaintainsolidmarketpositionoverthenext24months.

?WithrisingEVpenetration,international

brandswhicharenormallylaggardsinEV

havebeenlosingedge.Increasing

collaborationsbetweenforeignandChineseEVautomakers,toleveragethelatter’s

productionplatformandsoftware

capability,couldbecomeatrendinthenext12-24months.

?TheEVmarketisbecomingmorecrowdedwithnewentrantsandrapidlyexpanding

productportfoliosatexistingplayers.Inour

view,industryconsolidationislikelyin3-5years.

?Competitiveproductsandbettercost

controlwillunderpintheleadingpositionforBYDandTeslainChina’sEVmarketoverthenext1-2years.

4

RMB'000

PricingPressureWillRemainHigh

?Softdemandwillkeepthepricingenvironmentunfavorable.Pricecompetitionwilllikelyendureoverthenext12months.

?CarmakersthathaverelativelyhighEVpenetrationyetstillsmallabsoluteEVsalesvolumecouldseemorematerialmargindilutionrelativetopeers.

?OEMsthatcanrampupsalesquicklyforbettereconomiesofscaleandcontinuouslyimproveproductofferingswillbebetterabletooffsetthepricingimpactonmargins.

PricewarforEVscouldlingerforlongerLargerdiscountsonICEstostimulatesales

TeslaModelY——TeslaModel

3

─MG4(MGMULAN)—BYDSongPlusDmi

400

320_______________________________________________________________

240

160—_____________________________________________

80Dec-22Feb-23Apr-23Jun-23Aug-23

16%

14%

12%

10%

8%

-0-2021-0-2022-0-2023

JanFebMarAprMayJunJulAugSepOctNovDec

Sources:ModiA,16888.com,S&PGlobalRatings.ICE—Internalcombustionengine.ChinaPassengerCarAssociation,S&PGlobalRatings.

S&PGlobal

Ratings

5

ChineseCarmakers’OverseasAdventuresWillBeBumpy

China’sautoexportgrowthislikelytodeceleratein2024

EVexport(leftscale)ICEexport(leftscale)PVexport(leftscale)PVexportYoYgroth(right

(Mil.units)

6

5

4

3

2

1

0

20192020202120228M20232023e2024e

NobreakdownintoEVandICEfor2024.Note:ICE--Internalcombustionengine,PV–passengervehicle.Sources:ChinaAssociationofAutomobileManufacturers,ChinaPassengerCarAssociation,ChinaCustoms,S&PGlobalRatings.

TradehurdlescoulddampenEVexport

Others

23%

Europe44%

Oceania

7%

Asia

27%

Sources:ChinaCustoms,ChinaPassengerCarAssociation,S&PGlobalRatings.

scale)

110%

90%

70%

50%

30%

10%

-10%

?China’sautoexportshavejumpedoverthepastfewyears,benefitingfromresilient

supplychainsandincreasingproductcompetitiveness.

?Passengervehicle(PV)exportscouldreach4.1millionunitsin2023.Exportgrowthis

settodeceleratein2024,givenahighbase.

?Tradehurdlesareemerging.Theanti-

subsidyprobeannouncedbytheEUonEVsimportedfromChinacouldhinderEVexportafter2024.Europeaccountedforover40%ofChina’sEVexportsyear-to-date.

?Theaboveinvestigationwilllikelyhavea

limitedimpactonratedcarmakers.Amongthem,GeelyAutohasthehighestexport

exposure.Exportsaccountedfor17%ofitstotalsalesvolumeinthefirstninemonths,withdiversifieddestinationsincluding

Eastern&NorthernEurope,theMiddleEast,andSoutheastAsia.

6

Giga-watthours(GWh)

Marketshare

BatteryMarket–EvolvingCompetitiveLandscape

?Growthinbatteryinstallationswillcontinuetodownshiftoverthenext24monthsasEVproductiongrowthslows.

?WebelievetheChinesebatterymarketis

oversuppliedwiththeratioofbattery

installation-to-productiondroppingto48%inthefirsteightmonthsin2023from76%in2020.

?Thatsaid,majortier-twobatteryproducers(e.g.,BYD,CALB)havebeengainingmarketsharesince2022withEVproducers

diversifyingbatterysupplytolowercosts.

?Withtechnologyadvantages,strongmarketreputationanddiversifiedcustomerbases,CATL'sshareinChinashouldremainat

c.40%.Itssharefellto43%inthefirsteightmonthsof2023amidintensifyingmarketcompetition.

Thepaceofbatteryinstallationisslowing

2021(leftscale)2022(leftscale)2023(leftscale)2022YoY(rightscale)2023YoY(rightscale)

40200%

30

20

10

0

150%

100%

50%

0%

JanFebMarAprMayJunJulAugSepOctNovDec

Tier-twoplayersaregainingshareamidintensifyingcompetition

100%80%60%40%20%

0%

CATLBYDGotionCALBEveBatteryOthers

201820192020202120228M2023

Note:OnlyCATLisrated--seeslide10fordetails.Gotion--GotionHigh-TechCo.Ltd.CALB--CALBGroupCo.Ltd.Sources:ChinaAutomotiveBatteryInnovation

Alliance,S&PGlobalRatings.

7

LithiumcarbonateDDPChina

(RMBperton)

RMB/kilowatthour

800

ModeratingMaterialCostsMayAlleviateMarginStrainFromThe2H2023

?Lithiumcarbonatepricescouldcontinuetomoderate,duetodemandworriesandgrowingsupplypost-pandemic.

?Fallingrawmaterialpricesandlessrobustdemandshouldcontinuetodragbatterypricesfortherestof2023.

?EVproducersshouldseelowerproductioncostsfromthesecondhalf,afterdigestingrawmaterialinventorypurchasedathighprices.

?Marginsofleadingbatteryproducerscouldimproveslightlywithbettereconomiesofscaleandrawmaterialcostfallingfasterthanbatteryprices.

LithiumcarbonatepricecouldremainweakBatterypricetrendingdownsinceFebruary

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0

Mar-2021Sep-2021Mar-2022Sep-2022Mar-2023Sep-2023

Averagepriceofprismaticternarylithium-ionbatterycell

AveragepriceofprismaticLFPbatterycell

1,000

900

700

600

500

400

Sep-2021Jan-2022May-2022Sep-2022Jan-2023May-2023Sep-2023

RMB--Chineserenminbi.LFP--Lithiumironphosphate.Source:

RMB--Chineserenminbi.DDP--Delivereddutypaid.Source:S&PGlobalCommodityInsights.

8

ElectrificationIsWeighingOnSelectCarmakers

Geelyisinthefastlaneofelectrification

Salesvolume(thousandunits)

8M2023

8M2023YoY

8M2023EVpenetration

2023EVpenetrationtarget

ZhejiangGeelyHoldingGroupCo.Ltd.

1,500-1,600*

14%-19%*

26%-31%*

n.a.

GeelyAutomobileHoldingsLtd.

985

15%

25%

40%

BeijingAutomotiveGroupCo.Ltd.

1,077

15%

6%-9%*

n.a.

BAICMotorCo.Ltd.

650-700*

18%-23%*

7%-10%*

n.a.

Note:1)EVpenetrationratereferstoEVsalesasapercentageoftheentity’stotalautosales.2)PenetrationratesofChinaFAWandBeijingAutoareour

estimates.3)EV--Electriclightvehicleincludespureelectricandplug-inhybridelectriclightvehicles.4)*areestimatedranges.,5)8M2023referstothefirsteightmonthsof2023.YoY--Yearonyear.Sources:Companyreports,S&PGlobalRatings.

Fasterelectrificationweighsmoreonprofitability

20%2019202020212022H12023

EBITDAmargin

15%

10%

5%

0%

ZhejiangGeelyGeelyAutomobileBeijingAutoBAICMotor

Note:ZhejiangGeely'sEBITDAmarginiswithproportionateconsolidationofPolestarsince2022.Sources:Companyreports,S&PGlobalRatings.

?ZhejiangGeely,GeelyAuto:Whileourbasecasefactoredinimprovingmarginsand

leveragein2024,intensifyingpricecompetitioncouldhinderthegroup’smarginrestorationanddeleveraging.

?WerevisedtheoutlookonCATLtopositiveinApril2023.Weexpectthecompanyto

holditsNo.1positioninChinaandincreasepresenceinEuropewhilemaintaininganetcashposition.

?Wegenerallyseeratingbuffersforother

OEMsandsuppliers.Higheroperating

efficiency,lowerrawmaterialcosts,modestvolumegrowthandimprovingproduct

portfoliosshouldunderpinbetterfinancialmetrics.

9

MarginAndLeverageTheKeyRatingDrivers

2022A:18.8%H12023:20.7% 2023E:22.7%2024E:25.1%

2022A:13.6%H12023:14.8% 2023E:13.3%2024E:13.0%

2022A:(15.6%) H12023:22.2%2023E:14.0%-16.0%2024E:5.0%-7.0%

2022A:2.9xH12023:2.7x 2023E:2.5x2024E:2.3x

BeijingAutomotiveGroupCo.Ltd.

FFO/Debt<12%

BBB/Stable/--

n.a.

Company

Issuercreditrating

Ratingdownsidetriggers

Latestforecast

Keyratingdrivers

Leverage

EBITDAMargin

Debt/EBITDA

FFO/debt

EBITDAmargin

Salesvolumegrowth

?SalesmomentumofJVbrands

?Restructureofproprietarybrands

BAICMotorCo.Ltd.

BBB/Stable/--

FFO/Debt<12%

n.a.

Netcash

Netcash

2022A:18.8%H12023:17.3% 2023E:17.3%2024E:17.0%

2022A:(8.2%) H12023:24.1%2023E:14.0%-16.0%2024E:3.0%-5.0%

?

?

SalesmomentumofJVbrands

Restructureofproprietarybrands

GeelyAutomobile

HoldingsLtd.

BBB-/Negative/--

Debt/EBITDA>2.0x

<6%

Netcash

Netcash

2022A:3.2%H12023:1.0% 2023E:3.3%2024E:4.7%

2022A:7.9% H12023:13.1%2023E:9.0%-11.0%2024E:5.0%-7.0%

?

?

Volume,mixandcostcontroltooffsetrisingEVsales

Ratingtomoveintandumwithratingontheparent

ZhejiangGeelyHoldingGroupCo.Ltd.

BBB-/Negative/--

Debt/EBITDA>2.0x

<6%

2022A:2.5xH12023:2.4x 2023E:2.3x2024E:1.9x

2022A:22.4%

2023E:24.6%

2024E:34.4%

2022A:5.7%H12023:4.3% 2023E:5.5%2024E:6.3%

2022A:4.7%H12023:12.0%-16.0%2023E:11.0%-13.0%2024E:11.0%-13.0%

?

?

Volume,mix&pricetooffsetrisingEVsalesHighinvestmentinEVcoulddragfree

operatingcashflow(FOCF)

ContemporaryAmperexTechnologyCoLtd.

BBB+/Positive/--

Debt/EBITDA~1.5x

<11%

Netcash

Netcash

2022A:13.7%H12023:16.9% 2023E:17.1%2024E:17.3%

?

?

EBITDAandOCFexpansiontocovercapexAbilitytomaintaincompetitivepositionintheEVbatterymarket

JohnsonElectric

HoldingsLtd.

BBB/Stable/--

Debt/EBITDA>1.5x

Materiallydeterioratesonasustainedbasis

2023A:0.6x

2024E:0.5x

2025E:0.3x

2023A:>60%

2024E:>60%

2025E:>60%

2023A:12.4%

2024E:13.1%

2025E:13.3%

?

?

Volumegrowthandcostcuttingtoimprovemargin

MaintainpositiveFOCFandkeeplowleverage

YanfengInternational

AutomotiveTechnologyCo.Ltd.

BBB-/Stable/--

Debt/EBITDA>1.5x

<6%

2022A:1.8xH12023;0.6x 2023E:1.4x2024E:0.9x

2022A:53.2%

2024E:>60%

2025E:>60%

2022A:4.8%H12023:6.8% 2023E:5.1%2024E:5.3%

?

?

Stablecreditworthinessofitsparent-HuayuAutomotive

Workingcapitalmanagementandleveragecontrol

Notes:1)ZhejiangGeely'sEBITDAmarginiswithproportionateconsolidationofPolestarsince2022.2)BAICMotor’sdowngradetriggeristheparentcompanyBeijingAuto’smetric.3)GeelyAuto’sdowngradetriggeristheparentcompanyZhejiangGeely’smetric.4)ThefinancialfiguresofJohnsonElectricrefertofiscalyearendingMarch31.5)YanfengInternational’sEBITDAmarginandthecorrespondingdownsidetriggeraretheparentcompanyHuayuAutomotiveSystemsCo.Ltd.’smetrics.FFO—Fundsfromoperations.Sources:Companyreports,S&PGlobalRatings.

10

ZhejiangGeelyHoldingGroupCo.Ltd.(BBB-/Negative/--)

(Mil.units)

EBITDAmargin

(Bil.RMB)

Capex(leftscale)FOCF(leftscale)(Capex+R&Dexpense)torevenue(rightscale)

10

0

-10

-20

-30

-40

201820192020202120222023e2024e

16%15%14%13%12%

11%

CredithighlightsKeyoperationaldata

Keystrengths

Keyrisks

Diversifiedgeographicalexposurewithawideproductportfolio.

Uncertaintiesintheexecutionofitselectrificationstrategy.

GrowingEVpenetrationand

continuousmodelupgrades.

Increasingelectricvehiclesalesmay

continuetoweighonmarginandleverage.

Synergiesamongsubsidiariesontechnologyplatformandjointprocurement.

Highcapitalspendingkeepsfreeoperatingcashflow(FOCF)negative.

3

2

1

0

Salesvolume(leftscale)

EVpenetrationrate(rightscale)

YoYsalesvolumegrowth(rightscale)YoYrevenuegrowth(rightscale)

201820192020202120222023e2024e

50%

30%

10%

-10%

Keyfinancials

Downgradetriggers

12%

10%

8%

6%

4%

EBITDAmargin

Debt/EBITDA

EBITDAmargindowngradetriggerDebt/EBITDAdowngradetrigger

201820192020202120222023e2024e

4

3

2

1

0

Debt/EBITDA

Note:1)ZhejiangGeely’sfinancialsareunderproportionateconsolidationofPolestarsince2022.2)EVpenetrationratereferstoEVsalesasapercentageoftheentity’stotalautosales.3)EV--Electriclightvehicleincludespureelectricandplug-inhybridelectriclightvehicles.ZhejiangGeely'sdataalsoincludeshybridelectricvehicles.Capex--Capitalexpenditure.RMB—Chineserenminbi.e--Estimate.Sources:Companyreports,S&PGlobalRatings.

11

GeelyAutomobileHoldingsLtd.(BBB-/Negative/--)

(Mil.units)

(Bil.RMB)

Credithighlights

Keyoperationaldata

Keystrengths

Keyrisks

LeadingproprietarybrandinChinawithwideproductofferingsandgoodbrandrecognition.

Uncertaintiesintheexecutionofitselectrificationstrategy.

Synergieswithsistercompanies(e.g.,VolvoCarAB)ontechnologydevelopmentand

procurement.

Increasingelectricvehiclepenetrationpressurizingmargin.

Netcashposition.

Strongrelianceonasinglemarket.

Salesvolume(leftscale)YoYsalesvolumegrowth(rightscale)

1.8EVpenetrationrate(rightscale)YoYrevenuegrowth(rightscale)

1.2

0.6

0.0

201820192020202120222023e2024e

50%

30%

10%

-10%

Revenueandmargintrend

Keyfinancials

200

160

120

80

40

0

Revenue(leftscale)EBITDAmargin(rightscale)

201820192020202120222023e2024e

12%

10%

8%

6%

4%

2%

Capex(leftscale)FOCF(leftscale)(Capex+R&Dexpense)torevenue(rightscale)

(Bil.RMB)

12

6

0

-6

201820192020202120222023e2024e

10%

9%

8%

7%

6%

Note:1)GeelyAutomobileHoldingsLtd.isacoresubsidiaryofZhejiangGeelyHoldingGroup.Theratingisequalizedtotheratingontheparentcompany.Pleaserefertoslide10forthedownsidetriggersofbothGeelyAutomobileHoldingsLtd.andZhejiangGeelyHoldingGroup.2)TheEVsalesvolumeandpenetrationrateof2023eisthecompany’starget.3)EVpenetrationratereferstoEVsalesasapercentageoftheentity’stotalautosales.4)EV--Electriclightvehicleincludespureelectricandplug-in

hybridelectriclightvehicles.e--Estimate.FOCF--Freeoperatingcashflow.Capex--Capitalexpenditure.Sources:Companyreports,S&PGlobalRatings.

12

(Mil.units)

FFO/Debt

EBITDAmargin

(Bil.RMB)

BeijingAutomotiveGroupCo.Ltd.(BBB/Stable/--)

Keyoperationaldata

Credithighlights

Keystrengths

Keyrisks

Solidpositioninthehigh-endpassengervehiclesandcommercialvehiclesmarket.

Pressureonprofitabilityduetointensifyingpricecompetitionandrisingelectrification.

Strongandstablealliancewithlargeglobaloriginalequipmentmanufacturers(OEMs).

Uncertaintiesinturningaroundloss-makingproprietarybrands.

Veryhighlikelihoodofextraordinary

supportfromtheBeijingmunicipal

government.

3

2

1

0

Salesvolume(leftscale)

EVpenetrationrate(rightscale)

YoYsalesvolumegrowth(rightscale)YoYrevenuegrowth(rightscale)

201820192020202120222023e2024e

20%

5%

-10%

-25%

MarginanddowngradetriggerKeyfinancials

FFO/debtDowngradetrigger-FFO/DebtEBITDAmarginCapex(leftscale)FOCF(leftscale)(Capex+R&Dexpense)torevenue(rightscale)

30%

25%

20%

15%

10%

14%

13%

12%

11%

10%

20

10

0

-10

-20

8.5%

8.0%

7.5%

7.0%

6.5%

201820192020202120222023e2024e201820192020202120222023e2024e

Note:1)EVpenetrationratereferstoEVsalesasapercentageoftheentity’stotalautosales.2021and2022penetrationratesarebasedonourestimate.2)EV--Electriclightvehicleincludespureelectricandplug-inhybridelectriclightvehicles.e-Estimate.FFO--Fundsfromoperations.FOCF--Freeoperatingcashflow.Capex--Capitalexpenditure.RMB—Chineserenminbi.Sources:Companyreports,EVVolumes,S&PGlobalRatings.

13

ContemporaryAmperexTechnologyCo.Ltd.(BBB+/Positive/--)

EBITDAmargin

(Bil.RMB)

Debt/EBITDA

Credithighlights

Keyoperationaldata

Keystrengths

Keyrisks

Moderatingrevenuegrowthgiven

deceleratingEVsalesgrowthinChina.

LeadingmarketpositionintheglobalEV

batteryindustry.

Strongcustomerrelationshipswithmajorautomakers.

Intensifyingcompetitioncouldthreatenmarketshareandconstrainmargin

improvement.

Sustainednetcashpositionwithpositivefreecashflowgeneration.

Uncertaintyinoverseasexpansionsamidgeopoliticaltensions.

Salesvolume-energystorage(leftscale)

BatterysalesvolumeYoYgrowth(rightscale)YoYrevenuegrowth(rightscale)

Salesvolume-Li-ionbattery(leftscale)BatteryASPYoYgrowth(rightscale)

(GWh)

700

600

500

400

300

200

100

0

300%250%200%150%100%50%0%

-50%

201820192020202120222023e2024e

Downsidetriggers

Keyfinancials

30%

25%

20%

15%

EBITDAmarginEBITDAmargindownsidetrigger

Debt/EBITDADebt/EBITDAdownsidetrigger

2.0

1.5

1.0

0.5

Capex(leftscale)FOCF(leftscale)(Capex+R&Dexpense)torevenue(rightscale)

80

40

0

-40

50%40%30%20%

10%

10%0.0

201820192020202120222023e2024e

-800%

201820192020202120222023e2024e

e--Estimate.ASP--Averagesellingprice.Capex–Capitalexpenditure.FOCF--Freeoperatingcashflow.RMB--Chineserenminbi.GWh--Gigawatthours.Sources:Companyreports,S&PGlobalRatings.

14

JohnsonElectricHoldingsLtd.(BBB/Stable/--)

Revenue(Bil.US$)

TotalrevenueYoYgrowth

EBITDAmargin

Credithighlights

Steadyrevenuetrend

Keystrengths

Keyrisks

Solidmarketpositioninseveralautopartssegments.

Highinflationrestrainingmarginstobelowpre-pandemiclevels.

U.S.dollarappreciationmayleadtoforeignexchangelossesandslowprofitability

recovery.

Diversifiedcustomerbasewithevenlydistributedgeographicalexposure.

Lowfinancialleverageonprudentfinancial

management.

TotalrevenueNorthAmerica

EuropeOthers

China

Asia(excludingPRC)

4TotalrevenueYoYgrowth

3

2

1

0

201920202021202220232024e2025e

10%

0%

-10%

MarginanddowngradetriggerKeyfinancials

Debt/EBITDADowngradetrigger-Debt/EBITDAEBITDAmargin

Debt/EBITDA

2.0

1.5

1.0

0.5

0.0

20192020202120222023e2024e2025e

18%

16%

14%

12%

10%

Capex(leftscale)FOCF(leftscale)(Capex+R&Dexpense)torevenue(rightscale)

(Mil.US$)

300

150

0

-150

-300

-450

201920202021202220232024e2025e

21%18%15%12%9%6%

Note:FiscalyearendingMarch31.e--Estimate.Capex--CapitalExpenditure.FOCF--Freeoperatingcashflow.Sources:Companyreports,S&PGlobalRatings.

15

RelatedResearch

Commentary

?GlobalAutoSalesForecasts:ThePricingPartyIsComingToAnEnd

,Oct09,2023

?AsianBatteryMakersAreShiftingStrategiesToHoldOntoGlobalLead

,Oct05,2023

?GlimmersOfWinnersEmergeInAsia'sEVPush

,May15,2023

?GlobalAutoSalesForecasts:MacroRisksDemandPricingAndProductionDiscipline

,Apr18,2023

TearSheet&RatingActions

?TearSheet:ZhejiangGeelyHoldingGroupCo.Ltd.

,Sep06,2023

?TearSheet:GeelyAutomobileHoldingsLtd.

,Sep06,2023

?TearSheet:BeijingAutomotiveGroupCo.Ltd

.,Sep05,2023

?TearSheet:BAICMotorCorp.Ltd.

,Sep04,2023

?TearSheet:ContemporaryAmperexTechnologyCo.Ltd.

,Jul31,2023

?ContemporaryAmperexTechnologyOutlookRevisedToPositiveOnRisingBusinessOpportunities;'BBB+'RatingAffirmed

,Apr24,2023

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