Guangzhou Automobile Group Co Ltd Class A

GAC Group announced that in July 2026, auto production was 103,000 units, down 19.62% year-on-year, while sales were 113,000 units, down 5.48% year-on-year. Cumulative production for the year reached 900,000 units, down 3.24% year-on-year, and cumulative sales reached 886,000 units, up 1.28% year-on-year. In the first quarter of 2026, the company achieved revenue of 20.229 billion yuan, with a net loss attributable to shareholders of 656 million yuan.

CATL disclosed its 2026 half-year report, with first-half revenue reaching 276.917 billion yuan, up 54.80 percent year-on-year, and net profit attributable to the parent company of 43.284 billion yuan, up 41.98 percent year-on-year, marking its best interim results since listing and an average daily net profit of about 239 million yuan. The company also launched an A-share buyback plan of up to 40 billion yuan, with the repurchased shares to be cancelled and used to reduce registered capital. If implemented at the upper limit, it would be the largest buyback in A-share history. Power battery systems remained the largest revenue source, generating 192.125 billion yuan, up 46.02 percent year-on-year, with a global market share of 40.2 percent. Energy storage battery systems revenue was 53.261 billion yuan, up 87.54 percent year-on-year, with shipments ranking first globally for five consecutive years. Battery materials and recycling business revenue was 18.811 billion yuan, up 67.23 percent year-on-year, and was the only segment among the three main businesses to see an improvement in gross margin, reaching 27.04 percent, up 5.81 percentage points year-on-year. In the first half, domestic revenue was 189.787 billion yuan, up 61.28 percent year-on-year, while overseas revenue was 87.129 billion yuan, up 42.35 percent year-on-year, with the overseas business gross margin of 29.97 percent higher than the domestic 21.16 percent. In contrast to CATL's rising performance, half-year earnings forecasts from several new energy vehicle manufacturers show that profit pressure has not significantly eased, with industry chain profits further concentrating in the battery segment. Among 11 listed vehicle companies that have disclosed forecasts, only four expect profit growth, with passenger car companies facing greater pressure.

Honda Motor has extended its vehicle production and sales joint venture with Guangzhou Automobile Group, GAC Honda, through to 2038. Honda holds a 50 percent stake in the venture, which was established in 1998 and has produced over 11 million units cumulatively. The extension comes as GAC Honda struggles with China's shift to new energy vehicles, with sales plunging 53 percent to 64,150 units in the first half of 2026. Honda stated it will leverage both companies' technologies to strengthen its business in the world's largest auto market, where electrification and intelligent technologies are rapidly advancing.

On July 16, eight domestic automakers held launch events, six of which were new vehicle unveilings, a density that has sparked industry concern over excessively rapid product cycles. According to an incomplete tally by Red Star Capital Bureau, GAC Group, Geely Auto, Great Wall Motor, Xpeng, Leapmotor, SAIC's IM brand, Li Auto, and SAIC-GM-Wuling all had activities that day, rolling out a total of seven all-new or refreshed models. In the first half of this year, 630 new car models were introduced in China, averaging 3.5 per day, while only 173 new phone models hit the market in the same period — meaning new car launches are now more than twice as frequent as new phone releases. BYD executive He Zhiqi bluntly called it 'completely insane,' noting that a new car typically requires an investment of over 1 billion yuan and a development cycle of more than two years, yet the buzz rarely lasts three months. Dongfeng Nissan executive Sun Hao went further, likening the pace of new car launches to that of beverages. The rapid iteration has created a 'new car effect death valley,' where vehicles sell well at launch but demand fades just as production capacity ramps up, causing severe supply chain volatility. Several automakers have already booked massive asset impairment provisions — for example, SAIC Motor set aside 6.773 billion yuan in asset impairment provisions for 2025, while GAC Group's cumulative intangible asset impairments over the past three years have exceeded 3.2 billion yuan.

On July 13, the passenger car concept fell 2.95% during the session. Seres dropped 6.89%, GAC Group fell 4.24%, BYD declined 2.54%, BAIC BluePark lost 1.86%, and Changan Automobile slipped 1.83%. According to data from the China Passenger Car Association, retail sales of passenger cars nationwide reached 169,000 units from July 1 to 5, down 15% year-on-year. New energy vehicle retail sales totaled 103,000 units, down 9% year-on-year, with a new energy penetration rate of 60.5%. A research note from GF Securities pointed out that the passenger car industry in 2026 is characterized by "domestic demand pressure, strong exports, and structural divergence." From January to May, domestic terminal sales fell 18.22% year-on-year, while exports over the same period surged 70.0% year-on-year. Among these, pure electric and plug-in hybrid exports grew 94.0% and 148.7% respectively. The full-year export growth forecast has been raised to 40% to 45%. Structurally, sales in the sub-100,000 yuan market plunged 34.5%, while the premium market above 400,000 yuan achieved a positive growth of 1.4%. The "5326" SUV segment saw sales buck the trend with a 56.9% increase, and its new energy penetration rate reached 94.5%.

SERES hit its daily limit down during trading on July 13, with the share price touching a low of 53.91 yuan, the lowest since February 7, 2024. The stock has fallen more than 68 percent since last October, and its latest market capitalization stands at around 93.9 billion yuan. The company issued a profit warning after the market close on July 12, forecasting a net loss attributable to shareholders of the listed company of between 1.5 billion and 1.8 billion yuan for the first half of 2026. Its core subsidiary AITO Auto is expected to post a loss of between 1.05 billion and 1.3 billion yuan. The company said rising prices of raw materials such as memory chips, industrial metals, and lithium carbonate have driven up production costs, and it has adjusted the book value of some existing assets. AITO Auto swung to a net loss of between 1.9 billion and 2.15 billion yuan in the second quarter. Although SERES's new energy vehicle sales totaled 178,777 units in the first half, up 3.87 percent year on year, AITO sold 30,331 units in June, down 30.19 percent year on year, marking the second monthly decline in the first half. Several other automakers, including GAC Group and JAC Motors, also issued profit warnings due to intensifying industry competition and rising raw material costs. SERES Group Chairman Zhang Xinghai said memory chip prices have risen fivefold, lithium carbonate has climbed from 80,000 yuan per ton a year ago to 180,000 yuan per ton, and the per-vehicle cost for the AITO brand has increased by 15,000 to 20,000 yuan.

GAC Group disclosed its earnings forecast, expecting a net loss attributable to shareholders of the parent company of 4.06 billion to 4.57 billion yuan in the first half of 2026, compared with a loss of 2.538 billion yuan in the same period last year. Net profit after deducting non-recurring gains and losses is expected to show a loss of 4.8 billion to 5.6 billion yuan, compared with a loss of 2.945 billion yuan a year earlier. The company said that intense competition in the domestic auto market, increased sales investment in its own brands, changes in product mix, and rising raw material costs led to a decline in profits for its own brands. Meanwhile, lower terminal sales and cost pressures at its joint venture brands reduced investment income, and exchange rate fluctuations caused foreign exchange losses, all of which weighed on performance.